Learning unit: Incoterms 2010. DAT DAP FOB CIF EXW FCA CIP... Syllabus:
Objectives of the learning unit - Incoterms:
Sample of the learning unit - Incoterms 2010:
Learning unit summary (Incoterms 2010):
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 important obligations.
Incoterms also establish a body of international rules for the interpretation of the most commonly used International trade terms.
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.
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) 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.
Web site: International Chamber of Commerce
INCOTERMS 2000 (Not in force)
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