group1 - incoterm

8/3/2019 Group1 - INCOTERM

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INCOTERMS

A series of internationally recognisedstandardised trade terms published

by the International Chamber of

Commerce (ICC) and widely used in

international contracts of sale

A series of internationally recognisedstandardised trade terms published

by the International Chamber of

Commerce (ICC) and widely used in

international contracts of sale

The first Incoterm rules were pulishedin 1936, then it is revised and added

six times in the years: 1953, 1967,

1976, 1980, 1990 & 2000

The first Incoterm rules were pulishedin 1936, then it is revised and added

six times in the years: 1953, 1967,

1976, 1980, 1990 & 2000

The new Incoterms 2010 rules were

revised by the International Chamber of

Commerce

The new Incoterms 2010 rules were

revised by the International Chamber of

Commerce

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Who does what, who pays for what, when

risk in the goods passes from seller to

buyer

When delivery occurs, as well as issues such

as insurance, export and import clearance and

the allocation of other costs pertaining to thedelivery of goods

W

hat do INCOTERMS cover?


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What do INCOTERMS not cover?

tThis is an example text. Go ahead and replace it with your own text. tThis is an example

text. Go ahead and replace it with your own text.

This is an example text. Go ahead and replace it with your own text.

There is nothing on ownership/title to the goods, nothing

in detail on payment obligations (when, how, what security,against what documents), nothing on detailed vessel

requirements, force majeure, termination, insolvency.

Templates

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In short INCOTERMS do not constitute a complete

contract of sale, but rather provide convenient,

internationally recognised rules for the sale of goods.They work well as general outline of the contract of sale

which is to be specified and adjusted with further terms and

conditions of the contract


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What is Incoterms 2010?

Incoterms 2010 is

divided into two

categories:+ Clauses for all types

of transport: EXW,

FCA, CPT, CIP, DAT,

DAP, DDP

+ Clauses for sea and

inland water transport:

FAS, FOB, CFR, CIF.

Incoterms 2010

1 Incoterms 2010

consists of only 11

Incoterms.four terms were

eliminated (DAF, DEQ,

DES, DDU) and two

were added: DAT &

DAP

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Incoterms 2010


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Main rules how to use Incoterms 2010 rules:

Incorporation Incoterms 2010 rule into yourcontract of sale

Choose appropriate Incoterm rule

Specify the delivery place/ port and place of

destination as precisely as possible. Incoterm 2010 do not cover everything, other

contract conditions.

Incoterms 2010


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Possible to use for domestic trade as well.

Insurance- Incoterm 2010

revision ofInstitute Cargo Clauses (2009)

Be aware of THC are their part of contract ofcarriage?

String sales- seller in the middle, procuresshipped goods

Be aware of risk of using Variants ofIncoterms rules (cost and also point of risk

transfer???)

Incoterms 2010


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- No, it isnt. Because Incoterms are not law, its only

provide a set of international rules for obligations,

risk and cost while the buyers get the goods to the

sellers.

- Incoterms cant be used as a completed foreign

contract

- So, we can use Incoterms 2000 in international

sales contracts. however, incoterms 2010 is still

encouraged because it provides the new standards

to current economic conditions.

- Whether selecting any conditions Incoterms, the

parties still need to know that the interpretation of

contracts also govern its own strong traditions of

each port or locality concerned.

Is Incoterms 2010 always legally binding

in international sales contracts?

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INTRODUCESTRUCTUREOFINCOTERMS 2010

Whilst incoterms 2000 had four categorise: incoterms

2010 only has two categories:

- Rules for Any mode of transport

EXW EX WORKS

FCA FREE CARRIER

CPT CARRIAGE PAID TOCIP CARRIAGE AND INSURANCE PAID TO

DAT DELIVERED AT TERMINAL

DAP DELIVERED AT PLACE

DDP DELIVERED DUTY PAID


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INTRODUCESTRUCTUREOFINCOTERMS 2010

Whilst incoterms 2000 had four categorise: incoterms 2010

only has two categories:

-Rules forSea and inland waterway transport only

FAS FREE ALONGSIDE SHIPFOB FREE ON BOARD

CFR COST AND FREIGHT

CIF COST INSURANCE AND FREIGHT


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Classification ofIncoterm 2010

Rules for

SEA A

NDINL

AND

WATERWAY TRANSPORT

FAS: Free alongside shipFOB: Free on boardCFR: Cost and FreightCIP: Cost and Insurance and

Freight

Rules for ANY MODEORMODESOFTRANSPORT

EXW: Ex WorksFCA: Free CarrierCPT: Carriage paid toCIP: Carriage & Insurancepaid to

DAT: Delivered at TerminalDAP: Delivered at PlaceDDP: Delivered duty paid

Rules for ANY MODEORMODESOFTRANSPORT

EXW: Ex WorksFCA: Free CarrierCPT: Carriage paid toCIP: Carriage & Insurancepaid to

DAT: Delivered at TerminalDAP: Delivered at PlaceDDP: Delivered duty paid


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RESPONSIBILITY OF SELLER

AND BUYER UNDER EACH

TERM


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Theo http://www.orey-shipping.com/60Incoterms.pdf


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What is the difference between: FOB & FCA,

CIF & CIP, CFR & CPT?


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FOBmeans Free On Board (Rule for sea and inland waterway

transport): Seller delivers the good (cleared for export) on board the

vessel nominated by buyer at the port of delivery .Cost and risk

change from seller to buyer as the goods pass over the imaginary

vertical line defined by the ship's rail.

FCA means Free Carrier(Rule for any mode of transport): sellerhands the goods over to buyer's designated carrier (pre-cleared for

export) at the named place. Cost and risk change from seller to buyer

as soon as the goods are accepted and signed for by the buyer's

designated carrier.

The differences between FOB & FCA:The differences between FOB & FCA:


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CIP Carriage and Insurance Paid (To) (Rule for any mode of

transport) the seller delivers the goods (cleared for export) to thecarrier nominated by the seller and seller arranges and pays for the

carriage up to the named place of destination. Seller contracts for

insurance. Seller pays for carriage and insurance to the named

destination point.

CIF Cost, Insurance and Freight (Rule for sea and inland

waterway transport): the seller delivers the goods on board the

vessel and pays the cost and freight necessary to bring the goods

to the named port of destination. Seller contracts for insurance.

Risk passes and cost are transferred at difference places.

The differences between CIP & CIF:The differences between CIP & CIF:


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CFR- Cost and Freight (Rule for sea and inland waterway transport): the

seller delivers the goods on board the vessel and pays the cost and freightnecessary to bring the goods to the named port of destination. Risk passes

and cost are transferred at difference places, the risk passes when the goods

are on board the vessel (not until the goods reach the destination); the cost of

carriage will be covered by the seller until the goods reach destination.

CPT- Carriage Paid To (Rule for any mode of transport): the seller deliversthe goods (cleared for export) to the carrier or another person nominated by

the seller and seller arranges and pays for the carriage up to the named place

of destination. Risk to the goods transfers from the seller to the buyer when

good so delivered to the first carrier not until the goods reach destination.

The differences between CFR & CPT:The differences between CFR & CPT:


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FOB CIF CFR rules for sea and inland waterway transport, FCA CIP

CPT are applicable to goods for transport by air, rail, road and

containerised/multi-modal transport.

FOB CIF CFR rules for sea and inland waterway transport, FCA CIP

CPT are applicable to goods for transport by air, rail, road and

containerised/multi-modal transport.

FOB, CIF, CFR may not be appropriate for use where goods are handed over to

the carrier before they are on board the vessel, for example goods in

containers, which are typically delivered at a terminal. In such situations, the

FCA, CIP, CPT rule should be used.

FOB, CIF, CFR may not be appropriate for use where goods are handed over to

the carrier before they are on board the vessel, for example goods in

containers, which are typically delivered at a terminal. In such situations, the

FCA, CIP, CPT rule should be used.

When shouldnt FOB, CIF, CFR be used?

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TNAK YOU

THANK YOU

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