INCOTERMS



According to the responsibility of the seller, the INCOTERMS can be divided into four categories:

Under Group E the seller has the minimum responsibility. He is responsible for making the good available to the buyer in an indicated place. Group E includes:

EXW (Ex Works)
The seller fulfils his obligation to deliver when he has made the goods available to the buyer at his premises or at another place agreed (i. e. works, factory, warehouse, etc). He is not responsible for the loading of the goods or for clearing the goods for export. The buyer bears all costs and risks involved in taking the goods from the seller´s premises to the desired destination.

Group F requires that the seller hands over the cargo for its transportation according to indications received by the buyer.

FCA (Free Carrier)
The seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the change of the carrier named by the buyer at the named place or point.
If the hand over occurs at the seller’s premises, he is responsible for the loading of the cargo but if the hand over occurs at another place, the seller is not responsible for the unloading of the goods.

FAS (Free Alongside Ship)
The seller fulfils his obligation to deliver when the goods have been placed alongside the vessel at the named port of shipment. The buyer has to bear all the costs and risks of the goods from that moment. The term FAS requires the seller to arrange export customs clearing.

FOB (Free on Board)
The seller fulfils his obligation to deliver when the goods, cleared for export, have passed over the ship’s rail at the named port of shipment. The buyer has to bear all the risks and costs of the goods from that point.

Group C requires that the seller contracts and pays for the main carriage. The buyer is responsible for the risks of loss or damage to the goods and for any additional costs occurred after handover.

CFR (Cost and Freight)
The seller fulfils his obligation to deliver when the goods pass the ship’s rail in the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination. The insurance is paid by the buyer.
The term CFR requires the seller to arrange export customs clearing.

CIF (Cost Insurance and Freight)
The seller has the same obligations as under CFR but with the addition that he has to procure insurance for the cargo and pay for the corresponding insurance premium.
The term CFR requires that the seller arranges for exports customs clearing.

CPT (Carriage paid to)
Under CPT the seller delivers the goods to a carrier selected by him and pays the freight for the carriage to the named destination. Al the risks of loss of or damage to the goods are transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier.
CPT requires that the seller arranges for exports customs clearing.

CIP (Carriage and Insurance paid to)
The seller has the same obligations as under CPT but with the addition that the seller has to procure insurance for the cargo during the carriage and pay for the corresponding insurance premium.

Under group D the seller assumes all the risks and costs until the goods are delivered at an agreed place or destination point in the frontier or within the country

DAF (Delivered at Frontier)
The seller’s responsibility for the delivery of the goods finishes when he places the cargo, already cleared though customs on the export side, at an agreed point and place of the frontier. The buyer must clear the goods through customs on the import side. The seller is responsible for risks of damage and loss of the goods until the moment of delivery.

DES (Delivered Ex Ship)
The seller fulfils his obligation to deliver when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination. The seller must bear all the costs and risks involved in bringing the goods to the named port of destination. The buyer is in charge of the unloading costs.

DEQ (Delivered Ex Quay)
The seller fulfils his obligation to deliver the goods when he has made them available to the buyer on the quay (wharf) at the named port of destination, uncleared for import. The seller has to bear all the risks and costs until the handover of the goods, including unloading.
The term DEQ requires that the buyer clears the goods for import and that he pays for all the duties, taxes and other import charges.
The parties can agree to include among the obligations of the seller all or part of the payable import costs of the goods.

DDU (Delivered Duty Unpaid)
The seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation, uncleared for importation. The seller has to bear all the risks and costs involved in bringing the goods thereto.

DDP (Delivered Duty Paid)
The seller has the same obligations as in the term CPT, including clearance of the goods for import. The seller has to bear all the risks and costs involved until the moment of delivery.