Incoterms are international standards accepted by all governments and authorities, as well as the parties involved

in the transport of goods.

 

They regulate the most common conditions used in international trade and aim to establish defined criteria on the distribution of expenses and the transmission of risks between two parties, buyer and seller, of an international sales contract.

 

CFR (Cost and Freight): The seller pays the transport and other expenses necessary for the merchandise to arrive at the agreed port, although the risk of loss or damage of the merchandise is transmitted from seller to buyer once there is been delivered is on board the ship in the port of embarkation and has transferred the board of the same. It also requires the seller to dispatch the export merchandise. The insurance is the responsibility of the buyer.

 

CIF (Cost, Insurance and Freight) : The seller has the same obligations as under CFR, although, in addition, he must contract and pay the insurance premium for coverage of the loss or damage of the merchandise during the transport, occupying itself in addition, of the dispatch of the merchandise in customs for the export.

 

CIP (Carriage and Insurance Paid to) : This term obliges the seller in the same way as the CPT and must also contract the insurance and pay the corresponding premium, to cover the loss or damage of the merchandise during transport, although, you are only required to take out insurance with minimum coverage.

 

CPT (Carriage Paid to): The seller hires and pays the transport freight of the merchandise until the agreed place of destination. The risk of loss or damage is transferred from the seller to the buyer when the goods have been delivered to the custody of the first carrier designated by the seller, if there are several. Customs clearance for export is done by the seller.

 

DAF (Delivered at Frontier): The seller fulfills his obligation, when, once the merchandise is cleared at the customs for export, delivery at the agreed point and place of the border, before passing the border customs of the country adjoining and without responsibility to download it. It is vitally important that the "term" border be precisely defined.

 

DDP (Delivered Duty Paid): In this term the seller realizes the delivery of the goods to the buyer, dispatched for the import and not unloaded of the means of transport on arrival at the agreed place of the country of the import. The seller assumes all costs and risks, including duties, taxes and other charges to bring the goods to that place, once cleared in customs for import.

 

DDU (Delivered Duty Unpaid): The seller delivers the goods to the buyer at the agreed place in the buyer's country, not cleared for the import customs and not unloaded from the means of transport, upon arrival at said place .

The term DDU can be used in any means of transport.

The seller must assume all expenses and risks related to bringing the goods to the agreed place. The buyer has to pay any additional expenses and bear the risks in case of not being able to dispatch the merchandise in customs for its importation in due time.

DEQ (Delivered ex Quay): The seller fulfills his delivery obligation when he places the goods at the disposal of the buyer on the dock and once unloaded, at the port of destination agreed. In this term, the buyer is obliged to perform the customs clearance of the goods for importation. It is only used in maritime transport.

 

DES (Delivered ex Ship): The merchandise is placed by the seller at the disposal of the buyer on board the vessel, at the port of destination agreed upon, without actually dispatching it to customs for importation. The seller assumes the costs and risks of transporting the goods to the port of destination, but not of the discharge. It is only used when transport is by sea.

 

EXW (Ex Works): The seller is obliged to put at the disposal of the buyer in his establishment or agreed place (eg factory, workshop, warehouse, etc.), without dispatching it for export or carrying out the loading in the receiving vehicle , concluding its obligations.

 

FAS (Free Alongside Ship): The delivery of the merchandise is done when it is placed by the seller at the side of the ship at the agreed port of shipment, all costs and risks of loss or loss are borne by the buyer. damage of the merchandise from that moment. This incoterm requires the seller to dispatch the goods in customs for export.

 

FCA (Free Carrier): The seller delivers the goods and dispatches them for export to the carrier appointed by the buyer at the agreed place. The place of delivery chosen determines the obligations of loading and unloading the goods in that place: if the delivery takes place in the premises of the seller, he is responsible for the cargo; If delivery occurs elsewhere, the seller is not responsible for the download.

 

FOB (Free on Board): The seller is obliged to load the goods on board the ship at the port of shipment specified in the sales contract. The buyer selects the vessel and pays the ocean freight. The transfer of risks and expenses occurs when the merchandise exceeds the ship's rail. The seller is responsible for the procedures for export.

Incoterms

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