Incoterm

By the 1920s, commercial traders had developed a set of trade terms to describe their rights and liabilities with regards to the sale and transport of goods. These trade terms consisted of short abbreviations for lengthy contract provisions. Unfortunately, there was no uniform interpretation of them in all countries, and therefore misunderstandings often arose in cross-border transactions.

To improve this aspect of international trade, the International Chamber of Commerce (ICC) in Paris developed INCOTERMS or INternational COmmerce TERMS, a set of uniform rules for the interpretation of international commercial terms defining the costs, risks, and obligations of buyers and sellers in international transactions. First published in 1936, these rules have been periodically revised to account for changing models of transport and document delivery.

These rules reflect state of the art transportation practices and closely corresponds to the U.N. Convention on Contracts for the International Sale of Goods. The currenct version is Incoterms 2000.

Incoterms deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Incoterms are always used with a geographical location and do not deal with transfer of title.

They are devised and published by the International Chamber of Commerce (ICC). The English text is the original and official version of Incoterms 2000, which have been endorsed by the United Nations Commission on International Trade Law (UNCITRAL). Authorized translations into 31 languages are available from ICC national committees.

* Group E - Departure:

          o EXW. Ex Works (named place)

* Group F - Main Carriage Unpaid:

          o FCA. Free Carrier (named place)

          o FAS. Free Alongside Ship (named loading port)

          o FOB. Free On Board (named loading port)

* Group C - Main Carriage Paid:

          o CFR. Cost and Freight (named destination port)

          o CIF. Cost, Insurance and Freight (named destination port)

          o CPT. Carriage Paid To (named destination port)

          o CIP. Carriage and Insurance Paid to (named destination port)

* Group D - Arrival:

          o DAF. Delivered At Frontier (named place)

          o DES. Delivered Ex Ship (named port)

          o DEQ. Delivered Ex Quay (named port)

          o DDU. Delivered Duty Unpaid (named destination place)

          o DDP. Delivered Duty Paid (named destination place)