The Incoterms® rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade.
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW Ex Works (Named place of delivery)
Risk and cost pass to the buyer at seller’s door. Seller must provide required information for security clearance of goods.
FCA Free Carrier (Named place of delivery)
Risk and cost pass to the buyer when the seller delivers to the “named place of delivery”. Normally at seller’s door or first terminal/port. Seller is required to clear the goods for export.
CPT Carriage Paid To (Named place of destination)
Risk passes to buyer when seller delivers to first carrier. Cost transfers when seller delivers to the “named place of destination”. Seller may be responsible for unloading cost at named place of destination – depending on contract agreement between the parties.
CIP Carriage And Insurance Paid To (Named place of destination)
Risk passes to buyer when seller delivers to first carrier. Cost transfers when seller delivers to the “named place of destination”. Seller may be responsible for unloading cost at named place of destination – depending on contract agreement between the parties. Seller to provide cargo insurance at a minimum as provided by Clauses (C) of the Institute Cargo Clauses.
DAT Delivered At Terminal (Named terminal at port or place of destination)
Risk and costs pass to the buyer when the seller delivers at the “named terminal at port or place at destination”. Seller is responsible for unloading cost at the named terminal at port or place of destination.
DAP Delivered At Place
“Delivered at Place” means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place.
DDP Delivered Duty Paid
“Delivered Duty Paid” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and 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.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS Free Alongside Ship (Named Sea port of shipment)
Risk and cost pass to buyer when seller has placed the goods along- side the ship in the named port. This term is mainly for bulk cargo. Seller is required to clear the goods for export.
FOB Free On Board (Named Sea port of shipment)
Risk and cost pass to buyer when the goods are on board vessel in the “named port”.
CFR Cost And Freight (Named Sea port of shipment)
Risk passes to buyer when the goods are on board the vessel in the port of departure. Cost transfers when seller delivers to the “named port of destination”. Destination costs are payable according to contract agreement between the parties.
CIF Cost, Insurance and Freight (Named Sea port of shipment)
Risk passes to buyer when the goods are on board the vessel in the port of departure. Cost transfers when seller delivers to the “named port of destination”. Seller to provide cargo insurance at a minimum as provided by Clauses (C) of the Institute Cargo Clauses. Destination costs are payable according to contract agreement between the parties.