ICC INCOTERMS 2010 (International Commercial Terms issued by the International Chamber of Commerce) are internationally recognized standard rules used worldwide in international and domestic contracts for the sale of goods.
Their aim is to provide rules and guidance in order to avoid costly misunderstanding by classifying the tasks, costs and rights involved in the delivery of goods from Sellers to Buyers.
There are 11 INCOTERMS which can be classed in 2 distinct categories:
Rules for any mode or modes of transport : EXW, FCA, CPT, CIP, DAT, DAP and DDP
Rules for sea and inland waterway transport : FAS, FOB, CFR and CIF
EX WORKS
RISK
The Seller delivers the goods by placing them at the disposal of the Buyer, for pick-up, at a named place of delivery (e.g. works, factory, warehouse, etc.). The Seller is not in any way involved in the loading of the vehicles destined to transport the goods.
The Buyer bears all risks of loss of/or damage to the goods from the time when they have been delivered at the named place of delivery by the Seller for pick-up by the Buyer.
INSURANCE
Buyer should take out insurance from the time he takes delivery of the goods from the Seller at the agreed upon point of delivery.
FREE CARRIER
RISK
The Seller delivers the goods by loading them onto the means of transport nominated by the Buyer at a named place of delivery (loading point of goods - Ex. Lorry, train, vessel, plane).
INSURANCE
Buyer should take out insurance once the goods have been loaded onto the carrier’s means of transport nominated by the Buyer.
CARRIAGE PAID TO
RISK
The Seller delivers the goods to the first carrier, by making them available to the first carrier, nominated by the Seller. The Seller contracts for and pays for the costs of carriage necessary to bring the goods to a named place of destination agreed between the Seller and the Buyer.
INSURANCE
Buyer should take out insurance from the time when the goods are made available to the first carrier.
CARRIAGE AND INSURANCE PAID TO
RISK
The Seller delivers the goods to the first carrier, by making them available to the first carrier, nominated by the Seller. The Seller contracts for and pays for the costs necessary to bring the goods to the named place of destination, agreed between the Seller and the Buyer.
INSURANCE
Seller contracts insurance coverages for the Buyers’ risks of loss of/or damage to the goods during the carriage (from delivery to the first carrier to the named place of destination agreed between the Seller and the Buyer).
DELIVERED AT TERMINAL
RISK
The Seller delivers the goods by unloading them from the retained means of transport and by placing them at the disposal of the Buyer at a named terminal at a named port or place of destination. The Seller bears all risks involved in bringing the goods to and unloading them at the terminal of the named port or place of destination.
Seller contracts for and pays for the costs necessary to bring the goods to a named place of destination.
INSURANCE
Seller should take out insurance for transportation until delivery (including unloading operations) at the named terminal.
DELIVERED AT PLACE
RISK
The Seller delivers the goods by placing them at the disposal of the Buyer on the arriving means of transport, ready for unloading, at a named place of destination. The Seller bears all risks involved in bringing the goods to the named place of destination.
The Seller contracts for and pay for costs necessary to bring the goods to the named place of destination.
INSURANCE
Seller should take out insurance for the shipment until the goods are made available for unloading at the destination.
DELIVERED DUTY PAID
RISK
The Seller delivers the goods by placing them at the disposal of the Buyer on the arriving means of transport ready for unloading at a named place of destination. The Seller contracts for and pays for the costs necessary to bring the goods to a named place of destination.
The Seller bears all costs and risks involved in bringing the goods to the place of destination.
The Seller has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.
INSURANCE
Seller should take out insurance for the shipment until the goods are ready for unloading at a place of destination.
FREE ALONGSIDE SHIP
RISK
The Seller delivers the goods by placing them alongside the vessel (e.g. on a quay or barge) nominated by the Buyer at a named port of loading. The risk of loss of/or damage to the goods transfers when the goods are alongside the vessel.
INSURANCE
Buyer should take out insurance from the time when the goods are made available to the first carrier. Buyer should take out insurance from the time when the goods are delivered by the Seller at an agreed upon place.
FREE ON BOARD
RISK
The Seller delivers the goods by placing them onboard the vessel nominated by the Buyer at a named port of loading. FOB requires the Seller to clear the goods for export (where applicable).
INSURANCE
Buyer should take out insurance from the time when the goods are loaded onboard the appointed vessel at a named port. Seller should take out insurance for any pre-carriage and loading operations (carried out by transporters / loading operators owned by the Seller or nominated by him).
COST AND FREIGHT
RISK
The Seller delivers the goods by placing them onboard the vessel nominated by the Seller at a named port of loading. The risk of loss of/or damage to the goods transfers when the goods are loaded onboard the vessel.
The Seller contracts for and pays for the costs and freight necessary to bring the goods to the named port of destination.
CRF requires the Seller to clear the goods for export (where applicable).
INSURANCE
Buyer should take out insurance from the time when the goods are loaded onboard the vessel nominated by the Seller at a named port of loading. Seller should take out insurance for any pre-carriage and loading operations.
COST INSURANCE AND FREIGHT
RISK
The Seller delivers the goods by placing them onboard the vessel nominated by the Seller at a named port of loading. The risk of loss of/or damage to the goods transfers when the goods are loaded onboard the vessel.
The Seller contracts for and pays for the costs and freight necessary to bring the goods to the named port of destination.
CIF requires the Seller to clear the goods for export (where applicable). The Seller has no obligation to clear the goods for import, pay any import duty or carry out any import customs formalities.
INSURANCE
Seller contracts insurance cover against the buyer’s risk of loss of/or damage to the goods during the carriage (from the place of delivery till the goods are unloaded at a named port of destination). Buyer should take out his own insurance for transport (if any) from the port of arrival to final destination.
