update on international banking b fm

8/12/2019 Update on International Banking b Fm

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Update on International Banking - Module A of Bank Financial Management( As of October 2012

S.

No

Reference Current provision Revised version

1 Under guidelinesthird para frombelow-page 39

he guidelinespermit boo!ing offorward contracts b"customers on thestrength ofunderl"inge#posure$transactionor merel" on thebasis of pastturnover.

Under e#tant regulations% the facilit" ofcancellation and reboo!ing is not permittedfor forward contracts% involving Rupee as oneof the currencies% boo!ed b" residents tohedge current and capital accounttransactions. Now e#porters are allowed tocancel and rebook for!ard contracts tot"e e#tent of 2$ percent of t"e contractsbooked in a financial %ear for hedging theircontracted e#port e#posures.

& 'age (9 item )

third line in thepara

*+,R % "derabad *+R, *nstitute for +evelopment and

Research in ,an!ing echnolog"% "derabad3 'age (9 item )

second para/or customerremittances% theminimum amount forR 0S transfer is Rs.1. lac.

/or customer remittances% the minimumamount for R 0S transfer is Rs. &. lac.

( 3.2 NR 4ccounts'age 2&

'ermitted credits Permitted Credits :

a. Proceeds of

remittances to

India in any

permitted currency.

b. Proceeds of

i) personal cheques drawn by the

account holder on his foreign

currency Account

ii) travelers cheques, bank drafts

payable in any permitted

currency including instruments

e pressed in Indian rupees which

reimbursement will be received in


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foreign currency, deposited by the

acc ount hold er in per son

during his temporary visit to

India, provided the A! "ategory I

bank# Authorised bank is satisfied

that the account holder is still

resident outside India

iii) the travelers$ cheques#drafts are

standing#endorsed in the of the

account holder and in the case

of travelers$ cheques, they were

issued outside India.c. Proceeds of foreign currency#bank

notes tendered by account on his

temporary visit to India, provided

%i) the amount was declared on a

"urrency !eclaration &orm where

applicable. Present ly where the

aggregate value of the foreign

e change in the form of currency

notes, bank notes or travelers cheques

brought in by such person at any one

time e ceeds '(! ****+ or its

equivalent and#or the aggregate

value of foreign currency notes

brought in by such person at any

one time e ceeds '(! ***+ or

its equivalent, and

%ii) the notes are tendered to the A!

bank in person by the account

holder himself and the A! bank is

satisfied that account holders a


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person resident outside India.

d. -ransfers from other/0#&" / accounts.

e. Interest accruing on the funds

held in the account.d. interest on 1overnment

securities and dividend on

units of mutual funds, provided

the securities#units were

purchased by debit to the

account holder2s

/0#&" / account or out

of inward remittance throughnormal banking channels.

e. 3aturity proceeds of

1overnment securities

including ational

Plan#(avings "ertificates as

well as proceeds of

1overnment securities and

units of mutual funds sold ona recogni4ed stock e change

in India and sale proceeds

of units received from

mutual funds, provided the

securities#units were

originally purchased by debit

to the account holder2s

/0#&" / account or out ofremittances received from

outside India in free foreign

e change.

f. /efund of share#debenture

subscriptions to new issues of


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Indian companies or portion

thereof, if the amount of

subscription was paid from the

same account or from other

/0#&" / account of the

account holder or by remittance

from outside India through

banking channels.

g. /efund of application#earnest

money # purchase

consideration made by the

house building agencies#seller

on account of non allotment of

flat#plot, cancellation of

bookings#dealers for purchase

of residential#commercial

property, together with if any

%net of income ta payable

thereon), provided the original

payment was made out of

/0#&" / account of the

holder or remittance from

outside India through normal

channels and the A! "ategory I

+bank+is satisfied about

genuineness of the transaction.

h. -ransfer of balances from

00&" # /&" # /&" %!)

5*


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Accounts consequent to

change in status from resident

to non+resident.

i. "urrent income like rent,

dividend, pension, interest etc.

of /Is, A!s are satisfied that

the credit represents current

income of non+resident

account holders and income

ta thereon I deducted # paid #

provided for as the case may

be. Income -a

declaration#"hartered

Accountant certificate stating

income ta thereon has been

deducted#paid# provided for is

to be obtained.

6. Any other credit if covered

under general or special

permission granted by

/eserve 7ank.

k. Proceeds of demand

drafts#bankers2 cheques,

account payee cheques

issued against encashment of

foreign currency to the /0

account of the /I account

holder where the instruments

issued to the /0 account

holder are supported by

encashment certificate issued

by A! "ategory#I "ategory II.

l. /epayment of loans availed

by resident individuals in India


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as per e tant guidelines of

/7I from her#his close

relatives outside India by

credit to /0 # &oreign

"urrency on+/esident%7ank) 8&" /%7)9 account of

the lender concerned sub6ect

to the condition that the loan

to the resident individual was

e tended by way of inward

remittance in foreign

e change through normal

banking channels or by debitto the /0 # &" /%7)

account of the lender and the

lender is eligible to open

/0 # &" /%7) account

within meaning of the &oreign

0 change 3anagement

%!eposit) /egulations, ***

notified vide otification o. &03A # ***+/7 dated 3ay

;, *** , as amended from

time to time. (uch credit shall

be treated as an eligible credit

to the /0 # &" /%7)

account in terms of Para ;%6)

of (chedule+ read with Para

of (cheule+ of otificationo. &03A # ***+/7, ibid.

o. &unds from /< account

to /0 account within the

overall ceiling of '(! one

million per financial year
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'ermitted debits

subject to payment of tax ,

as applicable %i.e. as

applicable if funds were

remitted abroad). (uch credit

of funds to /0 account shallbe treated as eligible credit in

terms of paragraph ;%6) of

(chedule+ of otification o.

&03A. # ***+/7 dated ;rd

3ay ***.

p. the proceeds of erstwhile

/ / deposit %discontinued

with effect from April , ** )paid on maturity

q. =itherto, in terms of (chedule

;, 5 and of the &03A

otification o. *# ***+/7

dated 3ay ;, ***, sale proceeds

of &oreign Investments in India

were treated as eligible credit to

/0#&" / %7) accounts, wherethe purchase consideration was

paid by the on+resident Indians #

Persons of Indian


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Debits:

a. >ocal !isbursements

b. /emittances outside India

c. -ransfer to

/0#&" /

accounts of the

account holder or

any other person

eligible to maintain

such account.

a. Investment in

shares#securities

#commercial paper

of an Indian

company or for

purchase of

immovable property

in India provided

such

investment#purchas

e is covered by the

regulations made,

or the

general#special

permission granted

by the /eserve

/ank.

b. Any other

transaction if

covered under

general or special

permission granted


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by the /eserve

7ank.

2.1.8 Debits not

allowed

!eposits by /ls with persons other than

A! banks# Authorised 7anks out of inward

remittances from overseas or by debit to

/0#&" / %7) Accounts shall not be

permissible.

2 Non-resident

5rdinar" Rupee4ccounts'age 23 item &

'ermissible credits Permissible Credits

%i) Proceeds of remittances from outside Indiathrough normal banking channels received inforeign currency which is freely convertible.

%ii) Any foreign currency, which is freelyconvertible, tendered by the account holderduring his temporary visit to India. &oreigncurrency e ceeding '(! *** or itsequivalent in the form of cash should besupported by currency declaration form./upee funds should be supported by

encashment certificate, if they representfunds brought from outside India.

%iii) -ransfers from rupee accounts of non+resident banks.

%iv) >egitimate dues in India of the accountholder. -his includes current income like rent,dividend, pension, interest, etc.

%v) (ale proceeds of assets includingimmovable property acquired out of

rupee#foreign currency funds or by way oflegacy#inheritance.

%vi) ; /esident individual may make a rupeegift to a /I#PI< who is a close relative of theresident individual 8close relative as defined in(ection ? of the "ompanies Act, @ ?9 byway of crossed cheque #electronic transfer.-he amount shall be credited to the on+
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'age 23 item & 'ermissible debits

/esident %


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year sub6ect to payment of ta , as applicable.

%v) !eposits by /ls with persons other than A! banks#Authorised 7anks by debit to /< Accounts may continue provided that theamount deposited with such entities doesnot represent inward remittances or transferfrom /0#&" /%7) Accounts into the /I7


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: 'age 2:4mount of loan;'resentl" loansagainst NR $/CNRdeposits can beallowed onl" up toRs. 1 lacs% interms of R,*guidelines

;+ years >I7


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c) ships stores, trans shipment cargoand goods supplied under the ordersof !entral "overnment or of suchofficers as may be appointed by the!entral "overnment in this behalf orof the military, naval or air forceauthorities in #ndia for military, navalor air force re$uirements;d) goods or software accompanied

by a declaration by the exporterthat they are not more thantwenty five thousand %&' invalue;

e) by way of gift of goodsaccompanied by a declaration

by the exporter that they are notmore than five la(hs rupees in

value ;f) aircrafts or aircraft engines and

spare parts for overhaulingand or repairs abroad sub*ect totheir re import into #ndia afteroverhauling repairs, within a

period of six months from thedate of their export;

g) goods imported free of cost onre export basis;

h) goods not exceeding %&' +or its e$uivalent in value pertransaction exported to-yanmar under the .arter/rade 0greement between the!entral "overnment and the"overnment of -yanmar;

i) /he following goods which are permitted by the 'evelopment!ommissioner of the 1xport2rocessing ones, Electronic

Hardware Technology Parks, Electronic Software

Technology Parks or 4ree/rade ones to be re exported,namely:

+) imported goods founddefective, for the purpose oftheir replacement by the foreignsuppliers collaborators;

5) goods imported from foreign


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suppliers collaborators on loan basis;

3) goods imported from foreignsuppliers collaborators free ofcost, found surplus after

production operations67ia) goods listed at items (1), (2)

and (3) of clause (i) to e re!e"#orted y units in S#ecial

Economic $ones, underintimation to the %e&elo#ment'ommissioner of S#ecial

Economic $ones concerned ssistant 'ommissioner or %e#uty 'ommissioner of'ustoms*

*) replacement goods exported

free of charge in accordancewith the provisions of 18#-2olicy in force, for the time

being6k) goods sent outside +ndia for

testing su ect to re!im#ort into +ndia*

l) defecti&e goods sent outside +ndia for re#air and re!im#ort #ro&ided the goods areaccom#anied y a certificate

from an uthorised %ealer in +ndia that the e"#ort is forre#air and re!im#ort and thatthe e"#ort does not in&ol&e anytransaction in foreigne"change*

m) exports permitted by theReserve .an(, on applicationmade to it, sub*ect to the termsand conditions, if any, asstipulated in the permission6

1& 'age 9:1. 're-

shipment/inance

*tem 1 - he rate ofinterest is lin!ed tothe ,enchmar!'rime endingRate ,' R788.

/he .ase Rate &ystem is applicable witheffect from 9uly +, 5 + 6 0ccordingly, interestrates applicable for all tenors of rupee exportcredit advances sanctioned on or after 9uly +,5 + are at or above .ase Rate6

13 'age 1 ( *nterest on 'C/C .an(s are free to determine the interest rates


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ast para on export credit in foreign currency with

effect from -ay , 5 +561( 'age 111

4dvanceRemittances

Conditions foradvanceremittances88888..

0dvance Remittance for import of goods

7i) 0' !ategory # ban( may allow advanceremittance for import of goods without anyceiling sub*ect to the following conditions:

7a) #f the amount of advance remittanceexceeds %&' 5 , or its e$uivalent, anunconditional, irrevocable standby


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for imports shall be sub*ect to the specifiedconditions6

12 'age 11(*nterest rateceilings on ,u"ers>credit andSuppliers> credit

Up to 362 da"s*,5R plus & bps4bove 1 "ear up to 3"ears *,5R plus& bps

%p to + year

-ore than + year up to 3 years 3 bps

16 'age 121& 47 /Caccount

ver" recipient offoreign e#change isallowed to retain1 ? of the amountin a foreign currenc"account% with an"4+.

credit of 100% foreign exchange earnings to the 114! account allowed sub*ect to thecondition that the sum total of the accruals inthe account during a calendar month should

be converted into Rupees on or before the lastday of the succeeding calendar month afterad*usting for utili>ation of the balances forapproved purposes or forward commitments6

1) 'age 1261. #ternal

Commercial,orrowings

i 74utomaticroute

US+ & million witha minimum averagematurit" of 3 "ears

1!. up to %&' 5 million or its e$uivalent ina financial year with minimum averagematurity of three years

1: 'age 126#ternal

Commercial,orrowings i 74utomatic route

4bove US+ &million and up toUS+ 2 million withaverage maturit" of 2"ears

1!. above %&' 5 million or e$uivalentand up to %&' ? million or itse$uivalent with a minimum averagematurity of five years6

19 'age 12) he all-in cost% whichincludes interest andother e#penses%e#cept commitmentfees% prepa"mentfees or other feespa"able in *ndianRupees should be

3 basis pointsabove si# months*,5R for average

maturit" period ofthree to five "ears%and 2 bps abovesi# months *,5Rfor average maturit"of over five "ears..

0verage 0ll in cost

-aturity !eilings

2eriod over @ month


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five years basis points

B for the respective currency of borrowing orapplicable benchmar(

Incoterms 2010

-he Incoterms rules are an internationally recogni4ed standard and are used worldwide in internationaland domestic contracts for the sale of goods. &irst published in @;?, Incoterms rules provideinternationally accepted definitions and rules of interpretation for most common commercial terms.Incoterms * * were launched in mid+(eptember * * and came into effect on Banuary * .

-he rules have been developed and maintained by e perts and practitioners brought together by I"" andhave become the standard in international business rules setting. -hey help traders avoid costly

misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers tobuyers. Incoterms rules are recogni4ed by ' "I-/A> as the global standard for the interpretation of themost common terms in foreign trade.

*t ma" be noted that all contracts made under *NC5 R@S & remain valid evenafter & 11. @oreover% parties to a contract for the sale of goods can agree to choosean" version of the *ncoterms rules after & 11. *t is important however to clearl" specif"the chosen version *NC5 R@S & 1 % *NC5 R@SA & or an" earlier version.

Main features of t"e Incoterms 2010 rules

1 Two new Incoterms rules DAT and DAP have replaced the Incoterms 2000rules DAF, DES, DEQ and DDU

he number of *ncoterms rules has been reduced from 13 to 11. his has beenachieved b" substituting two new rules that ma" be used irrespective of the agreedmode of transport +4 % +elivered at erminal% and +4'% +elivered at 'lace for the*ncoterms & rules +4/% + S% + B and ++U.

Under both new rules% deliver" occurs at a named destination; in +4 % at the bu"er>sdisposal unloaded from the arriving vehicle as under the former + B rule7 in +4'%li!ewise at the bu"er>s disposal% but read" for unloading as under the former +4/% + Sand ++U rules7.

he new rules ma!e the *ncoterms & rules + S and + B superfluous. he namedterminal in +4 ma" well be in a port% and +4 can therefore safel" be used in cases

where the *ncoterms & rule + B once was. i!ewise% the arriving DvehicleE under+4' ma" well be a ship and the named place of destination ma" well be a port;conse=uentl"% +4' can safel" be used in cases where the *ncoterms & rule + Sonce was. hese new rules% li!e their predecessors% are DdeliveredE% with the seller


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bearing all the costs other than those related to import clearance% where applicable7and ris!s involved in bringing the goods to the named place of destination.

2 lass!"!cat!on o" the ## Incoterms 20#0 rules

he 11 *ncoterms & 1 rules are presented in two distinct classes;

RU S /5R 4NF @5+ 5R @5+ S 5/ R4NS'5R

&' G H5RIS

F)A /R C4RR* R

)*+ C4RR*40 '4*+ 5

)I* C4RR*40 4N+ *NSUR4NC '4*+ 5

,A+ + *J R + 4 R@*N4

,A* + *J R + 4 ' 4C

,,* + *J R + +U F '4*+

RU S /5R S 4 4N+ *N 4N+ H4 RH4F R4NS'5R

FA /R 4 5N0S*+ S *'

FOB /R 5N ,54R+

)F. C5S 4N+ /R *0

)IF C5S *NSUR4NC 4N+ /R *0

he first class includes the seven *ncoterms & 1 rules that can be used irrespective ofthe mode of transport selected and irrespective of whether one or more than one modeof transport is emplo"ed. GH% /C4% C' % C*'% +4 % +4' and ++' belong to thisclass. he" can be used even when there is no maritime transport at all. *t is importantto remember% however% that these rules can be used in cases where a ship is used for

part of the carriage.

*n the second class of *ncoterms & 1 rules% the point of deliver" and the place to whichthe goods are carried to the bu"er are both ports% hence the label Dsea and inland

waterwa"E rules. /4S% /5,% C/R and C*/ belong to this class. Under the last three*ncoterms rules% all mention of the ship>s rail as the point of deliver" has been omitted inpreference for the goods being delivered when the" are Don boardE the vessel. his


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more closel" reflects modern commercial realit" and avoids the rather dated image ofthe ris! swinging to and fro across an imaginar" perpendicular line.

he *ncoterms & 1 rules clearl" state in a number of places that the obligation tocompl" with e#port$import formalities e#ists onl" where applicable.

Electron!c commun!cat!on

'revious versions of *ncoterms rules have specified those documents that could bereplaced b" +* messages. 4rticles 41$,1 of the *ncoterms & 1 rules% however% nowgive electronic means of communication the same effect as paper communication% aslong as the parties so agree or where customar". his formulation facilitates theevolution of new electronic procedures throughout the lifetime of the *ncoterms & 1rules.

Secur!t$%related clearances and !n"ormat!on re&u!red "or such clearances

here is heightened concern nowada"s about securit" in the movement of goods%re=uiring verification that the goods do not pose a threat to life or propert" for reasonsother than their inherent nature. herefore% the *ncoterms & 1 rules have allocatedobligations between the bu"er and seller to obtain or to render assistance in obtainingsecurit"-related clearances% such as chain-of-custod" information% in articles 4&$,& and41 $,1 of various *ncoterms rules.

Term!nal handl!n' char'es

Under *ncoterms rules C' % C*'% C/R% C*/% +4 % +4'% and ++'% the seller must ma!e

arrangements for the carriage of the goods to the agreed destination. Hhile the freightis paid b" the seller% it is actuall" paid for b" the bu"er as freight costs are normall"included b" the seller in the total selling price. he carriage costs will sometimes includethe costs of handling and moving the goods within port or container terminal facilitiesand the carrier or terminal operator ma" well charge these costs to the bu"er whoreceives the goods. *n these circumstances% the bu"er will want to avoid pa"ing for thesame service twice; once to the seller as part of the total selling price and onceindependentl" to the carrier or the terminal operator. he *ncoterms & 1 rules see! toavoid this happening b" clearl" allocating such costs in articles 46$,6 of the relevant*ncoterms rules.

Str!n' sales *n the sale of commodities% as opposed to the sale of manufactured goods% cargo isfre=uentl" sold several times during transit Ddown a stringE. Hhen this happens% a sellerin the middle of the string does not DshipE the goods because these have alread" beenshipped b" the first seller in the string. he seller in the middle of the string thereforeperforms its obligations towards its bu"er not b" shipping the goods% but b" DprocuringEgoods that have been shipped. /or clarification purposes% *ncoterms & 1 rules include


20/28

the obligation to Dprocure goods shippedE as an alternative to the obligation to shipgoods in the relevant *ncoterms rules.

RU S /5R 4NF @5+ 5R @5+ S 5/ R4NS'5R

,&*A.+U.& &' orks (named place

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen the seller ma!es the goods available at the seller>s premises or anothernamed place. Such a named place can be wor!s% factor"% warehouse etc.7

2 .esponsibilit% of t"e seller

*n theor" onl" as per 17 above% however% in practice ma" gives assistance inloading etc. if so should agree to this in the sales contract with reference to whichpart" is responsible for costs and ris!. 4lso render an" assistance in documentprocuring etc.

3 .esponsibilit% of t"e bu%er

4ll costs and ris!s involved in transporting the goods from the seller>s premisesto the bu"er>s place of destination.

OB &.4A+IO/

his represents the minimum e#port responsibilit" of the e#porter and ma#imum of theimporter.

*f the importer cannot carr" out the e#port formalities then the F)A term isrecommended.

Insurance 5 the seller must provide the bu"er% upon re=uest% with the necessar"information for procuring insurance.

MAI/ )A..IA6& U/*AI, F)A Free )arrier (named place

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen the seller delivers the goods% cleared for e#port% to the carrier nominatedb" the bu"er at the named place


21/28

/O+& A *f deliver" ta!es place at the seller>s premises% the selleris responsible for unloading.

B *f deliver" occurs at an" other place% the seller is notresponsible for unloading.

) *f no specific point has been agreed within the named place%and there are several points available% the seller ma" selectthe point at the place of deliver"% which best suits the seller>spurpose.

, *n the absence of precise instructions from the bu"er% theseller ma" deliver the goods for carriage in a manner to suitthe transport mode and$or =uantit" and$or nature of thegoods re=uired.

2 .esponsibilit% of t"e seller&.1 +eliver the goods at the named point into the custod" of the carrier named

b" the bu"er

&.& #port clearance re=uirements

&.3 'rovide evidence of deliver" of the goods to the carrier


3.1 Nominate the carrier

3.& Contract for the carriage and pa" the freight

OB &.4A+IO/

his term is suitable for all modes of transport including MU7+IMO,A7 +.A/ *O.+DCarrierE means an" person who% in a contract of carriage% underta!es to perform or toprocure the performance of transport b" rail% road% air% inland waterwa" or b" acombination of such modes. *f a person is not a carrier and is nominated b" the bu"er%deliver" to that person will have fulfilled the deliver" re=uirements under F)A


MAI/ )A..IA6& *AI, )*+ )arriage *aid +o (name place of destination

*OI/+ +O .&M&MB&.


22/28

1 ,eli er% point

Hhen and where the seller delivers the goods to the carrier nominated b" theseller


&.1 Contract for carriage and pa" the freight to the named port of destination

&.& + *J R 055+S *N 5 4N+S 5/ /*RS C4RR* R

&.3 4rrange e#port clearance including costs

&.( 4rrange for the bu"er to receive an invoice and the usual transportdocument

3 .esponsibilit% of t"e bu%er3.1 4ccept the goods when the" are delivered to the first carrier

3.& 4ccept deliver" of the goods as long as the" are in accordance with thecontract at the named place of destination.

OB &.4A+IO/

*t must be stressed that the deliver" to the first carrier is the dividing point for ris! ofdamage to the goods irrespective of whether subse=uent other carrier are used7.

8)arrier9 5 means an" person who% in a contract% underta!es to perform or to procurethe performance of transport b" rail% road% air% sea% inland waterwa" or b" a combinationof such modes.


MAI/ )A..IA6& *AI, )I* )arriage and Insurance *aid +o (namedplace of destination

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen and where the seller delivers the goods to the carrier nominated b" theseller.


23/28



&.& + *J R 055+S *N 5 4N+S 5/ /*RS C4RR* R


&.( Contract for the insurance of the goods during the carriage and pa" theinsurance premium

&.2 4rrange for the bu"er to receive an invoice% usual transport document anda cargo insurance polic" or other evidence of insurance


3.1 4ccept deliver" of the goods when the" are delivered to the first carrierand

3.& 4ccept the goods when the invoice% the cargo insurance polic" or theirevidence of insurance cover and if customar" the usual transportdocument are tendered to the bu"er.

3.3 Received the goods at the named place of destination as long as the" arein accordance with the contract at the named place of destination.

OB &.4A+IO/

*t must be stressed that the deliver" to the first carrier is the dividing point for ris! ofdamage to the goods irrespective of whether subse=uent other carrier>s are used7.8)arrier9 5 means an" person who% in a contract% underta!es to perform or to procurethe performance of transport b" rail% road% air% sea% inland waterwa" or b" a combinationof such modes.


,eli er% ,ut% *aid (named place of destination

*OI/+ +O .&M&MB&.

1 ,eli er% pointHhen and where the seller delivers the goods to the bu"er% cleared for import%and not unloaded from an" arriving means of transport at the named place ofdestination.


24/28


&.1 +eliver the goods to the named place of destination.

&.& 4rrange documentation to allow the bu"er to ta!e deliver" at the named

place e.g. deliver" order% document of transport.

&.3 4rrange import clearance b" obtaining an" import license if relevant% pa"import duties% ta#es and fees re=uired


3.1 a!e deliver" of the goods at the named place of destination

he term ,,* represents the ma#imum obligation for the seller would be the opposite

to &'*f the parties want to e#clude some obligation from the seller e.g. 4A+ such a decisionshould appear in the )O/+.A)+ OF A7&

RU S /5R S 4 4N+ *N 4N+ H4 RH4F R4NS'5R

MAI/ )A..IA6& U/*AI, FA Free Alongside "ip (named port ofs"ipment

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen and where the goods are placed alongside the vessel at the named port ofshipment


&.1 +eliver the goods alongside the ship

&.& 'rovide the usual proof of deliver" e.g. Dalongside receiptE

&.3 Clear the goods for e#port




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3.& Contract for carriage and freight

OB &.4A+IO/


6.OU* FMAI/ )A..IA6& U/*AI, FOB Free on Board (named port of s"ipment

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen the goods have passed over the ship>s rail at the named port of shipment2 .esponsibilit% of t"e seller

&.1 Clear the goods for e#port

&.& +eliver" the goods on board

&.3 'rovide a clean on board receipt&.( 'a" loading costs according to the custom of the port but not costs that

relate to the freight



3.& Contract for carriage and pa" the freight

3.3 'a" an" loading costs that relate to the actual freight

3.( 'a" unloading costs

OB &.4A+IO/

*f goods are not intended to be delivered across the ship>s rail the F)A terms should beused.

Insurance 5 the seller must provide the bu"er% upon re=uest with the necessar"information for procuring insurance.


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MAI/ )A..IA6& U/*AI, )F. )ost and Freig"t (named port ofdestination

*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen the goods have passed over the ship>s rail in the port of shipment



&.& +eliver the goods on board

&.3 4rrange e#port clearance including costs&.( 'rovide the bu"er with an invoice and a clean transport document e.g. bill

of lading% sea wa"bill7

&.2 'a" loading costs

&.6 'a" an" unloading costs that ma" be included in the freight.


3.1 Receive the goods at the named port of destination3.& 4ccept the goods as long as the" are in accordance with the contract

3.3 'a" an" unloading costs that are covered in the freight.

OB &.4A+IO/

*t must be stressed that the ship>s rail is the dividing point for ris! of damage to thegoods.

*f it is not intended that the ships rail should not be the critical point for ris! than the C'term should be used e.g. roll on$roll or container traffic.


MAI/ )A..IA6& *AI, )IF )ost: Insurance and Freig"t (named port ofdestination


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*OI/+ +O .&M&MB&.

1 ,eli er% point

Hhen the goods have passed over the ship>s rail in the port of shipment



&.& +eliver the goods on board


&.( Contract for the insurance of the goods whilst in transit and pa" theinsurance premium

&.2 'rovide the bu"er with an invoice and a clean transport document e.g. billof lading% sea wa" bill7 and a cargo insurance polic" certificate

&.6 'a" loading costs

&.) 'a" an" unloading costs that ma" be included in the freight


3.1 Receive the goods at the named port of destination

3.& 4ccept the goods as long as the" are in accordance with the contract

3.3 'a" an" unloading costs that are covered in the freight.OB &.4A+IO/

*t must be stressed that the ship>s rail is the dividing point for ris! of damage to thegoods% however the ris! of loss or damage to the goods% as well as an" costs occurringafter deliver" are transferred from the seller to the bu"er.

*f it is not intended that the ships rail should not be the critical point for ris! than the C'term should be used e.g. roll on$roll off or container traffic.

Insurance 5 the bu"er procures the insurance% however minimum cover onl" is re=uiredunder *ncoterms. *f the bu"er wants to increase the insurance protection than% anarrangement must be made with the seller or alternativel" ma!e his or her own e#trainsurance arrangements.


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update on international banking b fm

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