INCOTERMS Ppt by Swapnil Jain 30th Nov.ready to Give 1

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IBMR

INCOTERMSPRESENTED BY

Mr. Swapnil JainIn the enlightening guidance of

Mrs. Megha

Jain


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Rules at the core of world trade

IN-CO-TERMSInternational commercial terms


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WHAT ARE INCOTERMS ?

1. ICC (International Chamber of Commerce) Official Rules for the

Interpretation of Trade terms.

2. First published by the ICC in 1936 Since then, ICC expert

lawyers and trade practitioners have updated them six times to

keep pace with the development of international trade.

3. ICC is currently revising Incoterms 2000. The newedition, Incoterms 2011, is expected to enter into force

on 1 January 2011.


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WHAT ARE INCOTERMS ?

4. Incoterms are available from ICC Publishing and

ICC national committees throughout the world.

5. Incoterms are developed, maintained and

promoted by the ICC Commission on

Commercial Law and Practice (CLP).

6. The English text is the original and official

version of Incoterms 2000, authorizedtranslations into 31 languages are available from

ICC national committees.


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Why Incoterms?

Incoterms are international rules that are accepted bygovernments, legal authorities and practitioners

worldwide for the interpretation of the most commonly

used terms in international trade.

They either reduce or remove altogether uncertaintiesarising from differing interpretations of such terms in

different countries.

Incoterms make international trade easier and help

traders in different countries to understand oneanother. These standard trade definitions that are

most commonly used in international contracts are

protected by ICC copyright.


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What do they cover?

The scope of Incoterms islimited to matters relating to

the rights and obligations ofthe parties to the contract of

sale with respect to the

delivery of goods sold, butexcluding "intangibles" like

computer software.


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INCOTERMS 2000


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Four Groups of Incoterms

LessControl

MoreControl1) E group

2) F group

3) C group

4) D group

Seller Buyer

MoreControl

LessControl

8


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( INCOTERMS )GROUP TERM Stands for

E EXW Ex Works

F

FCA Free Carrier

FAS Free Alongside Ship

FOB Free On Board

C

CFR Cost and Freight

CIF Cost, Insurance and Freight

CPT Carriage Paid To

CIP Carriage and Insurance Paid To

D DAF Delivered At Frontier

DES Delivered Ex Ship

DEQ Delivered Ex Quay

DDU Delivered Duty Unpaid

DDP Delivered Duty Paid


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EXW

EXW

ORKS (

named place)

"Ex works" means the seller's only responsibility is to make the

goods available at the seller's premises, i.e. factory, mill or

warehouseThe seller is not responsible for loading the goods on the

vehicle provided by the buyer unless otherwise agreed.

The buyer bears the full costs and risk involved in collectingthe goods from there to the desired destination. Ex works

represents the minimum obligation of the seller.


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EXWEx Works (named place)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival

Delivery atnamed place of

destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises

Sellers

Risks

Buyers Risks

Sellers

Cost

Buyers Cost

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Obligations of the

Salesperson.

He surrenders of

the merchandise

and necessarydocuments

Pack and packing

Obligations of the Buyer.

Pay of the merchandise

Freight internal (of factory to the export place)

Customs (documents, permits, requirements,

taxes)

Export expenses (you maneuver, storage, agents)

Freight international (of export place to the import

place)

Import expenses (you maneuver, storage, agents)

Transport and sure (import place to plant)


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Incoterms 2000

The F terms require the seller to deliver

goods for carriage as instructed by the buyer.

FCA

FAS

FOB


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FCA

FREE CA

RRIER (named place) Seller delivers when goods, cleared for export, to thecarrier nominated by the buyer at a named place.

The risk of loss or damage to the goods is transferredfrom seller to buyer at that time and not at the ship'srail.

Seller obligated to load goods on arriving vehicle if it

arrives at the sellers premises.

The term "carrier" means any person by whom or inwhose name a contract of carriage by road, rail, air,

sea, or a combination of modes has been made.


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FCAFree Carrier(named place)

SELLER BUYER

Seller/

Exporter

Premises

Export

Documents

Formalities

Delivered

at named

place of:

Frontier/

Terminal/

Quay

Loading

Port of

Shipment

Onboard

Ship

Rail

Plane

Ships Ships

Rail Rail

Discharging

Port of

Arrival

Delivery at

named place of

destination:

Frontier/

Terminal/Quay

Import

Documents

Formalities

Buyer/

Importer

Premises

Sellers Risks Buyers

Risks

SellersCost Buyers Cost

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FAS -FREE ALONGSIDE SHIP

(

named port of shipment)

FAS or "free alongside ship" requires the seller to

deliver the goods alongside the ship on the

quay.

From that point on, the buyer bears all costs and

risks of loss and damage to the goods.

Unlike F.O.B., F.A.S. requires the buyer to clear

the goods for export and pay the cost of loading

the goods.


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FASFree Alongside(named place)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


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FOB FREEON BOARD

(... NAMED PORTOFSHIPMENT)

Under FOB the goods are placed on board the ship by

the seller at a port of shipment named in the sales

agreement.

The risk of loss of or damage to the goods is transferred

to the buyer when the goods pass the ship's rail (i.e., off

the dock and placed on the ship).

The seller pays the cost of loading the goods.

If intent is not to deliver goods across the ships rail, use

FCA


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FOBFree On Board(named port of shipment)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


19


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Incoterms 2000

The C terms require the seller to

contract for carriage at his expense to a

specified point.

CFR

CIF

CP

T CIP


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CFR COST AND FREIGHT

(named port of destination)

Seller delivers when goods, cleared for export,pass the ships rail at the named port ofshipment.

The seller pays the costs and freight necessaryto bring goods to port of destination, but thebuyer bears the risk of loss and additional costsoccurring after delivery.

Term can be used for sea or inland waterwaytransport.

If intent is not to deliver goods across the shipsrail, use CPT


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CFRCost and Freight (named port of destination)

SELLER BUYER

Seller/

ExporterPremises

Export

DocumentsFormalities

Delivered

at namedplace of:Frontier/

Terminal/Quay

Loading

Port ofShipment

Onboard

ShipRail

Plane

Ships ShipsRail Rail

Discharging

Port ofArrival

Delivery at

named place ofdestination:

Frontier/

Terminal/Quay

Import


Buyer/

ImporterPremises

Sellers Risks Buyers Risks

Sellers Cost Buyers Cost

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CIF COST, INSURANCE AND

FREIGH

T(named port of destination)

CIF is CFR with the additional requirement that the seller

procure transport insurance against the risk of loss or

damage to goods.

The seller pays the costs and freight necessary to bring

goods to port of destination, but the buyer bears the risk

of loss and additional costs occurring after delivery.

The seller procures marine insurance, against

buyers risk of loss. Seller is required to obtain

insurance only on minimum cover.


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CIFCost, Insurance and Freight (named port of destination)

SELLER BUYER

Seller/

ExporterPremises

Export


Delivered

at namedplace of:Frontier/

Terminal/Quay

Loading

Port ofShipment

Onboard

ShipRail

Plane

Ships ShipsRail Rail

Discharging

Port ofArrival

Delivery at

named place ofdestination:

Frontier/

Terminal/Quay

Import


Buyer/

ImporterPremises

SellersRisks

Buyers Risks

SellersCosts

Buyers Cost

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CPT CARRIAGE PAID TO

(named place of destination)

Seller delivers the goods, cleared for export, to

the carrier.

The seller pays the costs of carriage necessary

to bring goods to named destination, but thebuyer bears the risk of loss and additional costs

occurring after delivery.

Accordingly, "freight/carriage paid to" can be

used for all modes of transportation, including

container or roll-on roll-off traffic by trailers and

ferries.


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CPTCarriage Paid To (named port of destination)

SELLER BUYER

Seller/

Exporter

Premises

Export

Documents

Formalities

Delivered

at named

place of:

Frontier/

Terminal/

Quay

Loading

Port of

Shipment

Onboard

Ship

Rail

Plane

Ships Ships

Rail Rail

Discharging

Port of

Arrival

Delivery at

named place of

destination:

Frontier/

Terminal/Quay

Import

Documents

Formalities

Buyer/

Importer

Premises


Risks

Sellers Cost BuyersCosts

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CIP CARRIAGE AND INSURANCE PAID

TO (named place of destination)

Seller delivers the goods, cleared for export, to the carrier.

The seller pays the costs of carriage to named destination, but

the buyer bears the risk of loss and additional costs occurringafter delivery.

The seller procures insurance against buyers risk of loss.

Seller is required to obtain insurance only on a minimum cover.

This term is the same as "freight/carriage paid to (CPT)" but

with the additional requirement that the seller has to procure

transport insurance against the risk of loss or damage to the

goods during the carriage.


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CIPCarriage and Insurance Paid To (named port of destination)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises

Sellers Risks Buyers Risks

Sellers Cost Buyers Cost

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Incoterms 2000

The D terms require the seller to take the

goods all the way to destination at the border or

within the country of import.

DAF

DES

DEQ

DDU DDP


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DDU DELIVERED DUTY UNPAID


Seller delivers goods to the buyer, not cleared

for import, and not unloaded, at the named

place of destination.

Seller bears all costs and risks (except duty) to

bring goods to the named place of destination.

Term may be used irrespective of mode of

transport.

If delivery is to take place at the port, quay or

on board a vessel, DES or DEQ should be

used.


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DDUDelivered Duty Unpaid(named place of destination)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


31


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DDP DELIVERED DUTY PAID


Seller delivers goods to the buyer, cleared for import,

and not unloaded, at the named place of destination.

Seller bears all costs and risks, including import duty,

to bring goods to the named place of destination.

Term may be used irrespective of mode of transport.

If delivery is to take place at the port, quay or on boarda vessel, DES or DEQ should be used.


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DDPDelivered Duty Paid(named place of destination)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


33


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DAF DELIVERED AT FRONTIER

(named place)

Seller delivers goods, cleared for export, at

disposal of buyer on arriving means of

transport. Not unloaded, not cleared for import at point at

frontier before customs border of adjoining

country.

Term may be used irrespective of the mode of

transport when goods are delivered at a land

frontier.


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DAFDelivered At Frontier(named place)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


35


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DES DELIVERED EX SHIP


Seller delivers goods at disposal of buyer on

board the ship.

Not cleared for import at the named port ofdestination.

Seller bears all costs and risks to bring goods to

the named port before discharging.

Term used only for delivery by sea.

If the seller is to bear the costs of discharging

the goods, DEQ should be used.


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DESDelivered exShip(named port of destination)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


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DEQ DELIVERED EX QUAY


Seller delivers goods, not cleared for

import, at disposal of buyer on the

quay at the named port of destination. Seller bears all costs and risks to

bring goods to the named port of

destination and discharging the goodson the quay.

Term used only for delivery by sea.


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DEQDelivered Ex Quay(named port of destination)

SELLER BUYER

Seller/Exporter

Premises

ExportDocuments

Formalities

Deliveredat named

place of:

Frontier/

Terminal/

Quay

LoadingPort of

Shipment

OnboardShip

Rail

Plane

Ships Ships

Rail Rail

DischargingPort of

Arrival


destination:

Frontier/

Terminal/Quay

ImportDocuments

Formalities

Buyer/Importer

Premises


Risks


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Summary of terms

For a given term, "Yes" indicates that the seller

has the responsibility to provide the service

included in the price. "No" indicates it is the

buyer's responsibility. If insurance is notincluded in the term (for example, CFR) then

insurance for transport is the responsibility of the

buyer or the seller depending on who owns the

cargo at time of transport. In the case of CFRterms, it would be the buyer while in the case of

DDU or DDP terms, it would be the seller.

30 November, 2009


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February 8, 2006

DES Yes Yes Yes Yes Yes Yes No No No Yes No No

DEQ Yes Yes Yes Yes Yes Yes Yes No No Yes No No

DDU Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No

DDP Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Load to

truck

Export-

duty

payment

Transport

to

exporter's

port

Unload

from

truck at

the

origin's

port

Landing

charges at

origin's

port

Transport

to

import's

port

Landing

charges at

importer's

port

Unload

onto

trucks

from the

importers'

port

Transport

to

destinatio

n

Insurance

Entry -

Customs

clearance

Entry -

Duties

and Taxes

EXW No No No No No No No No No No No No

FCA Yes Yes Yes No No No No No No No No No

FAS Yes Yes Yes Yes No No No No No No No No

FOB Yes Yes Yes Yes Yes No No No No No No No

CFR Yes Yes Yes Yes Yes Yes No No No No No No

CIF Yes Yes Yes Yes Yes Yes No No No Yes No No

CPT Yes Yes Yes Yes Yes Yes No No No No No No

CIP Yes Yes Yes Yes Yes Yes No No No Yes No No

DAF Yes Yes Yes Yes Yes Yes No No No No No No


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Mode of Transport and Appropriate

Incoterm - Any Mode of Transport

EXW

FCA

CPT

CIP

DAF

DDU

DDP

30 November, 2009


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Mode of Transport and Appropriate

Incoterm Maritime and Inland

Waterway Transport Only

FAS

FOB

CFR

CIF

DES

DEQ

30 November, 2009


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GUIDELINES TOUSING

INCOTERMS Always specify which terms are applicable.

When completing documents ensure that you are

using the correct format of a term e.g.

The term CFR is persistently misused/replaced withC&F or C+F.

C+F has never existed.

C&F did exists but was replaced with CFR in 1980.

If C&F is used by mistake a court of law will use thepre 1980 meaning of the term which is very different

from the current meaning of CFR as in Incoterms 1990

and Incoterms 2000.


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u..GUIDELINES TOUSING

INCOTERMS

Draw up a check list of your duties and rights under

the selected term and check that every intended or

completed transaction conforms to this list, and thatnothing is omitted.

Request your trading partner to do the same, and

exchange this information with them.

Inform your bank and insurance company whichIncoterm(s) have been selected for your business, so

that they can determine exactly what your duties and

rights are with regard to a transaction in which they

may have a role to play.


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IN SUMMARY

Must name a place after the INCOTERM

INCOTERMS are negotiable!

INCOTERMS should appear on all commercialdocuments

Establish a close relationship with a forwarder

4630 November, 2009


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REFERENCE

SHORTOVERVIEWOFINTERNATIONAL

COMMERCEVOCABULARY

T INTERNATIONALCHAMBEROF

COMMERCE (ICC) INCOTERM LIST

T INCOTERMS 2000

T WIKIPEDIA

.


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QU

ESTION

S !

Swapi


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MY BREAKFAST

Swapi


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MY BREAKFAST

YOU KNOW|FEEDBACK}

IS THEuu

S api

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