EXW
- EX WORKS (... named place)
"Ex
works" means that the seller delivers when he places the goods at the disposal
of the buyer at the seller's premises or another named place (i.e. works,
factory, warehouse, etc.) not cleared for export and not loaded on any
collecting vehicle.
This
term thus represents the minimum obligation for the seller, and the buyer
has to bear all costs and risks involved in taking the goods from the seller's
premises.
However,
if the parties wish the seller to be responsible for the loading
of the goods on departure and the bear the risk and all the costs of such
loading, this should be made clear by adding explicit wording to this effect
in the contract of sales. This term should not be used when the buyer cannot
carry out the export formalities directly or indirectly. In such circumstances,
the FCA term should be used, provided the seller agrees that he will load
at his cost and risk.
FCA
- FREE CARRIER (... named place)
"Free
Carrier" means that the seller delivers the goods, cleared for export,
to the carrier nominated by the buyer at the named place. It should be
noted that the chosen place of delivery has an impact on the obligations
of loading and unloading the goods at that place. If delivery accurst at
the seller's premises, the seller is responsible for loading. If delivery
accurst at any other place, the seller is not responsible for unloading.
This term may be used irrespective of the mode of transport, including
multimodal transport.
"Carrier"
means any person who, in a contract of carriage, undertakes to perform
or to procure the performance of transport by rail, road, air, sea, inland
waterway or by a combination of such modes.
If
the buyer nominates a person other than a carrier to receive the goods,
the seller is deemed to have fulfilled his obligation to deliver the goods
when they are delivered to that person.
FAS
- FREE ALONGSIDE SHIP (... named port of shipment)
"Free
Alongside Ship" means that the seller delivers when the goods are placed
alongside the vessel at the named port of shipment. This means that the
buyer has to bear all costs and risks of losse of or damage to the goods
from that moment.
The
FAS term requires the seller to clear the goods for export.
This
is a reversal from previous Incoterms versions which required the buyer
to arrange for export clearance.
However,
if the parties wish the buyer to clear the goods for export, this should
be made clear by adding explicit wording to this effect in the contract
of sale.
This
term can only be used only for sea or inland waterway transport.
FOB
- FREE ON BOARD (... named port of shipment)
"Free
on Board" means that the seller delivers when the goods pass the ship's
rail at the named port of shipment. this means that the buyer has to bear
all costs and risk of loss of or damage to the goods from that point. The
FOB term requires the seller to clear the goods for export. This term can
be used only for sea or inland waterway transport. If the parties do not
intend to deliver the goods across the ship's rail, the FCA term should
be used.
CFR
- COST AND FREIGHT (... named port of destination)
"Cost
and Freight" means that the seller delivers when the goods pass the ship's
rail in the port of shipment.
The
seller must pay the costs and freight necessary to bring the goods to the
named port of destination BUT risk of loss of or damage to the goods, as
well as any additional costs due to events occuring after the time of delivery,
are transferred from the seller to the buyer.
The
CFR term requires the seller to clear the goods for export.
This
term can be used only for sea and inland waterway transport. If the parties
do not intend to deliver the goods across the ship's rail, the CPT term
should be used.
CIF
- COST, INSURANCE AND FREIGHT (... named port of destination)
"Cost,
Insurance and Freight" means that the seller delivers when the goods pass
the ship's rail in the port of shipment.
The
seller must pay the costs and freight necessary to bring the goods to the
named port of destination BUT the risk of loss of or damage to the goods,
as well as any additional costs due to events occuring after the time of
delivery, are transferred from the seller to the buyer. However, in CIF
the seller also has to procure marine insurance against the buyer's risk
of loss of or damage to the goods during carriage.
Consequently,
the seller contracts for insurance and pays the insurance premium. The
buyer should note that under the CIF term the seller is required
to obtain insurance only on minimum cover. Should the buyer wish to have
the protection of greater cover, he would either need to agree as much
expressly with the seller or to make his own extra insurance arrangements.
The
CIF term requires the seller to clear the goods for ecport.
The
term can be used only for sea and inland waterway transport. If the parties
do not intend to deliver the goods across the ship's rail, the CIP term
should be used.
CPT
- CARRIAGE PAID TO (... named place of destination)
"Carriage
paid to... " means that the seller delivers the goods to the carrier nominated
by him but the seller must in addition pay the cost of carriage necessary
to bring the goods to the named destination. This means that the buyer
bears all risks and any other costs occuring after the goods have been
so delivered.
"Carrier"
means any person who, in a contract of carriage, undertakes to perform
or to procure the performance of' transport, by rail, road, air, sea, inland
waterway or by a combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination,
the risk passes when the goods have been delivered to the first carrier.
The CPT term requires the seller to clear the goods for export.
This term may be used irrespective of the mode of transport including multimodal
transport.
CIP
- CARRIAGE AND INSURANCE PAID TO (... named place of destination)
"Carriage
and insurance paid to..." means that the seller delivers the goods to the
carrier nominated by him, but the seller must in addition pay the cost
of carriage necessary to bring the goods to the named destination. This
means that the buyer bears all risks and any other costs occuring after
the goods have been so delivered. However, in CIP the seller also has to
produce insurance against the buyer's risk of loss of or damage to the
goods during the carriage.
Consequently,
the seller contracts for insurance and pays the insurance premium.
The
buyer should note that under the CIP term the seller is required to obtain
insurance only on minimum cover. Should the buyer wish to have the protection
of greater cover, he would either need to agree as much expressly with
the seller or to make his own extra insurance arrangements.
"Carrier"
means any person who, in a contract of carriage, undertakes to perform
or to procure the performance of' transport, by rail, road, air, sea, inland
waterway or by a combination of such modes.
If
subsequent carriers are used for the carriage to the agreed destination,
the risk passes when the goods have been delivered to the first carrier.
The
CIP term requires the seller to clear the goods for export.
This
term may be used irrespective of the mode of transport, including
multimodal transport.
DAF
- DELIVERED AT FRONTIER (... named place)
"Delivered
at Frontier" means that the seller delivers when the goods are placed at
the disposal of the buyer on the arriving means of transport not unloaded,
cleared for export, but not cleared for import at the named point and place
at the frontier, but before the customs border of the adjoining country.
The term "frontier" may be used for any frontier including that of the
country of export. Therefore, it is of vital importance that the frontier
in question be defined precisely by always naming the point and place in
the term.
However,
if the parties wish the seller to be responsible for the unloading of the
goods from the arriving means of transport and to bear the risks and costs
of unloading, this should be made clear by adding explicit wording to this
effect in the contract of sales.
This
term may be used irrespective of the mode of transport when goods are to
be delivered at a land frontier. When delivery is to take place in the
port of destination, on board a vessel or on a quay (wharf), the DES or
DEQ terms should be used.
DES
- DELIVERED EX SHIP (... named port of destination)
"Ex Ship" means that the seller delivers when the goods are placed at the
disposal of the buyer on board the ship not cleared for import at the named
port of destination. The seller has to bear all the costs and risk involved
in bringing the goods to the named port of destination before discharging.
If the parties wish the seller to bear the costs and risk of discharging
the goods, then the DEQ term should be used.
This
term can be used only when goods are to be delivered by sea or inland waterway
or multimodal transport on a vessel in the port of destination.
DEQ
- DELIVERED EX QUAY (DUTY PAID) (... named port of destination)
"Delivered
Ex Quay " means that the seller delivers when the goods are placed at the
disposal of the buyer not cleared for import on the quay (wharf)
at the named port of destination. The seller has to bear costs and risks
involved in bringing the goods to the named port of destination and discharing
the goods on the quay (wharf). The DEQ term requires the buyer to clear
the goods for import and to pay for all formalities, duties, taxes and
other charges upon import.
This
is a very reversal from previous Incoterms versions which required the
seller to arrange for import clearance.
If
the parties wish to include in the seller's obligations all or part of
the costs payable upon import of the goods, this should be made clear by
adding explicit wording to this effect in the contract of sale.
This
term can be used only when goods are to be delivered by sea or inland waterway
or multimodal transport on discharging from a vessel onto the quay (wharf)
in the port of destination. However if the parties wish to include in the
seller's obligations the risks and costs of the handling of the goods from
the quay to another place (warehouse, terminal, transport station, etc.)
in or outside the port, the DDU or DDP terms should be used.
DDU
- DELIVERED DUTY UNPAID (... named place of destination)
"Delivered duty unpaid" means that the seller delivers the goods to the
buyer, not cleared for import, and not unloaded from any arriving means
of transport at the named place of destination. The seller has to bear
the costs and risks involved in bringing the goods thereto, other than,
where applicable, any "duty" (which term includes the responsibility for
and the risks of the carrying out of customs formalities, and the payment
of formalities, customs duties, taxes and other charges) for import in
the country of destination. Such "duty" has to be borne by the buyer as
well as any costs and risks caused by his failure to clear the goods for
import in time.
However,
if the parties wish the seller to carry out customs formalities and bear
the costs and risks resulting therefrom as well as some of the costs payable
upon import of the goods, this should be made clear by adding explicit
wording to this effect in the contract of sale.
This
term may be used irrespective of the mode of transport but when delivery
is to take place in the port of destination on board the vessel or the
quay (wharf), the DES or DEQ terms should be used.
DDP
- DELIVERED Duty PAID (... named place of destination)
"Delivered
duty paid" means that the seller delivers the goods to the buyer, cleared
for import, and not unloaded from any arriving means of transport at the
named place of destination. The seller has to bear all the costs and risks
involved in bringing the goods thereto including, where applicable, any
"duty" (which term includes the responsibility for and the risks of the
carrying out of customs formalities, and the payment of formalities, customs
duties, taxes and other charges) for import in the country of destination.
Whilst the EXW terms represents the minimum obligation for the seller,
DDP represents the maximum obligation.
This
term should not be used if the seller is unable directly or indirectly
to obtain the import licence.
However,
if the parties wish to exclude from the seller's obligations some of the
costs payable upon import of goods (such as value-added tax : VAT), this
should be made clear by adding explicit wording to this effect in the contract
of sale.
If
the parties wish the buyer to bear all risks and costs of the import, the
DDU term should be used.
This
term may be used irrespective of the mode of transport but when delivery
is to take place in the port of destination on board the vessel or the
quay (wharf), the DES or DEQ terms should be used.
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