Incoterms Incoterms are standard trade definitions most commonly used in international sales contracts. Devised and published by the International Chamber of Commerce, the 13 Incoterms define mainly whether it is the buyer or the seller who is paying for and bearing the risk during the transportation of the goods. The following guidelines point out the correct usage of the terms.

Make sure of the meaning To ensure you are using Incoterms correctly, please consult the full ICC texts. These are discussed and available to order in 31 languages at www.iccwbo.org and www.incoterms.com. The importance of Incoterms Incoterms cut out uncertainties arising from Incoterm

EXW

Named place

Ex works

Sharing of costs and risk between buyer and seller in international traffic.

differing interpretations of transportation

Loading

terms in different countries, and go a long

location

way towards providing the legal certainty upon which mutual confidence between business partners must be based.

Loading

FCA

Free Carrier

FAS

Free Alongside

Port of

Ship

loading

location

Incoterms and named place Incoterms include a named place that is extremely important to incorporate in the

FOB

agreement. If the terms are EXW or FCA,

Port of

Free On Board

the loading location should be mentioned.

loading

For FAS and FOB, the port of loading must

CFR

Cost And Freight

be marked. And for CFR and CIF the

Port of

destination port is mentioned. For CIP, DDU

destination

and DDP the final delivery address is

CIF

Cost, Insurance And Freight

destination

CIP

Freight And

Delivery

Insurance Paid

location

DDU DDP

Delivered Duty Unpaid Delivery

important to indicate.

Port of

General inquiries:

Delivered Duty Paid

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Copyright ' JF Hillebrand Group AG, 2003.

location

The information provided herein is for Seller s cost / risk

Buyer s cost / risk

reference only; it has no contractual or legal value.

Examples EXW (Ex Works). Does not oblige the seller to load the goods into the truck or container, nor does it oblige the seller to fulfil the necessary export customs formalities. Note: EXB (Ex Brewery) and EXC (Ex Cellars) are not valid Incoterms. FCA (Free Carrier). Exporter must load the goods and provide the export documentation. FOB Warehouse . Not a valid Incoterm. Erroneously used instead of FCA (Free Carrier), which indicates that pre-carriage and terminal handling charges (THC) in the port of loading are for the buyer s account .

FOB (Free On Board). Seller pays for the THC. FAS (Free Alongside Ship). Buyer pays for the THC incurred at terminal of origin. Note: Under the 2000 version of the Incoterm FAS, the seller is required to clear the goods for export. CFR (Cost And Freight). The costs and risks of transport are disconnected. While seller pays for the main carriage, buyer is liable for loss and damage during transportation and should be properly insured. DDU (Delivered Duty Unpaid). Buyer pays for duties and customs clearance. DDP (Delivered Duty Paid). Seller pays both duties and customs clearance. Note: Whether wine and spirits excise tax is included or not must be specifically agreed as these are not part of the import duties.