INCOTERMS 2000

The INCO Terms are a universally recognised set of definitions used for International Trade.

The INCO Terms were developed by the International Chamber Of Commerce (France) and define the responsibilities of the parties (buyer and seller) in an international trade transaction.

The most recent version of these terms was released in the year 2000 and an official publication detailing the roles and responsibilities of each party is available from the International Chamber of Commerce representative in each country.

Following is a summary of the most common INCO Terms

EXW
Ex Works
(named place) means that the seller fulfills his obligation when the goods have been made available to the buyer at the seller premises. He is not responsible under this term for loading the goods on the vehicle provided by the buyer or for clearing the goods through customs for export (unless otherwise agreed).  The buyer bears all costs and the risk of loss or damage to goods from that point forward.

FOB
Free On Board
(named port of shipment) means that the seller fulfills his obligation when the goods have passed over the ship’s rail at the named port of the shipment. The buyer bears all costs and the risk of loss or damage to goods from that point forward.

CFR
Cost and Freight
(named port of destination) means that the seller fulfils his obligation when the goods have passed over the ship’s rail at the named port of the shipment. The seller pays for the cost of freight to the named port of destination but the buyer assumes all risks and any further costs from that point forward.

CIF
Cost Insurance and Freight
(named port of destination) means that the seller fulfils his obligation when the goods have passed over the ship’s rail at the named port of the shipment. The seller pays for the cost of freight to the named port of destination but the buyer assumes all risks and any further costs from that point forward.

The seller must also procure insurance to cover the buyers risk of loss or damage during carriage.

DDU
Delivered Duty Unpaid (named place of destination) means that the seller is responsible for delivering the goods to the buyer at the named port of destination but not customs cleared and not unloaded from arriving vessel or aircraft. The seller bears all costs and the risk of loss or damage to the goods up to the point of arrival in the named port of destination. The buyer is responsible for paying duty, taxes and customs clearance costs.

DDP
Delivered Duty Paid
(named place of destination) means that the seller is responsible for delivering the goods to the buyer at the named port of destination including customs clearance but  not unloaded from arriving vessel or aircraft. The seller bears all costs and the risk of loss or damage to the goods up to the point of arrival in the named port of destination including duty, taxes and customs clearance costs.

Source – http://www.iccwbo.org/incoterms/

Other terms include:

FAS
Free Alongside Ship
(named port of shipment) means that the seller bears all costs and fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay at the named port of shipment.  The buyer bears all costs and risks of loss or damage from the moment.

FCA
Free Carrier
(named place) means that the seller fulfills his obligation when he has handed over the goods cleared for export in the charge of the carrier named by the buyer at the name place.

CPT
Carriage Paid To (named place of destination) means that the seller pays the freight for the carriage of the goods to the named destination. The buyer assumes responsibility for the costs and the risks associated with loss or damage once control of the goods has been transferred to the carrier.

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