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Wednesday, 13 December 2017

Incoterms 2017 EXW | FCA | FAS | FOB | CFR | CIF | CPT by ICC

  By GK Planet Team       Wednesday, 13 December 2017

 Incoterms 2017

Incoterms 2017 EXW | FCA | FAS | FOB | CFR | CIF | CPT 
» The word INCOTERM is an abbreviation for International Commercial Terms which provide a common set of rules used for defining the responsibilities of sellers and buyers in the delivery of goods under sales contracts.
» The Incoterms rules or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law.
» They are widely used in International commercial transactions or procurement processes as the use in international sales is encouraged by trade councils, courts and international lawyers.
» A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. Incoterms inform sales contract defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer. However, it does not constitute a contract or govern law. Also, it does not define where titles transfer and does not address the price payable, currency or credit items.
» INCO terms are standard trade definitions most commonly used in international sales contracts. Devised and published by the International Chamber of Commerce, they are at the heart of world trade.
» ICC introduced the first version of INCO terms short for "International Commercial Terms" - in 1936.
» The first work published by the ICC on international trade terms was issued in 1923, with the first edition known as Incoterms published in 1936. the Incoterms rules were amended in 1953,[3] 1967, 1976, 1980, 1990, and 2000, with the eighth version— Incoterms 2010[4] — having been published on January 1, 2011.
» The ICC has begun consultations on a new revision of Incoterms, to be called Incoterms 2020. "Incoterms" is a registered trademark of the ICC.

Rules for any mode of transport

·    EXW – Ex Works (named place of delivery)
·    FCA – Free Carrier (named place of delivery)
·    CPT – Carriage Paid To (named place of destination)
·    CIP – Carriage and Insurance Paid to (named place of destination)
·    DAT – Delivered At Terminal (named terminal at port or place of destination)
·    DAP – Delivered At Place (named place of destination)
·    DDP – Delivered Duty Paid (named place of destination)

Rules for sea and inland waterway transport

·    FAS – Free Alongside Ship (named port of shipment)
·    FOB – Free on Board (named port of shipment)
·    CFR – Cost and Freight (named port of destination)
·    CIF – Cost, Insurance & Freight (named port of destination)

EXW – Ex Works (named place of delivery)

Ex Works (EXW) is an international trade term that describes an agreement in which the seller is required to make goods ready for pickup at his or her own place of business. All other transportation costs and risks are assumed by the buyer.


FCA – Free Carrier (named place of delivery)


Incoterms-FCA. "Free Carrier" means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point.

CPT – Carriage Paid To (named place of destination)

Carriage paid to (CPT) is a commercial term denoting that the seller delivers the goods to a carrier or to another person nominated by the seller, at a place mutually agreed upon by the buyer and seller, and that the seller pays the freight charges to transport the goods to the specified destination.

CIP – Carriage and Insurance Paid to (named place of destination)


Carriage and Insurance Paid To (CIP) Can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage to the named place, and also for insuring the goods.

As with CPT, delivery of the goods takes place, and risk transfers from seller to buyer, at the point where the goods are taken in charge by carrier


DAT – Delivered At Terminal (named terminal at port or place of destination)


This term is more specific and used when delivery ends at named terminal on specific port ofdestination and unloaded. Seller pays all expenses until place of delivery and buyer pays for customs clearance and taxes at destination. As all D-terms risk and delivery happen at the same time atdestination.

DAP – Delivered At Place (named place of destination)

Delivered At Place means 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 assumes all risks involved in bringing the goods to the named place.

DDP – Delivered Duty Paid (named place of destination)


Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes.

FAS – Free Alongside Ship (named port of shipment)

Incoterms-FAS. "Free Alongside Ship" means that the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

FOB – Free on Board (named port of shipment)


FREE ON BOARD means the seller fulfills its obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that point. FREE ON BOARD requires the seller to clear the goods for export.

CFR – Cost and Freight (named port of destination)

Cost and freight (CFR) is a legal term used in international trade. In a contract specifying that a sale is made CFR, the seller is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier. Under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit.


CIF – Cost, Insurance & Freight (named port of destination)

"Cost, Insurance and Freight" means that the seller delivers when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer.
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