Incoterms
International Commerce Terms

 

The Incoterms is a set of international rules, prevailed by of the Commerce International Chamber, that determine the reach of the commercial clauses including in the contract of international transaction.The Incoterms are denominated price clauses also, because each term allows determine the elements that compose it. The selection of the Incoterms influences the cost of the contract.The proposal of the Incoterms is to provide a group of international rules for the interpretation of terms more uses in International Commerce.

 The Incoterms determines:

 

• The agreement of the price.

• When and where the transference of risks takes place on the merchandise of the salesman towards the buyer.

• The place of delivery of the merchandise.

• Who contracts and pays the transport.

• Who contracts and pays the insurance.

• What documents manage each part and its cost.

 

 

CFR (Cost and Freight) - Cost and Load (been suitable port of destination).

For the salesman the agreements are the same of the quotation FOB with the only difference of which the company must be in charge to contract the warehouse of the ship and to pay the load until destiny. The risk of loss or damage of merchandises as well as any additional cost due to events happened after the moment of the delivery, are transmitted from the salesman to the buyer. Term CFR demands the salesman to dispatch merchandises for the export. This term can be used only for the transport by sea or inner navigable routes.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and Packing.

• Freight (from factory to the export place, like ports or airports).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight (from the export to the import place).

 

Obligations of the Buyer.

• Payment of the Merchandise.

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight and insurance (place of import to warehouse).

• Delays.

 

 

CIF (Cost, Insurance and Freight) - Cost, Insurance and Freight (been suitable port of destination).

It means that the selling gives the merchandise when this exceeds the hut of the ship in the agree port of shipment. The salesman must pay to the costs and the freight necessary to lead merchandises to the been suitable port of destination. In conditions CIF the salesman must contract insurance and also pay the corresponding premium, in order to cover the risks with loss or damage of the merchandise during the transport. The buyer has to observe that the salesman is forced to obtain insurance only with minimum cover. If the buyer wishes greater cover it will need to decide it with the salesman specifically or to arrange his own surely additional one. Term CIF demands the salesman to dispatch merchandises for the export. This term can be used only for the transport by sea or inner navigable routes.

 

Obligations of the Salesman.

• Delivery the merchandise necessary and documents.

• Pack and Packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight and insurance (from export to the import place).

 

Obligations of the Buyer.

• Payment of the merchandise.

• Expenses of import (manipulations, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight and insurance (place of import to plant).

• Delays.

 

 

CIP (Carriage and Insurance Paid to) - Transport and Insurance Payment Until (place of been suitable destiny).

The selling gives merchandises to the carrier designated by him but, in addition, it must pay the costs of the transport necessary to take merchandises to the been suitable destiny. The salesman also must obtain an insurance against the risk, that supports the buyer, of loss or damage of merchandises during the transport. The buyer assumes all the risks and with any other cost happened after the merchandises had been given. The CIP demands that the salesman dispatches merchandises for the export. This term can be used independently of the road transport, including the multimodal transport.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight and insurance (from export to the import place).

• Expenses of import (manipulation, storage, agents) “Partial”.

 

Obligations of the Buyer.

• Payment of the merchandise.

• Customs (documents, permissions, requirements, taxes).

• Freight and Insurance (place of import to plant).

• Expenses of import (manipulation, storage, agents) “Partial”.

• Delays.

 

 

CPT (Carriage Paid To) - Transport Paid Until (place of been suitable destiny).

The selling gives merchandises to the carrier designated by him but, in addition, it must pay the costs of the transport necessary to take the merchandises to the been suitable destiny. The buyer assumes all the risks and with any other cost happened after the merchandises had been given. The CPT demands that the salesman dispatches merchandises for the export. This term can be used independently of the transport way, including the multimodal transport.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight (from export to the import place).

• Expenses of import (manipulation, storage, agents) “Partial”.

 

Obligations of the Buyer.

• Payment of the merchandise.

• Customs (documents, permissions, requirements, taxes).

• Freight and Insurance (place of import to plant).

• Expenses of import (manipulation, storage, agents) “Partial”.

• Delays.

 

 

DAF (Delivered At Frontier) - Given in Border (been suitable place).

It means that the salesman has fulfilled his obligation to give when has put the merchandise dispatched in the Customs for the export in the been suitable point and place of the border but before the border customs of the buying country. This term can be used independently of the transport way when the merchandises must be given in a land border.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulations, storage, agents).

• Freight (from export to the import place) (partial).

• Insurance (partial).

 

Obligations of the Buyer .

• Payments of the Merchandise.

• Freight (from export to the import place) (partial).

• Insurance (partial).

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight and insurance (place of import to plant).

• Delays.

 

 

DDP (Delivered Duty Paid) - Given Right Paid (place of been suitable destiny).

It means that the selling gives merchandises to the buyer, dispatched for the import, and not unloaded of used means of transport in the place of decided destiny. The salesman must assume all the costs and risks caused when taking the merchandises until that place, including the customs proceedings, and the payment of the proceedings, rights of customs, taxes and other loads for the import to the destiny country.

 

Obligations of the salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Transport (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight (from export to the import place).

• Insurance.

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Transport and insurance (place of import to plant).

• Delays.

 

Obligation of the buyer.

• Pay the merchandise.

 

DDU (Delivered Duty Unpaid) - Given Taxes Not paid (place of been suitable destiny).

It means that the salesman has fulfilled his obligation to give when has put the merchandise to disposition of the buyer in the been suitable place of the import country and the Salesman has to assume all the expenses and risks related with manipulation the merchandise, until that place (excluded right, indispensable taxes and other official positions to the import). As well as the expenses and risks of carrying out the customs formalities.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight and insurance (from export to the import place).

 

Obligations of the Buyer.

• Payment of the merchandise.

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight and insurance (place of import to plant).

• Delay.

 

 

DEQ (delivered Ex-) - Given in Wharf (been suitable port of destination).

It means that the selling delivery when the merchandises to disposition of the buyer are put, without dispatching for the import, in the wharf of the port of destination agree. The salesman must assume the costs and risks caused when leading the merchandises to the decided port of destination and unloading the merchandises in the wharf. Term DEQ demands that the buyer dispatches merchandises for the import and that pays all the proceedings, rights, taxes and other loads of the import.

 

Obligations of the Salesman.

• Delivery the merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight and insurance (from export to the import place).

• Customs (documents, permissions, requirements, taxes).

 

Obligations of the Buyer.

• Payment of the merchandise.

• Freight and insurance (place of import to plant).

• Expenses of import (manipulation, storage, agents).

• Delays.

 

This term can be used only for the transport by sea or routes of inner navigation or for the multimodal transport.

  

DES (Delivered Ex Ship) - Given On Ship (been suitable port of destination).

It means that the selling delivery the merchandises to the buyer on ship board not dispatched yet for the import. The buyer is responsible when the ship arrives to the destination port.

 

Obligations of the Salesman.

• Delivery the necessary merchandise and documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• Freight and insurance (from export to the import place).

 

Obligations of the Buyer.

• Payment of the merchandise.

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Transport and insurance (place of import to plant).

• Delays.

 

 

EXW (Ex-) - In Factory (been suitable place).

It means that the selling delivery when it puts the merchandise to disposition of the buyer in the establishment of the salesman or another been suitable place (like factory, warehouse, etc.). This term represents, thus, the smaller obligation of the salesman, and the buyer must assume all the costs and risks.

 

Obligations of the Salesman.

• Delivery of the merchandise and necessary documents.

• Pack and packing.

 

Obligations of the Buyer.

• Payment of the merchandise.

• Internal freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

• International freight (from export to the import place).

• Insurance.

• Expenses of import (manipulation, storage, agents).

• Transport and insurance (place of import to plant).

 

 

FAS (Free Along Ship) - Free to the Flank of the Ship (been suitable port of embarkation).

It means that the responsibility of the salesman finalizes once the merchandise is placed to the flank of the ship in the been suitable port of loading. This means that the buyer has to assume all the costs and risks of loss or damage of merchandises from that moment. Term FAS demands the salesman to dispatch merchandises for the export.

 

Obligations of the Salesman.

• Necessary Merchandise and Documents.

• Pack and Packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

 

Obligations of the Buyer.

• Payments of the merchandise.

• Freight and insurance (from export to the import place).

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Insurance and Freight (place of import to plant).

• Delays.

 

FCA (Free Carrier) - Free Carrier (been suitable place).

It means that the selling gives the merchandise for the export to the carrier proposed by the buyer, in the decided place. The chosen place of delivery influences in the obligations of load and unloading of the parts. If the delivery takes place in the warehouse of the salesman he is responsible for the load. If the delivery happens in any other place, the salesman is not responsible for the unloading. This term can be used in any means of transport including the multimodal transport.

 

Obligations of the Salesman.

• Delivery of the Merchandise and necessary documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes.

• Expenses of export (manipulation, storage, agents).

 

Obligations of the Buyer.

• Payments of the merchandise.

• Freight (from export to the import place).

• Insurance.

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight and insurance (place of import to plant).

• Delays.

 

 

FOB (Free On Board) - Free on board (been suitable port of embarkation).

The responsibility of the salesman finishes when the merchandises exceed the hut of the ship in the been suitable port of loading. The buyer must support to all the costs and risks of the loss and the damage of merchandises from that point. The term FOB demands the salesman to dispatch merchandises for the export. This term can be used only for the transport by sea or inner navigable routes.

 

Obligations of the Salesman.

• Delivery the necessary merchandise and documents.

• Pack and packing.

• Freight (from factory to the export place).

• Customs (documents, permissions, requirements, taxes).

• Expenses of export (manipulation, storage, agents).

 

Obligations of the Buyer.

• Payment of the merchandise.

• Freight and insurance (from export to the import place).

• Expenses of import (manipulation, storage, agents).

• Customs (documents, permissions, requirements, taxes).

• Freight (place of import to plant).

• Delays.