Incoterms Flashcards
Incoterms Governs what?
The Contract of Sale
EXW
Ex Works -Seller Packs goods, Buyer Bears all risk and cost
FCA
Free Carrier- Seller delivers the goods to the named carrier chosen by the buyer or any party authorized to pick up the
goods. The seller is responsible to clear the goods for export.
Buyer must instruct the carrier to provide seller with an on-board transport document at the buyer’s cost
and risk.
* Buyer bears all risks and costs for the carriage of the goods after delivered to the carrier. He is responsible
for any import customs formalities.
FAS
FREE ALONGSIDE SHIP- Seller clears the goods for export and delivers the properly packed goods alongside the buyer-designated
vessel at the port on the seller’s side.
* Buyer bears all risks and costs of the carriage of goods after delivery alongside the vessel at the port of load
until final destination (vessel loading, main carriage, import clearance, on carriage).
FOB
FREE ON BOARD
eller clears the goods for export and delivers the properly packed goods on board the buyer-designated
vessel at the port on the seller’s side.
* Buyer bears all risks and costs associated with the carriage of goods after the delivery on board of the
vessel at the named origin port until destination (main carriage, import clearance, on carriage).
CFR
COST AND FREIGHT
Seller clears the goods for export and delivers the goods appropriately export packed on board the seller-
designated vessel at the port on the seller’s side (unload not included). Pays transportation costs to the
agreed port on buyer’s side.
* Buyer assumes all risks after the delivery of the goods on board the vessel at the port of load. Also
responsible for unloading, import clearance, and on carriage.
CIF
COST, INSURANCE AND FREIGHT
Seller clears the goods for export and delivers them appropriately export packed on board the seller-
designated vessel at the port on the seller’s side (unloaded not included). Transportation costs to the
agreed port on the buyer’s side and insurance are on the seller’s account. Requirements for the insurance
is just for the minimum coverage.
* Buyer is responsible for the unloading costs at the named port of destination, and for any import
formalities. Risks are transferred from seller to buyer when the goods are on board the vessel at the origin
port of load.
* CIF = CFR + Insurance
CPT
CARRIAGE PAID TO
Seller clears the goods for export and delivers the good appropriately packaged to the carrier for
transportation to the named destination and pay all transport costs thereto. (The seller delivers to the first
carrier unless specified otherwise in the sales contract)
* Buyer bears the risk for the carriage of the goods after the seller delivers them to the first carrier at origin.
The buyer is also responsible for clearing the goods at destination, arranging the on carriage (depending on
the named destination), and unloading.
CIP
CARRIAGE AND INSURANCE PAID TOSeller clears the goods for export and delivers the good appropriately packaged to the carrier for
transportation to the named destination and pay all transport costs thereto (The seller delivers to the first
carrier unless specified otherwise in the sales contract). Seller is also responsible for insurance coverage for
maximum coverage.
* Buyer bears the risk for the carriage of the goods after the seller delivers them to the first carrier at origin.
The buyer is also responsible for clearing the goods at destination, arranging the on carriage (depending on
the named destination), and unloading.
* CIP = CPT + Insurance
DAP
DELIVERY AT PLACE
Seller clears the goods for export, and delivers the goods appropriately packaged at the named destination
and pays all transport costs thereto.
* Buyer bears all risks and costs from the destination named place and forward including customs clearing of
goods at destination including unloading.
DPU
DELIVERY AT PLACE UNLOADED
Seller clears the goods for export, delivers the goods appropriately packed at the named destination and
pay all transport costs thereto, unloading included.
* Buyer bears all risks and costs from the named destination and the import clearing customs.
DDP
DELIVERY DUTY PAID
Seller bears all risks and costs associated with delivery of the goods at the destination named place,
including the cost and the risk associated with the import clearing of the goods at destination, excluding
unloading from the final carrier.
* Buyer: unloading, (on carriage if any).
What does Incoterms mean?
International Commerical Terms
A set of uniform rules for the interpretation of terms defining
the cost, risk and obligations of buyers and sellers in
international transactions.
What 3 concepts does Incoterms focus on
Risk, Costs, Obligation
What year was the first edition of Incoterms introduced?
1936
