INCOTERMS® 2010 RULES

INCOTERMS® 2010 RULES

INCOTERMS® 2010 RULES

WHAT ARE INCOTERMS AND WHY ARE THEY USED?

International Commercial Terms (Incoterms) are internationally recognized standard trade terms used in sales contracts. They’re used to make sure buyer and seller know:

■ Who is responsible for the cost of transporting the goods, including insurance, taxes and duties ■ Where the goods should be picked up from and transported to■ Who is responsible for the goods at each step during transporta-tion

INCOTERMS RULES

The Incoterms® rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the sale of goods world-wide and provide rules and guidance to importers, exporters, lawyers, transport-ers, insurers and students of internation-al trade.

HOW ARE THEY USED?

Incoterms are used in contracts in a 3-letter format followed by the place specified in the contract (e.g. the port or where the goods are to be picked up). There are different terms for sea and inland waterways (e.g. rivers and canals) compared to all other modes of transport.

INCOTERMS® 2010 RULES

Incoterms® 2010 will not apply unless incorporated into the contract of sale by clearly specifying that the contract is governed by Incoterms® 2010. Incoterms® are ICC’s standard definitions of trade terms and are internationally recognized as indispensable evidence of the buyer’s and seller’s responsibilities for delivery under a sales contract. This is a basic guide, we recommend you refer to the Handbook created by the ICC - International Chamber of Commerce for more detailed information regarding Incoterms® 2010. http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010

Seller is only responsible for having the goods packed made available at the seller’s premises. The buyer bears the full risk and cost from there to the destination.

Seller is responsible for delivery to the named place. Risk and cost are transferred to the buyer as soon as delivered at the named place.

Seller arranges the transportation and costs to the named place at destination. Risk is transferred to the buyer once delivered at first carrier.

Seller delivers the goods unloaded at agreed destination terminal. Risk is transfered as soon as goods have been unloaded at agreed destination.

Seller delivers the goods to the agreed place at destination. Seller assumes all cost and risk until the goods are ready for unloading at named place at destination.

Seller delivers the goods to the agreed place at destination. Seller assumes all cost, including import formalities, and risk until the goods are ready for unloading at named place at destination.

Seller is responsible for delivery of the goods at the port alongside the vessel. From this point onward, risk and cost transfers to the buyer.

Seller is responsible for delivery of the goods loaded on board the vessel. Risk and cost are transferred as soon as the goods have been loaded onboard the vessel.

Seller covers cost of freight to the named port of destination or place. Risk is transferred as soon as the goods have been loaded onboard the vessel.

Seller covers cost of insurance and freight to the named port of destination or place. Risk is transferred as soon as the goods have been loaded onboard the vessel.

EXWEX Works

DATDelivered At

Terminal

FCAFree Carrier

CPTCarriage

Paid To

CIPCarriage &Insurance

Paid To

DDPDeliveredDuty Paid

DAPDelivered At

Place

FOBFree

On Board

FASFree

AlongsideShip

CIFCost,

Insurance& Freight

CFRCost and

Freight

CARRIAGERISKCOST

ANY

MOD

E(S)

OF T

RANS

PORT

SEA

& IN

LAND

WAT

ERW

AY TR

ANSP

ORT

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

CARRIAGERISKCOST

SELLER/EXPORTER

FACILITY

CUSTOMS CLEARANCE

(EXPORT)

PRE-CARRIAGE

DELIVERED & UNLOADED AT PORT OF

LOADING

ALONGSIDE VESSEL

ONBOARD VESSEL

PORT OF LOADING

MAIN TRANSPORT

ONBOARD VESSEL

POINT OF DISCHARGE

UNLOADED AT PORT OF DISCHARGE

ON-CARRIAGE

CUSTOMS CLEARANCE

(IMPORT)

BUYER/IMPORTER

FACILITY

Seller arranges the transportation, costs, and insurance on behalf of the buyer to the named place at destination. Risk is transferred to the buyer once delivered at first carrier.

EX WORKS

FREE CARRIER

CARRIAGE PAID TO

CARRIAGE & INSURANCE

PAID TO

DELIVERED AT TERMINAL

DELIVERED AT PLACE

DELIVERED DUTY PAID

means that the seller delivers when he places the goods at the disposal of the buyer at a designated location, such as the seller's warehouse. Once the goods have been placed at the buyer's disposal, the buyer is responsible for the transportation arrangements and bears the full risk from there to the destination. The seller does not need to load the goods on any collecting vehicle, nor does he need to clear the goods for export, where such clearance is applicable. Even if the seller does help the buyer by loading the goods onto a truck, for example, the buyer is the one liable for damage during this process.

means that the seller delivers the goods, cleared for export, to the carrier or another person nominated by the buyer at a specified place. Typically, the destination is a named airport, terminal or other place where the carrier operates. The cost for transportation is included in the price set by the seller, and the risk of loss is assumed by the seller until the goods are delivered to the carrier, at which point the buyer assumes all responsibility.

means that the seller delivers the goods to a carrier, or to another person nominated by the seller, at a place mutually agreed upon by the buyer and seller, and that the seller pays the freight charges to transport the goods to the specified destination. The risk of damage or loss to the goods being transported is transferred from the seller to the buyer as soon as the goods have been delivered to the carrier. The seller is responsible only for arranging freight to the destination, and not for insuring the shipment when it is being transported.

means that the seller delivers the goods to a carrier, or to another person nominated by the seller, at a place mutually agreed upon by the buyer and seller, and that the seller pays the freight charges to transport the goods to the specified destination. The risk of damage or loss to the goods being transported is transferred from the seller to the buyer as soon as the goods have been delivered to the carrier. Under CIP, the seller is responsible for arranging freight to destination, and is obligated to insure goods in transit for 110% of the contract value. If the buyer desires additional insurance, such extra coverage must be arranged by the buyer.

means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination. The buyer is responsible for import clearance and any applicable local taxes or import duties.

means that the seller delivers when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination. This includes paying for shipping costs, export and import duties, insurance and any other expenses incurred during shipping to an agreed-upon location in the buyer's country.

means that the seller delivers when the goods are loaded, cleared for export, on board the vessel nominated by the buyer at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point onwards. If the Shipper does not intend to deliver the goods across the ship's rail (i.e., Loaded on board), the FCA term should be used. Use of this rule is restricted to goods transported by sea or inland waterway.

means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier. However, the risk of loss of or damage to the goods passes to the buyer once the goods are loaded on board the vessel. Under CIF, the seller is responsible for arranging freight to destination, and is obligated to insure goods in transit for 110% of the contract value. If the buyer desires additional insurance, such extra coverage must be arranged by the buyer.

means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Risk transfers from seller to buyer when the goods are available for unloading, so unloading is at the buyer’s risk (An important difference from "Delivered At Terminal - DAT", where the seller is responsible for unloading). The buyer is responsible for import clearance and any applicable local taxes or import duties.

means that the seller delivers when the goods are placed, cleared for export, alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment onwards. Use of this rule is restricted to goods transported by sea or inland waterway.

means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier. However, the risk of loss of or damage to the goods passes to the buyer once the goods are loaded on board the vessel. Under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit.

FREE ALONGSIDE

SHIP

FREE ON

BOARD

COST AND

FREIGHT

COST, INSURANCE

AND FREIGHT