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INCOTERMS 2000

October 12th, 2009 | Tags: ,
Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Anyone engaged in foreign trade must be conversant with INCOTERMS 2000.  Devised and published by the International Chamber of Commerce, they are at the heart of world trade. These internationally accepted commercial terms define the roles of the buyer and seller and identify when transfer of ownership takes place. INCOTERMS should be an integral part of a purchase and sales agreement in global commerce.

All of this information is subject to change so consult competent legal counsel.   Buyers or sellers engaged in international trade should also know about the Convention for the International Sale of Goods (CISG).

EXW – Ex Works –Title and risk pass to buyer, including payment of all transportation and insurance cost, at the seller’s door. Used for any mode of transportation.

FCA – Free Carrier – Title and risk pass to buyer, including transportation and insurance cost, when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer’s vehicle; it is the Buyer’s obligation to receive the Seller’s arriving vehicle unloaded. 

barge image courtesy of McDonough Marine

barge image courtesy of McDonough Marine

FAS – Free Alongside (Ship, Barge, Watercraft) - Title and risk pass to buyer, including payment of all transportation and insurance costs, once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

FOB – Free On Board – Risk passes to buyer, including payment of all transportation and insurance cost, once delivered on board the ship by the seller. Used for sea or inland waterway transportation.

CFR – Cost and Freight – Title, risk and insurance cost pass to buyer when delivered on board the ship by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation.

CIF – Cost, Insurance and Freight – Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.

CPT – Carriage Paid To – Title, risk and insurance cost pass to buyer when delivered to carrier by seller who pays transportation cost to destination. Used for any mode of transportation.

CIP – Carriage and Insurance Paid To – Title and risk pass to buyer when delivered to carrier by seller who pays transportation and insurance cost to destination. Used for any mode of transportation.

DAF – Delivered at Frontier – Title, risk and responsibility for import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation.

DEQ – Delivered Ex Quay (Duty Paid) - Title and risk pass to buyer when delivered on board the ship at the destination point by the seller who delivers goods on dock at destination point cleared for import. Used for sea or inland waterway transportation.

DDU – Delivered Duty Unpaid – Title, risk and responsibility of import clearance pass to buyer when seller delivers goods to named destination point. Used for any mode of transportation. Buyer is obligated for import clearance.

DDU – Delivered Duty Unpaid – Seller fulfills his obligation when goods have been made available at the named place in the country of importation

DDP – Delivered Duty Paid – Title and risk pass to buyer when seller delivers goods to named destination point cleared for import. Used for any mode of transportation.

Note: EXW, CPT, CIP, DAF, DDU and DDP are commonly used for any mode of transportation. FAS, FOB, CFR, CIF, DES, and DEQ are used for sea and inland waterway

DES – Delivered Ex Ship – Title, risk, responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation.
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