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International Commercial Terms
INCOTERMS provide a set of rules for the interpretation of the most common trade terms used in international trade in order to deal with the differing interpretations and understandings that exist in various countries and trades. When a seller and buyer wish to cite Incoterms as applying to the contract of sale, it is important to cite the term used, title, anddate applicable as there have been numerous amendments, eg: FOB Incoterms 2000. Regardless of the Incoterms in use, the seller must supply the goods as agreed in the contract of sale, together with evidence of conformity as may be required by the contract. The buyer must take receipt and pay for the goods delivered, as provided in the contract.

MAIN GROUPS
Incoterms are presented in four maingroups. A last group is added in which trading terms and variations are shown: Departure – The seller makes the goods available to the buyer at the seller’s own premises 1. EXW – EX Works

Main Carriage Unpaid – The seller delivers the goods to a carrier appointed by the buyer 1. 2. 3. FCA – Free Carrier FAS – Free Alongside FOB – Free Onboard Ship

Main Carriage Paid – The seller has to contractfor carriage but without assuming the risk of loss or damage to the goods or traditional costs due to events occurring after shipment and dispatch 1. 2. 3. 4. CFR – Cost and Freight CIF – Cost, Insurance, and Freight CPT – Carriage Paid To CIP – Carriage and Insurance Paid To

Arrival – The seller has to bear all costs and risks to bring the goods to the country of destination 1. 2. 3. 4. 5.DAF – Deliver At Frontier DES – Delivered Ex Ship DEQ – Delivered Ex Quay DDU – Delivered Duty Unpaid DDP – Delivered Duty Paid

Other Trading Terms and Variations 1. 2. 3. 4. 5.
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EXF – Ex Factory PAF – Packed At Factory FOB – Free on Board FOT – Free on Truck FOR – Free on Rail

6. 7. 8. 9.

C&F – Cost and Freight DIS – Delivered Into Shore FIS – Free Into Store Door to Door10. Free Domicile

DEFINITIONS
Departure 1. EXW (EX Works) – Title and risk pass to buyer including payment of all transportation and insurance from the seller’s door. The seller is not responsible for loading the goods in the vehicle provided by the buyer, unless otherwise agreed. Used for any mode of transportation.

Main Carriage Unpaid 2. FCA (Free Carrier) – Title and risk pass to buyerincluding 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 collecting vehicle; it is the Buyer’s obligation to receive the Seller’s arriving vehicle unloaded. FAS (Free Alongside Ship) – Title and risk pass to buyer including payment of all transportation and insurance cost once deliveredalongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller. FOB (Free Onboard) – Title and risk pass to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. The point of transfer of the title and risk is determined when the goods pass the ship’s rail during loading. Usedfor sea or inland waterway transportation.

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Main Carriage Paid 1. CFR (Cost and Freight) – Title, risk, and insurance cost pass to buyer when delivered on board the ship by the seller who pays the transportation cost to the destination port. The point of transfer of the title, risk, and insurance cost is determined when the goods pass the ship’s rail during loading. Used for sea orinland 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. The point of transfer of the title, risk, and insurance cost is determined when the goods pass the ship’s rail during loading. Similar to CFR but the seller has to procure marine insurance against...