Objectives. To understand:
- The responsibilities of the exporter and Importer under Incoterms 2010.
- How Incoterms are used in International trade transactions.
Incoterms are a set of international rules for the interpretation of International trade terms
set forth by the International Chamber of Commerce. The word Incoterm is an
abbreviation of international commercial terms and the chosen Incoterm is a term
of the contract of sale. Incoterms are not terms of the contracts of carriage or delivery.
In International trade transactions one of the aspects to be defined is the place of delivery of products. This place, previously agreed between the importer
and the exporter, must be stated in the
international sales contract. INCOTERMS
2010 facilitates this by clearly defining the place of delivery, who is
responsible for the transport to the place of delivery, who assumes the risks
and the point at which risk passes from the exporter to the importer, who
customs clears the products for import/export and many more
Incoterms also establish a body of international rules for the interpretation
of the most commonly used International trade terms.
Example of the learning unit Incoterms 2010:
Defining the Obligations. Incoterms enable the contracting parties to set out
clearly and concisely the extent of their respective obligations, and above all, the moment when costs and risks are transferred from the exporter to the importer. In Incoterms, the parties define the point to which the exporter
is responsible for the products and what are the expenses relating to his
obligations which will therefore have to be included in the price offered by the exporter. Incoterms cover the various modes of transport of the
products, clearly defining in the International contract of sale the respective obligations of the exporter and the importer in each case.
Incoterms 2010. The number of Incoterms rules has been reduced from 13
to 11. New Incoterms: DAT and DAP. Replaced Incoterms: DAF, DES, DEQ and DDU.
a) Incoterms for sea and inland waterway transport:
FAS - FOB - CFR - CIF
b) Incoterms for any mode of transport (multimodal / unimodal)
EXW - FCA - CPT - CIP - DAT - DAP - DDP
Incoterms Delivered at Origin: EXW, FCA, FAS, FOB, CPT, CFR, CIP, CIF
Incoterms Delivered at Destination: DAT, DAP, DDP
DAP- DELIVERED AT PLACE (Entregado en lugar)
DAP (DELIVERED AT PLACE) may be used for all transport modes. Exporter
delivers when the products, once unloaded from the arriving means of transport, are
placed at the disposal of the importer at a named terminal at the named port or
place of destination. "Terminal" includes quays, warehouses, container
yard or road, rail or air terminal. Both parties should agree the terminal and
if possible a point within the terminal at which point the risks will transfer
from the exporter to the buyer of the products. If it is intended that the exporter is
to bear all the costs and responsibilities from the terminal to another point
DAP or DDP may apply.
DAT- DELIVERED AT TERMINAL (Entregado en la Terminal)
DAT (DELIVERED AT TERMINAL) may be used for all transport modes. The exporter delivers the
products when they are placed at the disposal of the importer on
the arriving means of transport ready for unloading at the named place of destination. Parties are advised to specify as clearly as possible the point
within the agreed place of destination, because risks transfer at this point
from exporter to importer. If the exporter is responsible for clearing the products,
paying duties etc consideration should be given to using the DDP term.
INCOTERMS 2000 (Not in force)
- EXW EX WORKS (... named place)
- FCA FREE CARRIER (... named place)
- FAS FREE ALONGSIDE SHIP (... named port of shipment)
- FOB FREE ON BOARD (... named port of shipment)
- CFR COST and FREIGHT (... named port of destination)
- CIF COST, INSURANCE and FREIGHT (... named port of destination)
- CPT CARRIAGE PAID TO (... named place of destination)
- CIP CARRIAGE and INSURANCE PAID TO (... named place of destination)
- DAF DELIVERED AT FRONTIER (... named place)
- DES DELIVERED EX SHIP (... named port of destination)
- DEQ DELIVERED EX QUAY (... named port of destination)
- DDU DELIVERED DUTY UNPAID (... named place of destination)
- DDP DELIVERED DUTY PAID (... named place of destination)
Web site: International Chamber of Commerce: http://www.iccwbo.org/