Incoterms provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to Incoterms is the eighth set of pre-defined international contract terms published by the International Chamber of Commerce, with the first set having.

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To be used when delivering to a land frontier. There is no obligation for the seller to make a contract of carriage, but there is also no obligation for the buyer to arrange one either – the buyer may sell the goods on to their own customer for collection from the original seller’s warehouse.

Incoterms® rules

This term can be used when the goods are transported by rail and road. FCA – Free Carrier and This term means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. Guide to international commerce law. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.

If delivery occurs at the seller’s premises, or at any other location that is under the seller’s control, the seller is responsible for loading the goods on to the buyer’s carrier. They are therefore not to be used for containerized freight, other combined transport methods, or for transport by road, air or rail. It should also be noted that the chosen place of delivery affects the obligations of loading and unloading the goods at that place. However, in common practice the buyer arranges the collection of the freight from the designated location, and is responsible for clearing the goods through Customs.

The seller pays for transportation to the named place of delivery at the frontier.

Incoterms and tradeterms EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP

Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. Incoterms also formally defined delivery.


This term should not be used if incotrm seller is unable to directly or indirectly to obtain the import license. The four rules defined by Incoterms for international trade where transportation is entirely conducted by water are as per the below.

Once goods are ready for shipment, the necessary packing is carried out by the seller at his own cost, so that the goods reach their final destination safely. These documentary requirements may result in two principal issues. EXW means that a buyer incurs the risks for bringing the goods to their final destination. Secondly, most jurisdictions require companies to provide proof of export for tax purposes.

ICC events 16 Jan All necessary legal formalities in the exporting country are completed by the jncoterm at his own cost and risk to clear the goods for export. The most important consideration for DDP terms is that the seller is responsible for ihcoterm the goods through customs in the buyer’s country, including both paying the duties and taxes, and obtaining the necessary authorizations and registrations from the authorities in that country.

Under DAP terms, the risk passes from seller to buyer from the point of destination mentioned in the contract of delivery. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover.

What are Incoterms Incoterms – a. The Incoterms rules were amended in210, andwith the eighth version— Incoterms [4] — having been published on January 1, The shipper is not responsible for delivery to the incoerm destination from the port generally the buyer’s facilitiesor for buying insurance. The Incoterms rules The Incoterms rules are standard sets of trading terms and conditions designed to assist traders when goods are sold and transported.

The buyer is also responsible incoferm completing all the export documentation, although the seller does have an obligation to obtain information and documents at the buyer’s request and cost. Views Read Edit View history.

Remember Me Sign in. Risk passes to buyer, including payment of all transportation incoherm insurance costs, once delivered on board the ship by the seller.


In a customs jurisdiction such as the European Union, this would leave the seller liable to a sales tax bill as if the goods were sold to a domestic customer.


The incoterms define the role between seller and buyer at an international transaction. Ask a question Free quote. At Mainfreight we support both the Incoterms as the newly introduced Incoterms Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer, but they do not themselves conclude a contract, determine the price payable, currency or credit terms, govern contract law or define where title to goods transfers.

The year — What lies behind us and ihcoterm is ahead? FCA – Free Carrier: This icf similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of discharge. Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on ijcoterm the vessel. DES – Delivered Ex Ship Seller delivers when goods are placed at the incotterm of the buyer on board the ship, not cleared for import at the named port of destination.

However, it does not constitute contract or govern law. They are intended to reduce or remove altogether uncertainties arising from differing interpretation of the rules in different countries. More realistic than EXW because it includes loading at pick-up, which is commonly expected, and sellers are more concerned about export violations.

In some common law countries such as the United States of AmericaFOB is not only connected with the carriage of goods by sea but also used for inland carriage aboard any “vessel, car or other vehicle. International Chamber of Commerce. EXW – ExWorks and This term represents the seller’s minimum obligation, since he only has to place the goods at the disposal of the buyer. This term should be used only for non-containerized seafreight and inland waterway transport.

Seller clears goods for export, not import. Risk passes to buyer when delivered on board the ship. This term represents maximum obligation to the seller.