INternational

COmmerce
Terms

Presented By:-
Gaurav Jain
P61035
Introduction:
• Incoterms or international commerce terms are a series
of international sales terms, published by International
Chamber of Commerce (ICC) and widely used in
international commercial transactions

Accepted By:-
• Governments.
• legal authorities.
• Practitioners
Objective:-
• To remove the uncertainties arising from
different interpretation of trade terms in
different countries. They are used to divide
transaction costs and responsibilities between
buyer and seller and reflect state-of-the-art
transportation practices
History:-
• 1919 - The ICC was founded in 1919. Its activities are global, with thousands
of member companies and associations from over 130 countries. From this
organization there has emanated the well-known The
ICC Incoterms define the responsibilities of the customers and the
suppliers. In this way, a substantial amount of dispute is avoided through a
clear definition and allocation of risk

• 1936 - The first Incoterms rules, released in1936, were the first real

attempt to bring coherence to a commercial and judicial system that at the
time diverged widely from one country to another . The day-to-day use
of Incoterms in international sales contracts brings legal certainty to
business transactions while simplifying the drafting of international
contracts

• Sep 2010 - After receiving a large number of comments from the ICC
National Committees, the Incoterms Drafting Group completed a version
of Incoterms. After comments on the draft and revisions Eight Edition of
Inco Terms out and will be effective from 1st Jan 2011.
Inco Terms 2010(Eight Edition)
RULES FOR ANY MODE OR MODES OF TRANSPORT
• EXW        Ex Works (Named Place)
• FCA         Free Carrier (Named Place)
• CPT         Carriage Paid To (Named Place)
• CIP          Carriage And Insurance Paid To (Named Place)
• DAT         Delivered At Terminal (Named Place)
• DAP        Delivered At Place (Named Place)
• DDP        Delivered Duty Paid (Named Place)
 
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
• FAS          Free Alongside Ship (Named Loading Port)
• FOB         Free On Board (Named Loading Port)
• CFR         Cost And Freight (Named Destination port)
• CIF           Cost, Insurance and Freight (Named Destination port)
1. EXW – Ex Works (named place)
The seller makes the goods available at his premises. The buyer is
responsible for all charges.
This trade term places the greatest responsibility on the buyer and
minimum obligations on the seller. The Ex Works term is often used
when making an initial quotation for the sale of goods without any
costs included.

2. FCA – Free Carrier (named places)

The seller hands over the goods, cleared for export, into the custody of
the first carrier (named by the buyer) at the named place. This term
is suitable for all modes of transport, including carriage by air, rail,
road, and containerized / multi-modal sea transport.
3. CPT – Carriage Paid To (named place of
destination)
The seller pays for carriage to the named point of
destination, but risk passes when the goods are handed
over to the first carrier.

4. CIP – Carriage and Insurance Paid (To) (named

place of destination)
Seller pays for carriage and insurance to the named
destination point, but risk passes when the goods are
handed over to the first carrier.
5. DAT-Delivered at Terminal(named destination
terminal) replaces DEQ. DAT May be used irrespective of the
mode of transport selected and may also be used more than one
mode of transport is employed. DAT Means seller delivers when the
goods, having been unloaded from the arriving means of transport,
are placed at buyer’s disposal at a named terminal.
6. DAP-Delivered at Place(Named Place
Destination) replaces DES & DAF,DDU. The arriving
vehicle under DAP could be a ship and a named place
destination could be a port
7. DDP-Delivered Duty Paid (named destination
place)
This term means that the seller pays for all transportation costs and
bears all risk until the goods have been delivered and pays the duty.
8. FAS – Free Alongside Ship (named
loading port)
The seller must place the goods alongside the ship at the named port.
The seller must clear the goods for export. Suitable only for
maritime transport. This term is typically used for heavy-lift or bulk
cargo.
9. FOB – Free on Board(named loading
port)
The seller must them self load the goods on board the ship
nominated by the buyer. The seller must clear the goods for export.
Maritime transport. The buyer must instruct the seller the details of
the vessel and port where the goods are to be loaded, and there is no
reference to, or provision for, the use of a carrier or forwarder. It
DOES NOT include Air transport.
10.CFR or CNF – Cost and Freight (named
destination port)
Seller must pay the costs and freight to bring the goods to the port of
destination. However, risk is transferred to the buyer once the goods
are delivered when they are “on Board” of vessel Maritime transport
only and Insurance for the goods is NOT included.

11.CIF – Cost, Insurance and Freight (named

destination port)
Exactly the same as CFR except that the seller must in addition
procure and pay for insurance for the buyer. Maritime transport
only.
 Unload Unload
Transport Landing Transport Landing
Export- from truck onto trucks Transport Entry - Entry -
Incote Load to to charges at to charges at
duty at the from the to Insurance Customs Duties and
rms truck exporter's origin's importer's importer's
payment origin's importers' destination clearance Taxes
port port port port
port port

EXW No No No No No No No No No No No No

FCA Yes Yes Yes No No No No No No No No No

FAS Yes Yes Yes Yes No No No No No No No No

FOB Yes Yes Yes Yes Yes No No No No No No No

CFR Yes Yes Yes Yes Yes Yes Yes No No No No No

CIF Yes Yes Yes Yes Yes Yes No No No Yes No No

CPT Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No

CIP Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No

DAP Yes Yes Yes Yes Yes Yes No No No No No No

DAT Yes Yes Yes Yes Yes Yes Yes No No No No No

DDP Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes
Questions???
Thank you ()