Incoterms 2020 is the ninth set of international contract terms published by the international chamber of commerce, with the first set having been published in 1936. Incoterms or the international trade rules is a set of rules that define the terms of sale in the turnover of material goods. This guide is designed to give you a quick overview of the incoterms rules frequently used worldwide in international and domestic contracts, illustrating responsibilities between buyer and seller for costs and risk, as well as cargo insurance. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade. Incoterms 2010 exw ex works named place of delivery seller delivers when they place the goods at the disposal of the buyer at the sellers premises or another named place i. Exw, fca, cpt, cip, dat, dap and ddp belong to this class.
Fob incoterms 2010 namibia university of science and. Cpt means that the seller must pay the freight for the carriage of the goods to the named destination. With fob the goods are placed on board the ship by the seller at a port of shipment named in the sales agreement. Fob is only used in noncontainerized sea freight or inland waterway transport. The incoterms or international commercial terms are a series of predefined commercial terms. Under exw terms, the exporter outsources all of the shipping, compliance and. Fob seller seller seller seller seller buyer buyer buyer buyer buyer buyer buyer. Contact your national committee to get the rules in your language. Because the implications and interpretations differ between publications, the year of the revised publication should also be stated. By using fob the seller must clear the goods for export and delivers when the goods pass the ships rail at the agreed port. The risk of loss or damage to the goods and any cost.
In practice it should be used for situations where the seller has direct access to the vessel for loading, e. The 11 clauses in international trade are a guide and define the main responsibilities of buyers and sellers in international sales contracts. Download fob incoterms 2010 namibia university of science and. In addition to the sales contract, appropriate incoterms 2010 and subsequent revisions shall apply as supplementary term. The incoterms 2010 introduced two new terms dat and dap. They also explain the division of costs and risks between the parties. Cci incoterms 2010 pdf the incoterms or international commercial terms are a series of predefined commercial terms published by the international chamber of commerce icc. By referring to incoterms 2010, the obligations of the seller and buyer will be clearly defined so the risk of legal. Under fob incoterms, the seller clears goods for export and ensures delivery onto the vessel for transport at the named port of departure.
Arranging transportation of goods to a vessel named by the buyer at a named port. The insurance to be provided under terms cif and cip has also changed, increasing. Fob is often negotiated into international contracts and sales agreements. The risk of loss or damage to the goods is transferred to the buyer when the goods pass the ships rail, i. Incoterms do not cover ownership or the transfer of title of goods. Dat delivered at terminal dap delivered at place 15 exw fca cpt cip dat dap ddp fas fob cfr cif. This prevents problems with interpretation which may arise in countries having their own definitions of delivery terms. All others are omnimodal there is no such thing as fo fa tory incoterms 2010 reference chart. The international chamber of commerce icc has been helping. In terms of world transport, sea freight is estimated to account.
Incoterms only relate to trade terms in the contract of sale between the buyer and seller and do not deal with the contract for carriage, or convey title. The trade terms describe the buyers and sellers risks, liabilities and obligations in international trade. The sales contract for every export transaction contains a three letter acronym, most commonly fob, cfr or cif. The probably most common incoterms are exw ex works named place, fob free on board named port of shipment, cif cost, insurance, freight named port of destination and cpt carriage paid to named place of destination.
The roles and responsibilities listed on the front of this document can be altered changed as long as there is an agreement. Daf delivered at frontier des delivered exship deq delivered exquay ddu delivered duty unpaid addition of two new terms. Fob, free on board, is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the incoterms standard published by the international chamber of commerce. By defining whos responsible for shipping, insurance and tariffs, the incoterms rules ultimately determine your final costs as either a buyer or a seller. Icc official rules for the interpretation of trade terms fob free on board named port of loading under fob terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel. Under fob terms, prior to incoterms 2010, the seller had the obligation to have the. Download our incoterms 2010 rules brochure pdf dhl. Incoterms 2020 defines 11 rules, the same number as defined by incoterms 2010. One rule of the 2010 version delivered at terminal.
When you decided to import goods from china, we recommend you read more about the incoterms 2010. International commercial terms, known as incoterms, are internationally accepted terms defining the responsibilities of exporters and importers in the arrangement of shipments and the transfer of liability involved at various stages of the transaction. The incoterms 2010 trade terms are used in international trade, and are a series of recognised standard definitions drawn up by the international chamber of commerce icc. Incoterms 2010 rules and definition globalnegotiator. Icc introduction to the incoterms 2010 icc knowledge 2. Incoterms 2010 rules and definition the incoterms 2010 rules have made some significant changes that will be in force, at least, till 2020. Your swiss insurer is a reliable partner on whom you can count in any case. If the trade term reads dap terminal the seller has to pay the cost to. You define the adequate insurance coverage for your goods.
To help you understand the intricacies of these terms and what they mean for youwell walk you through all eleven of the 2010 incoterms rules. This appears to suggest that, in recent times, the incoterms rules have been revised at 10year intervals. Read online fob incoterms 2010 namibia university of science and. However, most exporters and their overseas customers dont know exactly what they stand for or exactly what they mean, just that theyve been using them for years. Other primary notes of incoterms 2010 instead of terms they are now referred. If recommends the use of incoterms 2010 for international shipments and strongly advises against forming own delivery terms. Incoterms 2010 icc international chamber of commerce. This term is only used for water transportation either sea or inland water. Incoterms include issues related to the transport of products from the seller to the buyer.
These four terms were combined into dat and dap in incoterms 2010, but remain in use by incoterms 2000 traders. Archived from the original pdf on 20 december 2016. Please refer to the official text of the international chamber of commerce for a full and detailed description of all rights an d liabilities arising from the use of the aforementioned incoterms. International commercial terms incoterms the incoterms international commercial terms is a universally recognized set of definitions of international trade terms, such as fob, cfr and cif, developed by the international chamber of commerce icc in paris, france. Incoterms 2010 defines dap as delivered at place the seller delivers when. All books are in clear copy here, and all files are secure so dont worry about it. Incoterms citt webinar series incoterms 2010 multimodal terms exw fca cip cpt dap dat ddp ocean terms fas fob cfr cif ucc fob terms fob origin freight prepaid fob origin freight collect fob origin freight prepaid and charged back fob destination freight prepaid. Free on board fob use of this rule is restricted to goods transported by sea or inland waterway.
Dat was removed, and is replaced by a new rule delivered at place unloaded. Incoterms 2010 international commercial terms contract of sale incoterms key elements of international contracts of sale. Trade terms are key elements of international contracts of sale. The sellers responsibility does not end at that point unless the goods are appropriated to the contract that is. Fob free on board port of shipment incoterms 2020 explained.