International Business Law

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International Business Law

• International Commercial Terms
• INCOTERMS

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Plan

• I. Introduction
• A. Definition and Role
• B. 4 groups of INCOTERMS
• II. Description of the INCOTERMS
• A. Group E
• B. Group F
• C. Group C
• D. Group D
• III. Conclusion

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I. Introduction

• Definition and role
• The term INCOTERM is an abbreviation of
  International Commercial Terms and it is a term
  of contract of sales.
• There are 2 goals for the INCOTERMS
• Carriage of the goods
• Export and import clearance

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I. Introduction

• 4 groups of INCOTERMS
• Group E the first group has only one trade term
  and placing the goods at the disposal of the
  buyer
• Group F the seller must hand over the goods to a
  nominated carrier free or risk and expense to the
  buyer
• Group C the seller must bear certain costs even
  after the critical point for the division of the
  risks of or damage to the goods has been reached
• Group D the goods must arrive at a stated
  destination

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I. Introduction

• Group E Departure
• EXW Ex Works (named place)
• Group F Main Carriage Unpaid
• FCA Free Carrier
• FAS Free Alongside Ship (named loading port)
• FOB Free On Board

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I. Introduction

• Group C Main Carriage Paid
• CFR Cost and Freight (named destination port)
• CIF Cost, Insurance and Freight
• CPT Carriage paid To
• CIP Carriage and Insurance paid to
• Group D Arrival
• DAF Delivered At Frontier (named place)
• DES Delivered Ex Ship (named port)
• DEQ Delivered Ex Quay
• DDU Delivered Duty Unpaid (named destination
  place)
• DDP Delivered Duty Paid

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II. Description of the INCOTERMS

• EXW Ex Works
• The seller makes the goods available at his
  premises

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II. Description of the INCOTERMS

• FCA Free Carrier
• The seller hands over the goods, cleared for
  export, into the custody of the first carrier at
  the named place

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II. Description of the INCOTERMS

• FAS Free Alongside Ship
• Free alongside shhip the seller must place the
  goods alongside the ship at the named port

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II. Description of the INCOTERMS

• FOB Free On Board
• The classic maritime trade term, Free on Board
  seller must load the goods on board the ship
  nominated by the buyer, cost and risk being
  divided at ships rail

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II. Description of the INCOTERMS

• CFR Cost and Freight
• The seller must pay the costs and freight to
  bring the goods to the port of destination.

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II. Description of the INCOTERMS

• CIF Cost, Insurance and Freight
• The same as CFR excepted that the seller must in
  addition procure and pay for insurance for the
  buyer.

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II. Description of the INCOTERMS

• CPT Carriage paid To
• The general/ containerised/ multimodal
  equivalent of CIF. Seller pays for carriage and
  insurance to the named destination point, but
  risk passes when the goods are handed over the
  first carrier

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II. Description of the INCOTERMS

• CIP Carriage and Insurance paid to
• The containerised/ transport/ multimodal
  equivalent of CIF. The seller pays for carriage
  and insurance to the named destination point, but
  risk passes when the goods are handed over to the
  first carrier

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II. Description of the INCOTERMS

• DAF Delivered At Frontier
• The seller pays for transportation to the named
  place of delivery at the frontier.
• The buyer arranges for customs clearance and pays
  for transportation from the frontier to his
  factory. The passing of risk occurs at the
  frontier.

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II. Description of the INCOTERMS

• DES Delivered Ex Ship
• Where goods are delivered ex ship, the passing of
  risk does not occur until the ship has arrived at
  the named port of destination and the goods made
  available for unloading to the buyer.
• The seller pays the same freight and insurance
  costs as he would under a CIF arrangement

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II. Description of the INCOTERMS

• DEQ Delivered Ex Quay
• It means the same as DES, but the passing of
  risk does not occur until the goods have been
  unloaded at the port of destination.

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II. Description of the INCOTERMS

• DDU Delivered Duty Unpaid
• It means that the seller pays for all
  transportation costs and bears all risk until the
  goods have been delivered, but does not pay for
  the duty.

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II. Description of the INCOTERMS

• DDP Delivered Duty Paid
• It means that the seller pays for all
  transportation costs and bears all risk until the
  goods have been delivered and pays the duty.

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III. Conclusion

• INCOTERMS are very useful to regulate and to put
  some law on the international trade
• Do not confuse with the American INCOTERMS, very
  different (FOB).
• Still some problems in spite of the new version
  in 2000