Вы находитесь на странице: 1из 6

Incoterms

Incoterms are worldwide accepted commercial terms that defines the respective roles of the buyer as well as of the seller in arrangement of the transportation and other responsibilities and it also clarifies when the ownership of the merchandise takes place. These incoterms are used in conjunction with a sales contract or other method of transacting the deal.

The following are the Incoterms 2000 which are generally used:

Origin Terms
EXW (Ex-Works) - The title and risk passes on to the buyer including the payment of all transportation and insurance cost from the seller's point. It can be used for any mode of transport.

International Carriage Not Paid by Seller


FCA (Free Carrier) - The title and risk passes on to the buyer including the transportation and insurance cost if the seller delivers the goods cleared for export to the carrier. In this case the seller is obligated to load the goods on the buyer's collecting vehicle but it is the buyer's obligation to receive the seller's arriving vehicle unloaded.

FAS (Free Alongside Ship) - The title and risk passes on to the buyer, included the transportation and insurance payment, once the goods delivered alongside ship by the seller. It is only used for the sea or inland waterway transportation and the export clearance obligation rests with the seller.

FOB (Free On Board) - In FOB the risk passes to buyer, included the transportation and insurance payment, once delivered on board the ship by the seller. It is only used for sea or inland waterway transportation.

International Carriage Paid by the Seller


CFR (Cost and Freight) - The title, risk and the insurance cost passes on to the buyer if delivered on board the ship by seller who paid the transportation cost to the destination point. It is only used for sea or inland waterway transportation.

CIF (Cost, Insurance and Freight) - The title and risk passes on to the buyer if delivered on board the ship by the seller who paid the transportation and insurance cost to the destination port. It is used for sea or inland waterway transportation.

CPT (Carriage Paid To) - The title, risk and insurance cost passes to the buyer if the goods delivered to carrier by the seller who pays transportation cost to the destination. It can be used for any mode of transportation.

CIP (Carriage and Insurance Paid To) - The title and risk passes to the buyer if the goods are delivered to carrier by the seller and he pays transportation and insurance cost to destination. It can be used for any mode of transportation.

Arrival At Stated Destination


DAF (Delivered at Frontier) - The title, risk and responsibility for the import clearance passes on to the buyer if the goods are delivered to named border point by the seller. It can be used for any mood of transportation.

DES (Delivered Ex Ship) - The title, risk, responsibility for the vessel discharge and the import clearance passes on to the buyer when the seller delivers it on board the ship to destination port. It is used for sea or inland waterway transportation.

DEQ (Delivered Ex Quay - Duty Paid) - The title and risk passes to the buyer if the goods are delivered on board the ship at the destination point by the seller who on his part delivers the goods on dock at the destination point cleared for import. It is used for sea or inland waterway transportation.

DDU (Delivered Duty Unpaid) - The title, risk and responsibility of the import clearance passes on to the buyer if the seller delivers the goods to named destination point. It can be used for any mode of transportation. Here the buyer is obligated for import clearance.

DDP (Delivered Duty Paid) - The title and risk passes on to the buyer when the seller delivers the goods to the named destination point cleared for the import. It is also used for any mode of transportation.

Note :- EXW, CPT, CIP, DAF, DDU and DDP are used for any mode of transportation whereas the incoterms FAS, FOB, CFR, CIF, DES, and DEQ are used for sea and inland waterway.

Ten Underlying Principles 1. Incoterms deal only with the time and the place at which costs and risk are to be shifted from the seller to the buyer. Incoterms deal only with the break points (in terms of time and place) in costs and risk between the seller and the buyer. They do not deal with other aspects of the underlying transactions, such as applicable law or arbitration. The ICC does not impose any sanctions against violation of the obligations specified in Incoterms. This is purposely left to the court of law to decide. Incoterms do not cover other parties involved in the underlying transactions, such as bankers, carriers, freight forwarders, insurers, inspection agents, and customs and excise. 2. Incoterms do not deal with title or ownership. Title and ownership are too complicated a subject for Incoterms to deal with effectively. For example, in Common Law alone, the change in title varies according to the nature of the goods - depending on whether they are specific goods [goods unable to be specified have no title; for example trees, as demonstrated by Kursell -v- Timber Operators (1927) C.A.], unascertained goods [homogeneous goods mixed up together have no title until they are separated into distinct heaps; for example, wheats, as demonstrated by Re Wait (1927) C.A. and Mc Dougall -v- Aeromarine of Emsworth (1958) Q.B.], or future goods [manufactured goods not yet made from the raw materials have no title; for example, animal feedstuff, as demonstrated by Sainsbury -v- Street (1972) Assizes, Ashington Piggeries -v- Hill (1971) H.L., and Varley -v- Whipp (1900) Q.B.] Change in title rights should be specified by the parties in their contracts. Otherwise, it will be difficult to resolve the disputes on title rights, particularly for unascertained goods and future goods. 3. Incoterms continued goal is to impose minimum obligations on the sellers. Putting minimum obligations on the sellers has been the cornerstone principle of Incoterms since the beginning. The underlying reasons are:

(a) Incoterms have no intention to help the parties, such as the buyer, to police the trade. This cannot be effectively done because, different trades have different trade customs and practices. Each port has its own customs of the port that cannot be generalized. (b) Incoterms provide only a platform of basic rights and obligations that are common across different trades. Incoterms leave the parties to modify or add other specific terms and conditions that they may need in their own special trading environments. (c) Incoterms impose the minimum obligations on the sellers, sellers feel more comfortable using them in their offers and to start the ball rolling. (d) To make Incoterms acceptable to the buyers, the buyers are given the right to delete, modify, or add other special terms and conditions as they please. In other words, Incoterms provide default rules only. It is therefore important for the buyer to look carefully at Incoterms to ensure that the buyers rights (the sellers obligations) are well protected and buyers obligations (the sellers rights) are fairly and reasonably imposed to maintain equilibrium in the trade. 4. Incoterms provide for the party domiciled to clear the goods for customs. Incoterms 1990 require the buyer to clear the goods for export in FAS (Free Alongside Ship). Although the buyer may appoint a freight forwarder as its agent to perform this task, he may however incur additional costs and other complications. For certain controlled goods (such as rare metals that have high national security value as a wartime reserve) only citizens of the exporting country or a few selective licensed traders have the right to clear the goods for export. Under such circumstances, Incoterms become a trade barrier to some buyers. Similarly in the DEQ (Deliver Ex Quay) under Incoterms 1990 the seller is required to clear the goods for import and may encounter the same problems as the buyer faces in FAS term. During the drafting stage, Incoterms 2000 Working Group realized these problems and found themselves at an junction of two crossroads. Should Incoterms 2000 continue to uphold the cornerstone principle of imposing minimum obligations on the sellers? If the answer is affirmative, there should not be any change in FAS and DEQ as far as customs clearance is concerned.

However, Incoterms also have an important role to play ?to facilitate international trade by removing trade barriers and to maintain trade equilibrium between sellers and buyers with respect to rights and obligations. In Incoterms 2000 removing the obligation to clear the goods for export for the buyer in FAS Incoterms are fully balanced by removing similar obligation to clear the goods for import for the seller in DEQ. 5. Incoterms have been split into two distinct groups to avoid confusions. Since Incoterms were introduced in 1936, terms such as FOB, CFR, and CIF are often wrongly used by the traders, due to ignorance, negligence, or bad habits. FOB among certain manufacturers in China may mean EXW (Ex Works). Under Ex Works the buyer or its representative must claim the goods from the manufacturers warehouse at its own cost and risk. CFR Airport or CIF Airport are very commonly used for shipments by airfreight whereas CFR and CIF should only be used in marine transport, specifically for break bulk shipments (rather than container shipments with loading on board container ships berthed at container depots, in which case CPT or CIP should be used). Having said that, in practice, there still are shipments of goods stowed in containers, but loading on board is done by barges or feeder boats, particularly in the so-called mid-stream operations, onto break-bulk vessels that can also accommodate a certain quantity of containers. Under such circumstances, although it is a container shipment, FOB and CIF (other than CPT or CIP) should be used because the break point of cost and risk is still at the ships rail. Now, in Incoterms 2000, the terms are for the first time being split into two main groups, the Maritime and Inland Waterway Transport?Group (FAS, FOB, CFR, CIF, DES, and DEQ) and the Any Mode of Transport?Group (EXW, FCA, CPT, CIP, DAF, DDU, and DDP). With this clear demarcation, the Working Group hopes that the trading parties will stop using maritime Incoterms in air transport, surface transport, or multimodal transport. This task cannot be achieved simply by splitting Incoterms into two main groups. Extensive training should be provided across industries to help to break the deep-rooted habits of some traders. 6. Incoterms 2000 will maintain DAF. During the drafting stage, representatives from ICC National Committees in China, Cyprus, Hungary, India, Iran, Holland, Sweden, and the United States suggested deleting DAF (Deliver at Frontier), because this term has caused a

lot of problems in transactions with delivery at frontier. However, representatives of Canada, Germany, Italy, Mexico, Peru, Finland, Switzerland, and the United Kingdom proposed retaining DAF, because this term is helpful and frequently used in transactions with delivery at frontier. In the end, DAF was retained in Incoterms 2000 because those parties who have difficulties with DAF may use CPT naming the border as the place of delivery. However, terms such as Franco Border,?Franco Frontiere,?and Frei Granze?should not be used, as different parties may have different interpretations. 7. Variants of Incoterms can be created. Variants of Incoterms, such as:
o o o o o o o o o o o o

EXW Loaded EXW Cleared FAS Cleared FCA Undischarged FCA Loaded FOB Stowed CIF Maximum Cover CFR / CIF Undischarged CFR / CIF Landed CIP Loaded DDU Cleared DDP VAT Unpaid

are created by the parties to meet their specific needs and to modify Incoterms by re-allocating certain rights and obligations. Since further details in the rights and obligations for sellers and buyers of these variants are not clearly defined, Incoterms 2000 Working Party has decided not to include them in Incoterms 2000. Because these variants are very useful in certain trades, it would be worth the time and effort of the ICC Commission on International Commercial Practice (which is responsible for drafting the Incoterms 2000) to form a special task force to standardize and clarify the rights and obligations of these variants, so that they can become part of Incoterms (as the ICC did in the past with the FOB Everywhere?from the American Foreign Trade Definitions 1919 of USA). 8. Incoterms 2000 specifies that terminal handling charges are not covered.

Terminal Handling Charges (THC) are not included in Incoterms 2000, although the THC often give rise to trade disputes in many countries. There is no official interpretation for THC as different ports may have different customs of the port. 9. Incoterms 2000 are overridden by specific sales contracts. In case of conflicts, the terms and conditions of the sales contract, being more specific to the underlying transactions, shall override Incoterms 2000, which remain only a generalized code of default rules that may be modified by the sales contract to provide flexibility to the users. 10. Incoterms are voluntary. Adoption of Incoterms is voluntary, although some banks use Incoterms in their letter of credit application forms. The parties, the beneficiary (as a seller) and the applicant (as a buyer), should have the right to delete or modify Incoterms to meet their specific needs. Incoterms are created to define the rights and obligations between the sellers and the buyers only. They have nothing to do with the banks. Under Article 3 of the UCP 500, a letter of credit is separate from, and not bound by or concerned with, the underlying contracts, including Incoterms (although Incoterms are also another product of the ICC).