INCOTERMS

Incoterm 2020, replaces the incoterm 2010. The revisions to the rules have been produced by the ICC Drafting Group, made up of eight members from Australia, China, EU member states, Turkey, and the USA.

There are 11 Inco-term rules in circulation as follows:

Rules for Any Mode of Transport

  • THE SELLER:
    -Transfers ownership of the Goods to the Buyer when they are ready to be picked up at the Seller’s storage location.

    THE BUYER:
    -Bears all Transportation and Insurance costs for moving the goods from the Seller’s storage location to the destination.

    EXW

    (EX WORKS)

  • THE SELLER:
    -Prepares commercial invoice;
    -Ensures proper packaging, labeling and good quality of the goods;
    -Loads goods to buyer’s carrier;
    -Pays export duty and taxes.

    THE BUYER:
    -Pays terminal handling charges both at the port of origin and destination;
    -Pays freight charges;
    -Bears the risk and cost of delivery up to his/her premises;
    -Pays import duties and taxes at the port of discharge.

    FCA

    (FREE CARRIER)

  • THE SELLER:
    - Prepares invoice;
    - Ensures proper packaging, labeling and good quality of the goods;
    - Performs loading and inland delivery of cargo;
    - Pays export duties and taxes and pays terminal handling charges at the port of origin;
    - Pays the freight charges.

    THE BUYER:
    - Pays terminal handling charges at the port of destination;
    - Bears the unloading cost at the destination;
    - Bears the cost and risk of delivery to final destination;
    - Pays the import duty and taxes.

    CPT

    (CARRIAGE PAID TO)

  • THE SELLER:
    - Bears the risk of insurance of the goods up to the named destination and the cost of carriage of the goods to the destination;
    - Prepares commercial invoice;
    - Ensures proper packaging, labeling and good quality of the goods;
    - Performs loading and inland delivery of cargo;
    - Pays export duties and taxes;
    - Pays freight charges.

    THE BUYER:
    Pays terminal handling charges at the port of destination
    - Bears the unloading cost at the destination
    - Bears the cost and risk of delivery to final destination
    - Pays the import duty and taxes

    CIP

    (CARRIAGE AND INSURANCE PAID TO)

  • Formerly known as Delivered at Terminal (DAT):
    THE SELLER:
    - The seller must do the export clearance formalities, pay for the transportation from his door to the named place including freight charges and enter into relevant contracts of carriage to the named place;
    -Take care of any and all export special documentation, related to the cargo;
    - All risk up to the agreed point of delivery;
    - Pays terminal handling charges at the port of destination and the charges at the point of destination;
    - Bears the cost of delivery up to agreed destination.

    THE BUYER:
    - Bears the import duty and taxes.

    DPU

    (DELIVERED AT PLACE UNLOADED)

  • THE SELLER:
    - Export clearance formalities;
    - Pay for the transportation from his door to the agreed destination;
    - Enter into relevant contracts of carriage;
    - Take care of any and all export special documentation;
    - All risk up to the agreed point of delivery;
    - Pays freight charges and terminal handling charges both at the port of loading and port of discharge.

    THE BUYER:
    - Pays import duty and taxes at the port of destination;
    - Bears the unloading charges at the port of destination.

    DAP

    (DELIVERED AT PLACE)

  • THE SELLER:
    - Do the export clearance formalities;
    - Pay for the transportation from his door to the agreed destination including freight charges and enter into relevant contracts of carriage;
    - Take care of any and all export special documentation;
    - Cover all risk up to the agreed point of delivery;
    - Take care of customs clearance formalities at the destination port(s), pay the duty , VAT and other local charges applicable.

    THE BUYER:
    To unload the goods the destination.

    DDP

    (DELIVERED DUTY PAID)

Rules for Sea and Inland Waterway Transport

  • THE SELLER:
    - Handle the export clearance formalities for shipment
    - Pay for the transportation from his door to the agreed terminal;
    - Enter into relevant contracts of carriage with the various carriers;
    - Take care of any and all export permits, special documentation of the cargo;
    - Pays the export duties.

    THE BUYER:
    - Organize suitable contract of carriage;
    - The loading of the goods on the ship and bears all cargo handling charges at port of origin and destination;
    - Pays the freight charges;
    - Bears the import duties and taxes at the port of destination;
    - Bears the cost and the risk of moving the goods up top destination
    - Bears the cost of unloading.

    FAS

    (FREE ALONGSIDE SHIP)

  • THE SELLER

    - Handle the export clearance formalities for shipment;
    - Pay for the transportation from his door till the goods are loaded on board a ship;
    - Enter into relevant contracts of carriage with the various carriers;
    - Take care of any and all export permits, quotas, special documentation, relating to the cargo;
    - Cover all risk up to the agreed point of delivery.

    THE BUYER:
    - Pays the freight charges;
    - Bears the import duties and taxes at the port of destination;
    - Bears the cost and the risk of moving the goods up to destination;
    - Bears the cost of unloading.

    FOB

    (FREE ON BOARD)

  • THE SELLER:
    - Pays export duties and taxes;
    - Pay for the transportation from his door to the agreed destination;
    - Take care of any and all export permits, quotas, special documentation, relating to the cargo;
    - Pay for the terminal handling charges at the port of origin;
    - Ensures loading and inland delivery of cargoes to the named destination.

    THE BUYER:
    - Pays terminal handling charges at the destination;
    - Bears the cost and risk of delivery to final destination;
    - Bears the unloading charges at the destination;
    - Pays the import duties and taxes.

    CFR

    (COST AND FREIGHT)

  • THE SELLER:
    - Bears the minimum insurance cover;
    - Pays export duties and taxes and for the transportation from his door to the named and agreed destination ;
    - Take care of any and all special documentation;
    - Pay for the terminal handling charges at the port of origin;

    THE BUYER:
    - Any transport movement past the agreed place of destination including on-carriage;
    - The risk passes from the time the seller delivers the cargo on board the ship;
    - Any and all import permits, quotas, special documentation;
    - Import customs clearance and all related formalities.

    CIF

    (COST, INSURANCE AND FREIGHT)