International Commercial Terms

International Banking
Chapter 10: International Commercial Terms
Purpose of Incoterms
1. Pricing of goods
2. Arrangement and payment
3. Risk coverage
4. Compensation for loss or damage
5. Obligation of clearance
Origin of Incoterms
International Chamber of Commerce, Paris

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Overview of Incoterms Latest amendments: 2010 11 Incoterms
Incoterms for Any Mode of Transportation
1. EXW (Ex Works)

The seller makes the goods available to be collected at their premises and the buyer is responsible for all other risks, transportation costs, taxes and duties from that point onwards. This term is commonly used when quoting a price.
Export Incote Custo rm ms 2010 declar ation
Carria ge to port of export
Unloa ding of truck in port of export
Loadi ng charg es in port of export
Carria ge (Sea Freigh t/Air Freigh t) to port of import
Unloa Loadi ding ng on charg Insura truck es in nce in port port of of import import
Carria Import ge to custo place Import ms of taxes cleara destin nce ation
EXW Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FCA FAS FOB CFR CIF CPT CIP DAT Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DAP
Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
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2. FCA (Free Carrier)

The seller gives the goods, cleared for export, to the buyers carrier at a specified place. The seller is responsible for getting them to the specified place of delivery. This term is commonly used for containers travelling by more than one mode of transport.
FCA Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer FAS FOB CFR CIF CPT CIP DAT Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DAP
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3. CPT (Carriage Paid To)

The seller pays to transport the goods to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier.
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FCA FAS FOB CFR CIF Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer
CPT Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer Buyer CIP DAT Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DAP
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4. CIP (Carriage and Insurance Paid)

The seller pays for insurance as well as transport to the specified destination. Responsibility for the goods transfers to the buyer when the seller passes them to the first carrier. CIP (Carriage and Insurance Paid) is commonly used for goods being transported by container by more than one mode of transport. If transporting only by sea, CIF is often used.
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DAP
13
5. DAT (Delivered at Terminal)

The seller pays for transport to a specified terminal at the agreed destination. The buyer is responsible for the cost of importing the goods. The buyer takes responsibility until the goods are unloaded at the terminal.
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DAP
15
6. DAP (Delivered at Place)

The seller pays for transport to the specified destination, but the buyer pays the cost of importing the goods. The seller takes responsibility for the goods until theyre ready to be unloaded by the buyer.
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DAP Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
7. DDP (Delivered Duty Paid)

The seller is responsible for delivering the goods to the named destination in the buyers country, including all costs involved.
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DAP
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Incoterms Only for Sea and Inland Waterways
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8. FAS (Free Alongside Ship)

The seller puts the goods alongside the ship at the specified port theyre going to be shipped from. The seller must get the goods ready for export, but the buyer is responsible for the cost and risk involved in loading them. This term is commonly used for heavy-lift or bulk cargo (eg generators, boats), but not for goods transported in containers by more than one mode of transport (FCA is usually used for this).
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DAP
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9. FOB (Free on Board)

The seller must get the goods ready for export and load them onto the specified ship. The buyer and seller share the costs and risks when the goods are on board. This term is not used for goods transported in containers by more than one mode of transport (FCA is usually used for this).
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FCA FAS Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FOB Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer CFR CIF CPT CIP DAT Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DAP
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10. CFR (Cost and Freight)

The seller must pay the costs of bringing the goods to the specified port. The buyer is responsible for risks when the goods are loaded onto the ship.
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FCA FAS FOB Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer
CFR Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer CIF CPT CIP DAT Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer
DAP
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11. CIF (Cost, Insurance and Freight)

The seller must pay the costs of bringing the goods to the specified port. They also pay for insurance. The buyer is responsible for risks when the goods are loaded onto the ship.
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DAP
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Thank you!
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International Banking

Chapter 10: International Commercial Terms

2. Arrangement and payment

4. Compensation for loss or damage

International Chamber of Commerce, Paris

Overview of Incoterms Latest amendments: 2010 11 Incoterms

Incoterms for Any Mode of Transportation

1. EXW (Ex Works)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

2. FCA (Free Carrier)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

3. CPT (Carriage Paid To)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

4. CIP (Carriage and Insurance Paid)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

5. DAT (Delivered at Terminal)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

6. DAP (Delivered at Place)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

7. DDP (Delivered Duty Paid)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

Incoterms Only for Sea and Inland Waterways

8. FAS (Free Alongside Ship)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

9. FOB (Free on Board)

Export Incote Custo rm ms 2010 declar ation

Carria ge to port of export

Unloa ding of truck in port of export

Loadi ng charg es in port of export

Carria ge (Sea Freigh t/Air Freigh t) to port of import

10. CFR (Cost and Freight)

Export Incote Custo rm ms 2010 declar ation