Incoterms 2000

1. What are Incoterms?
2. Analysis Comparative Tables
3. Group E: EXW
4. Group F: FAS FCA FOB
5. Group C: CFR CIF CPT CIP
6. Group D: DES DEQ DDU DDP DAF
7. How are they used?

Objectives

The objectives of this Learning Unit are to understand:

• The responsibilities of the Exporter and Importer under Incoterms 2000.
• How Incoterms are used in International Trade transactions.

Learning Unit Summary

Incoterms are a set of international rules for the interpretation of 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 contract of carriage or delivery.

In international trade transactions one of the aspects to be defined is the place of delivery of goods. This place, previously agreed between the importer and the exporter, must be stated in the international sales contract. INCOTERMS 2000 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 goods 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 2000, the parties define the point to which the exporter is responsible for the goods 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 goods, clearly defining in the international contract of sale the respective obligations of the exporter and the importer in each case.

INCOTERMS 2000
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)

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