incoterms. introduction universally recognised set of definitions of international trade terms...
TRANSCRIPT
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Incoterms
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Introduction
Universally recognised set of definitions of international trade terms
Recognised by courts and other authorities Define the trade contract responsibilities and
liabilities between buyer and seller Updated regularly to keep pace with
changes and developments in international trade
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Introduction
Devised an published by the ICC
WBO ICC introduced Incoterms in 1936
Incoterms 2012 4 groups E, F, C and D
and in all 13 main terms
E: Departure
EXW- Ex Works
F: Main carriage unpaid
FCA- Free Carrier
FAS- Free Alongside Ship
FOB- Free On Board
C: Main carriage paid
CFR- Cost and Freight
CIF- Cost, Insurance and Freight
CPT- Carriage Paid To
CIP- Carriage and Insurance Paid To
D: Arrival
DAF- Delivered At Frontier
DES- Delivered Ex Ship
DEQ- Delivered Ex Quay
DDU- Delivered Duty Unpaid
DDP- Delivered Duty Paid
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Introduction
Purpose of Incoterms
Designed for Parties to a Contract Provides a set of international rules for foreign trade Reduces uncertainties Avoids different interpretations in different countries Additional costs and time can be avoided
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IntroductionTHE SELLER’S OBLIGATIONS
A1 Provision of goods in conformity with the contractA2 Licenses, authorizations and formalitiesA3 Contract of carriage and insuranceA4 DeliveryA5 Transfer of risksA6 Division of costsA7 Notice to the buyerA8 Proof of delivery, transport document or equivalent
electronic messageA9 Checking – packaging – markingA10 Other obligations
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IntroductionTHE BUYER’S OBLIGATIONS
B1 Payment of the priceB2 Licenses, authorizations and formalitiesB3 Contract of carriageB4 Taking deliveryB5 Transfer of risksB6 Division of the costsB7 Notice to the sellerB8 Proof of delivery, transport document of equivalent
electronic messageB9 Inspection of goodsB10 Other obligations
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IntroductionScope of Incoterms
Incoterms is limited:• To rights and obligations of the parties to contract of sale
with respect to the delivery of the goods sold.
• Do not deal with the consequences of breach of contract
• Primarily intended for use where goods are sold for delivery across national boundaries, hence international commercial terms
• Can be used in contracts for sale of goods directly.
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IntroductionScope of Incoterms
Incoterms is limited:• To rights and obligations of the parties to contract of sale
with respect to the delivery of the goods sold.
• Do not deal with the consequences of breach of contract
• Primarily intended for use where goods are sold for delivery across national boundaries, hence international commercial terms
• Can be used in contracts for sale of goods directly.
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IntroductionStructure
Group E DepartureEXW Ex Works (.....…........named place)
Group F Main carriage unpaidFCA Free Carrier (....….........named place)FAS Free Alongside Ship (........
….named port of shipment)FOB Free On Board
(............named port of shipment)
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IntroductionStructure
Group C Main carriage paidCFR Cost and Freight (...........named port of destination)CIF Cost, Insurance & Freight (.....named port of destination)CPT Cost Paid To (...........named port of destination)CIP Carriage and Insurance paid to
(…… .named place of destination)
Group D Arrival DAF Delivered at Frontier (.....………………….....named place) DES Delivered Ex Ship (...........named port of destination) DEQ Delivered Ex Quay (....…....named port of destination) DDU Delivered Duty Unpaid (…...named place of destination) DDP Delivered Duty Paid (.........named place of destination)
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IntroductionThe Terms
• The “E” Term is the term in which seller’s obligation is at its minimum
• The “F” Term require the seller to deliver as instructed by the buyer
• The “C” Term require the seller to contract for carriage at his expense
• The “D” Term signifies arrival contracts
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IntroductionAny mode of transport
Group E EXW Ex Works (…...............named place)
Group F FCA Free Carrier (…................named place)
Group C
CPT Cost Paid To (............named port of destination)
CIP Carriage and Insurance paid to (..........named place of destination)
Group D
DAF Delivered at Frontier (............named place)
DDU Delivered Duty Unpaid (..........named place of destination)
DDP Delivered Duty Paid (..........named place of destination)
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IntroductionMode of transport and the appropriate Incoterm
Maritime and inland waterway transport only• Group F
FAS Free Alongside Ship (..…..........named port of shipment)
FOB Free On Board (…............named port of shipment)
• Group C
CFR Cost and Freight (............named port of destination)
CIF Cost, Insurance & Freight (............named port of destination)
• Group D
DES Delivered Ex Ship (............named port of destination)
DEQ Delivered Ex Quay (............named port of destination)
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EXW - Ex Works
Goods available only at seller’s premises.
Buyer: loads the goods on truck or container at the seller’s premises, and takes into account the subsequent costs and risks.
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FCA - Free CarrierDelivery at the specified point of departure: the seller’s
premises or a named cargo terminal / railroad station
Buyer: main carriage/freight, cargo insurance and other costs and risks
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FAS - Free Alongside Ship Seller: places the goods alongside the ship at the
named port, loaded at his expense.
Buyer: pays loading fee, main carriage/freight, cargo insurance and other costs risks.
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FOB - Free On Board
Delivery of goods on board the vessel at the port of origin is at the seller’s expense.
Buyer is responsible for loading fee, main carriage/freight, cargo insurance and other costs risks.
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CFR - Cost and Freight
Seller: pays the costs and freight to bring the goods to the port of destination.
Risk: transferred once the goods have crossed the ship’s rail.
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CIF - Cost Insurance and Freight
Used exactly the same way as CFR except that
Seller: must in addition procure and pay for insurance for the cargo insurance and delivery of goods to the port of destination
Buyer: responsible for the import customs clearance & other costs and risks
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CPT - Carriage Paid To Seller delivers the goods at the named place of
destination at his expense.
Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.
Risk transferred at the delivery of goods
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CIP - Carriage & Insurance Paid To
Seller delivers the goods on the ship. On board, the risk is transferred to the buyer.
Buyer is accountable for the import customs clearance, payment of customs duties and taxes, and other costs and risks until goods reach their final destination.
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DAF - Delivered At Frontier
Delivery of goods is done at the specified point at the frontier at the seller's expense.
Buyer is responsible for the import customs clearance, payment of customs duties and taxes. The transfer of risk is made at the frontier
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DES - Delivered Ex Ship Seller assumes expenses linked to the delivery of
goods. At the arrival of the ship, the risk is transferred to the buyer.
Buyer is accountable for the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs
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DEQ - Delivered Ex Quay Delivery of goods is done to the quay of the port at the
seller's expense. He is also responsible for the import customs clearance and payment of customs duties and taxes at the buyer's end.
Buyer assumes the cargo insurance and other costs and risks
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DDU - Delivered Duty Unpaid
Delivery of goods and the cargo insurance to the final destination, which is often the project site or buyer's premises, is done at the seller's expense.
Buyer is responsible for the import customs clearance and payment of customs duties and taxes
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DDP - Delivered Duty Paid
Seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or the buyer's premises.
It is a “door to door” delivery. Risk is transferred when the goods are delivered
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Conclusion
Incoterms cannot be applied by themselves to a variety of situations, of medium of transports, technologies....
They must be supplemented by additional details adapted to these particular case.
Define the geographical points where the transfers of risks and expenses will take place.