IMPORT EXPORT INCOTERMS 2000

OBJECTIVES OF INCOTERMS
Incoterms (International Commercial Terms) are commercial terms, created in 1936 by the International
Chamber of Commerce in Paris.

These terms define the responsibilities and the obligations of a seller and a buyer within the framework of
international contracts of trade concerning loading, transport, type of transport, insurances and delivery. It
is thus here about a distribution of transport charges, first function of the incoterms. The second role of
the incoterms is to define the place of transfer of the risks , that is to say who is going to support the
damage (the seller or the buyer) in the event of bad execution of transport.

It is a standard regularly updated and which allows the buyer and the seller to agree quickly and without
any ambiguity about their methods of the transaction .
Thus, in an international sale contract, the incoterms will allow to clear up some issues:

a) To determine the critical point of the transfer of the risks of the seller to the buyer in the process
forwarding of the goods (risks of loss, deterioration,robbery of the goods) allow the person who supports
these risks to make arrangements in particular in term of insurance

b) To specify is going to subscribe the contract of carriage that is to say the seller or the buyer.

c) To distribute between the seller and the buyer the logistic and administrative expenses at the various
stages of the process.

d) To define who is responsible for packaging, marking, operations of handling, loading and unloading of
the goods or the potting and the discharge of the containers as well as the operations of inspection.

e) To fix respective obligations for the achievement of the formalities of exportation and /or importation,
the payment of the rights and taxes of importation as well as the supply of the documents. There are 13
incoterms adopted by the International Chamber of Commerce

THE 13 INCOTERMS
DEPARTURE SALES (The goods travel, on international transport, with the risks and dangers of the
buyer)
1) incoterm " EXW " (agreed place)
- Seller: the only responsibility for the seller is to put the goods, in a package adapted to the transport, at
the disposal of the buyer in his buildings.

- Buyer: the buyer supports all the expenses and risks related to transport, from the departure of the
factory to destination.

The group of the incoterms " F " = FREE

2) FCA= FREE CARRIER (agreed place)
- Seller: if the delivery is made in the buildings of the seller, this is the seller who loads the goods suitably
packaged on the vehicle provided by the buyer.The seller takes charge of customs clearance.
- Buyer: the buyer chooses the mean of transport and the carrier with whom he concludes the contract of
carriage and pays principal transport .The transfer of the expenses and the risks is done when the carrier
take charge of the goods. The seller and the buyer agree upon the place for goods delivery.
3) FAS = FREE ALONG SIDE SHIP (agreed port of loading)
- Seller: the obligations of the seller are fulfilled when the goods are placed cleared along the ship on the
quay or in the barges at an agreed port of loading.

- Buyer: from this moment, the buyer bear all the expenses and risks of loss or damage as soon as the
goods are delivered along the ship, in particular in the case of delay of the ship or cancellation of the
stopover . The buyer chooses the carrier, concludes the contract of carriage and pays freight.
4) FOB = FREE ON BOARD (agreed port of loading)
- Seller: the goods are put aboard the ship by the seller. The exportation formalities fall on the seller.

- Buyer: the buyer indicates the ship and pays freight. The transfer of the expenses and risks is done
when the goods pass the rail of the ship.

The group of the incoterms " C " = COST AND CARRIAGE ou COUT
5) CFR = COST AND FREIGHT (agreed port of destination)
- Seller: he chooses the carrier, concludes and bears the expenses by paying freight to the agreed port of
destination, unloading not included. The loading of the duty-paid goods on the ship falls on him as well as
the formalities of forwarding. On the other hand, the transfer of risks is the same one as in FOB.

- Buyer: he supports the risk of transport, when the goods are delivered aboard ship at the loading port,
he receives it from the carrier and takes delivery of the goods at the agreed port of destination.
6) CIF = COST, INSURANCE AND FREIGHT (agreed port of destination)
- Seller: identical terms to the CFR with the additional obligation for the seller to provide a maritime
insurance against the risk of loss or damage to the goods. The seller pays the insurance premium.

- Buyer: he supports the risk of transport, when the goods have been delivered aboard ship at the loading
port. He takes delivery of the goods from the carrier to the appointed port of destination.
7) CPT = CARRIAGE PAID TO (agreed place of destination)
- Seller: the seller controls the logistic chain. After paying customs clearance for exportation, He chooses
the carrier and pays the expenses until the agreed place.

- Buyer: the risks of damages or loss, are supported by the buyer as soon as the goods are given to the
first carrier. Then, the buyer has to pay importation customs clearance and the unloading costs.
8) CIP = CARRIAGE AND INSURANCE PAID TO (agreed place of destination)
- Seller: CIP is identical to the CPT, but the seller has to provide in addition an insurance transport. The
seller concludes the contract of carriage, pays the freight and the insurance premium.

- Buyer: the risks of damages or loss, are supported by the buyer as soon as the goods are given to the
first carrier. Then, the buyer has to pay importation customs clearance and the unloading costs.

ARRIVING SALES (The goods travel, on international transport, with the risks and dangers of the seller)

The group of the incoterms " D " = DELIVERED

9) DAF = DELIVERED At FRONTIER (agreed place )
- Seller: the seller pays the expenses and bears the risks to the border which must be specified. He bears
the customs formalities for exportation.

- Buyer: he takes delivery of the goods at the agreed point border. He bears customs formalities for the
importation. .
10) DES = DELIVERED EX SHIP (agreed port of destination)
- Seller: the seller chooses the maritime carrier, concludes, pays the freight. He bears expenses and risks
of transport. The transfer of the expenses and risks is done aboard ship at the point of unloading at the
arrival port before unloading.

- Buyer: he takes delivery of the goods aboard ship to the port of destination and pays the expenses of
unloading.
11) DEQ = DELIVERED EX QUAY (agreed port of destination)
- Seller: the seller puts the goods at the disposal of the buyer, cleared trough exportation customs on the
quay at the agreed port .

- Buyer: importation customs clearance is from now on the responsibility of the buyer.
12) DDU = DELIVERED DUTY UNPAID (agreed place of destination)
- Seller: the seller put the goods at the disposal of the buyer, with the place agreed in the country of
importation.

- Buyer: the buyer is responsible of the importation customs formalities, as well as the rights and taxes.
The innovation 2000 consists in a precision concerning the unloading of the freight vehicle at destination
which is from now on the responsibility of the buyer.
13) DDP = DELIVERED DUTY PAID (agreed place of destination)
- Seller: in this case the seller, has the maximum obligation, the transfer of expenses and risks is done
when the buyer receives the goods. Customs clearance on importation falls on him too.

- Buyer: he takes delivery at an appointed place and pays the expenses of unloading.