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Incoterm
Incoterms or international commerce
terms are a series of international sales terms that are widely used throughout
the world. They are used to divide transaction costs and responsibilities
between buyer and seller and reflect state of the art transportation practices.
They closely correspond to the U.N. Convention on Contracts for the
International Sale of Goods.
Incoterms deal with the questions related to the delivery of the products from
the seller to the buyer. This includes the carriage of products, export and
import clearance responsibilities, who pays for what, and who has risk for the
condition of the products at different locations within the transport process.
Incoterms are always used with a geographical location and do not deal with
transfer of title.
They are devised and published by the International Chamber of Commerce (ICC).
The English text is the original and official version of Incoterms 2000, which
have been endorsed by the United Nations Commission on International Trade Law (UNCITRAL).
Authorized translations into 31 languages are available from ICC national
committees.
Group E - Departure:
EXW. Ex Works (named place): the seller makes the goods available at his
premises.
Group F - Main Carriage Unpaid:
FCA. Free Carrier (named place): the seller hands over the goods, cleared for
export, into the custody of the first carrier (named by the buyer) at the named
place. This term is suitable for all modes of transport, including carriage by
air, rail, road, and containerised / multi-modal transport.
FAS. Free Alongside Ship (named loading port): free Alongside Ship: the seller
must place the goods alongside the ship at the named port. The buyer must clear
the goods for export. Suitable for maritime transport only.
FOB. Free On Board (named loading port): the classic maritime trade term, Free
On Board: seller must load the goods on board the ship nominated by the buyer,
cost and risk being divided at ship's rail. The seller must clear the goods for
export. Maritime transport only.
Group C - Main Carriage Paid:
CFR. Cost and Freight (named destination port): seller must pay the costs and
freight to bring the goods to the port of destination. However, risk is
transferred to the buyer once the goods have crossed the ship's rail. Maritime
transport only.
CIF. Cost, Insurance and Freight (named destination port): exactly the same as
CFR except that the seller must in addition procure and pay for insurance for
the buyer. Maritime transport only.
CPT. Carriage Paid To (named destination port): the general/containerised/multimodal
equivalent of CFR. The seller pays for carriage to the named point of
destination, but risk passes when the goods are handed over to the first
carrier.
CIP. Carriage and Insurance Paid to (named destination port): the containerised
transport/multimodal equivalent of CIF. Seller pays for carriage and insurance
to the named destination point, but risk passes when the goods are handed over
to the first carrier.
Group D - Arrival:
DAF. Delivered At Frontier (named place)
DES. Delivered Ex Ship (named port)
DEQ. Delivered Ex Quay (named port)
DDU. Delivered Duty Unpaid (named destination place)
DDP. Delivered Duty Paid (named destination place)
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