Incoterms1
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INCOTERMS 2000
Incoterms – what are they and what can they do for you • Incoterms is an abbreviation of International commercial terms • It is a vital term of the contract of sale and not of the contract of carriage • It guides seller and buyers with regard to: - carriage of goods from seller to buyer - export and import clearance and also the division of costs and risk between the parties
Incoterms • Use generally recognized key words • Agree on the most common understanding of those key words • Avoid misunderstandings in their use
Incoterms • Problems still occur because: - commercial practice is inconsistent - variations of the key word may not be appropriate - the Incoterm is not sufficiently precise - the parties inadvertently choose the wrong term
Incoterms – what are they and what they cannot do for you • Incoterms do not deal with: -
transfer of property rights in the goods
relief from obligations and exemptions from liability in case of unexpected or unforeseen events
Incoterms – what are they and what they cannot do for you • Incoterms also do not deal with: - consequences of various breeches of contract, except those relating to the passing of risk and costs when the buyer is in breach of his obligation to accept the goods or to nominate the carrier under an F-term
Incoterms –referencing in a contract of sale • Parties are strongly advised to - include in the contract of sale in conjunction with the trade term the words “Incoterms 2000” and … • check that standard contract contains such a reference or superimpose
and now let’s discuss Incoterms 2000
The seller’s minimum obligation only to make goods available for the buyer at the seller’s premises (EXW)
EXW
Group E: departure
Ex Works (…named place)
Required document’s Seller’s • Commercial invoice primary duty • Buyer’s receipt • Place the goods at Optional documents the disposal of the • Other documents buyer at the named needed for export or place transit of the goods through any country or for import clearance
A
B Buyer’s primary
duty • Take delivery of the goods when it has been paced at his disposal
Critical Points: • Carriage to be arranged by the buyer • Risk and Cost transfer from the seller to the buyer when the goods are at the disposal of the buyer
The sellers’ extended obligation to hand over goods for carriage either to a carrier nominated by the buyer (FCA, FAS, FOB) or, (why?) to a carrier chosen and paid for by the seller (CFR, CPT)
together with insurance against risks in transit (CIF, CIP) CFR versus CIF?
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
Required document’s Seller’s • Commercial invoice primary duty • Usual document • Deliver the evidencing delivery goods at the named point and of goods to the carrier also load goods • Export license if necessary on buyer’s collecting Optional documents vehicle •Other documents (changed from needed for export or 1990) transit of the goods through any country or for import clearance
A
B
Buyer’s primary duty • Nominate carrier • Contract for carriage, refer clause (A3a) – ICC Guide to Incoterms 2000 • Buyer has to unload the vehicle (changed from 1990)
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
A
Seller’s primary duty • Provide evidence of delivery of goods to the carrier • Arrange export clearance
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods have been delivered to the carrier at the named place • Carriage to be arranged by the buyer or by the seller on the buyer’s behalf
FAS
Group F: main carriage not paid by seller Free Alongside Ship (…named port of shipment)
Required Seller’s document’s primary duty • Commercial invoice • Deliver the • Customary clean goods alongside receipt the ship • Export license if • Provide an necessary alongside receipt Optional documents • Arrange • export clearance Other documents needed for export or (changed from transit of the goods 1990) through any country or for import clearance
A
B
Buyer’s primary duty • Nominate carrier • Contract for carriage
FAS
Group F: main carriage not paid by seller Free Alongside Ship (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods have been placed alongside the ship • Carriage to be arranged by the buyer
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
Only to be used when: • when maritime transport will take place • when goods are to be lifted across a ship’s rail • tendered to the ship in hoses for liquid cargo • filled form silos when the cargo is to be carried loose in bulk • If not above, instead use FCA, thereby indicating the actual place where goods are handed over for carriage
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
A
Seller’s primary duty • Deliver the goods on board • Provide a clean on board receipt • Pay loading costs not included in the freight •Arrange export clearance
Required document’s • Commercial invoice • Customary clean receipt • Export license if necessary Optional documents •Other documents needed for export or transit of the goods through any country or for import clearance
B
Buyer’s primary duty • Nominate carrier • Contract for carriage • Pay unloading costs
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods pass the ship’s rail •Carriage to be arranged by the buyer
CFR
Group C: main carriage paid by seller Cost and Freight (…named port of destination) A Seller’s Required primary duty Buyer’s document’s • Contract for primary duty • Commercial invoice carriage • Accept delivery of • Transport document •Deliver the goods the goods upon on board • Export license if shipment • Provide a clean necessary transport document • Receive the goods (Bill of Lading / Sea Optional documents from the carrier Waybill) •Other documents • Pay such costs as •Arrange export needed for export or are not for the clearance transit of the goods seller’s account • Pay unloading costs through any country under the contract of if for his account under the contract of or for import carriage clearance carriage
B
CFR
Group C: main carriage paid by seller Cost and Freight (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods pass the ship’s rail • Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost, Insurance and Freight (…named port of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for • Transport document carriage and • Export license if insurance necessary •Deliver the goods on board • Insurance policy • Provide a clean (Certificate) transport document (Bill of Lading / Sea Optional documents Waybill) and a cargo •Other documents insurance policy or needed for export or certificate transit of the goods through any country or for import clearance
A
B
Buyer’s primary duty • Accept delivery of the goods upon shipment • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost, insurance and freight (…named port of destination)
CONTINUED…
A
Seller’s primary duty • Arrange export clearance • Pay loading costs • Pay unloading costs if for his account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost Insurance and Freight (…named port of destination)
Critical Points:
• Carriage and Insurance to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods pass the ship’s rail • Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for • Transport document carriage • Export license if •Deliver the necessary goods to the Optional documents (first) carrier • Provide a clean •Other documents needed for export or transport document (Bill of transit of the goods through any country Lading / Sea or for import Waybill) clearance
A
B
Buyer’s primary duty • Accept delivery of the goods when they have been delivered to the carrier • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
CONTINUED…
A
Seller’s primary duty • Pay unloading costs if for his account under the contract of carriage • Pay loading costs •Arrange export clearance
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered to the carrier •Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for the • Transport document carriage and • Export license if Insurance necessary •Deliver the • Insurance Policy goods to the (Certificate) (first) carrier • Provide a clean Optional documents •Other documents transport document (Bill of needed for export or transit of the goods Lading / Sea through any country Waybill) or for import clearance
A
B
Buyer’s primary duty • Accept delivery of the goods when they have been delivered to the carrier • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
CONTINUED…
A
Seller’s primary duty • Pay unloading costs if for his account under the contract of carriage • Pay loading costs •Arrange export clearance
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
Critical Points:
• Carriage and Insurance to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered to the carrier • Cost transfer at place of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
The seller’s maximum obligation to deliver the goods at destination (DAF, DES, DEQ, DDU or DDP)
DAF
Group D: arrival Delivered at Frontier (…named place)
Required Seller’s document’s primary duty • Commercial invoice •Deliver the goods at • Transport document the named frontier or warehouse warrant • Provide a document to enable Optional documents the buyer to take • Through transport delivery at the frontier or assist him document to obtain a through •Other documents transport document needed for export or •Arrange export transit of the goods clearance through any country or for import clearance
A
B
Buyer’s primary duty • Take delivery of the goods at the named frontier or assume responsibility for oncarriage • Arrange import clearance
DAF
Group D: arrival Delivered at Frontier (…named place)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered at the frontier • Cost transfer from the seller to the buyer when the goods have been delivered at the frontier
DES
Group D: arrival Delivered ex ship (…named port of destination)
A
Seller’s primary duty •Deliver the goods on board the ship at the Port of destination • Provide a document to enable the buyer to take delivery from the ship (Bill of Lading or delivery order) •Arrange export clearance
Required document’s • Commercial invoice • Bill of Lading or delivery order Optional documents •Other documents needed for transit of the goods through any country or for import clearance
B
Buyer’s primary duty • Take delivery of the goods from the ship at the Port of destination •Arrange import clearance
DES
Group D: arrival Delivered ex ship (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship • Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship
DEQ
Group D: arrival Delivered ex Quay (…named port of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods primary duty • Commercial on the quay at the • Take delivery of invoice Port of destination the goods from the • Provide a • Bill of Lading or ship at the Port of document to enable delivery order the buyer to take destination Optional documents delivery from the •Arrange import quay (Bill of Lading •Other documents clearance (changed or delivery order) needed for transit of from 1990) •Arrange export the goods through clearance
B
any country or for import clearance
DEQ
Group D: arrival Delivered ex Quay (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship • Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship
DDU
Group D: arrival Delivered duty unpaid (…named place of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods at primary duty • Commercial the named place of • Take delivery of invoice destination • Provide a •Document needed to the goods from the named place of document to enable take delivery the buyer to take destination Optional documents delivery •Arrange import •Other documents •Arrange export clearance clearance needed for transit of
B
the goods through any country or for import clearance
DDU
Group D: arrival Delivered duty unpaid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer •Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer
DDP
Group D: arrival Delivered duty paid (…named place of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods at primary duty • Commercial the named place of • Take delivery of invoice destination • Provide a •Document needed to the goods from the named place of document to enable take delivery the buyer to take destination • Import license, if delivery necessary •Arrange export clearance
B
DDP
Group D: arrival Delivered duty paid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer •Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer
Now which one is appropriate? • Commercial practice and the type of goods will dictate whether - the seller should refrain from undertaking additional obligations - the seller is prepared to do more than make the goods available to the buyer at the seller’s premises - the buyer’s bargaining position allows him to require the seller to undertake additional obligations the seller is able to undertake additional obligations , and in particular, to quote a more competitive price by extending his obligations
Now which one is appropriate? • Commercial practice and the type of goods will also dictate whether - it is necessary to use the maritime terms FAS, FOB, CFR or CIF when the goods are intended to be resold before they reach their destination - But …. in the case of manufactured goods (containerized), it is more appropriate to use FCA, CPT or CIF and not FAS, FOB, CFR or CIF - Manufactured goods will rarely be picked out of the ship by the buyer/quay(DES, DEQ) but rather delivered in cargo terminal, therefore DDU, DDP will be more appropriate
Thank you
Incoterms – what are they and what can they do for you • Incoterms is an abbreviation of International commercial terms • It is a vital term of the contract of sale and not of the contract of carriage • It guides seller and buyers with regard to: - carriage of goods from seller to buyer - export and import clearance and also the division of costs and risk between the parties
Incoterms • Use generally recognized key words • Agree on the most common understanding of those key words • Avoid misunderstandings in their use
Incoterms • Problems still occur because: - commercial practice is inconsistent - variations of the key word may not be appropriate - the Incoterm is not sufficiently precise - the parties inadvertently choose the wrong term
Incoterms – what are they and what they cannot do for you • Incoterms do not deal with: -
transfer of property rights in the goods
relief from obligations and exemptions from liability in case of unexpected or unforeseen events
Incoterms – what are they and what they cannot do for you • Incoterms also do not deal with: - consequences of various breeches of contract, except those relating to the passing of risk and costs when the buyer is in breach of his obligation to accept the goods or to nominate the carrier under an F-term
Incoterms –referencing in a contract of sale • Parties are strongly advised to - include in the contract of sale in conjunction with the trade term the words “Incoterms 2000” and … • check that standard contract contains such a reference or superimpose
and now let’s discuss Incoterms 2000
The seller’s minimum obligation only to make goods available for the buyer at the seller’s premises (EXW)
EXW
Group E: departure
Ex Works (…named place)
Required document’s Seller’s • Commercial invoice primary duty • Buyer’s receipt • Place the goods at Optional documents the disposal of the • Other documents buyer at the named needed for export or place transit of the goods through any country or for import clearance
A
B Buyer’s primary
duty • Take delivery of the goods when it has been paced at his disposal
Critical Points: • Carriage to be arranged by the buyer • Risk and Cost transfer from the seller to the buyer when the goods are at the disposal of the buyer
The sellers’ extended obligation to hand over goods for carriage either to a carrier nominated by the buyer (FCA, FAS, FOB) or, (why?) to a carrier chosen and paid for by the seller (CFR, CPT)
together with insurance against risks in transit (CIF, CIP) CFR versus CIF?
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
Required document’s Seller’s • Commercial invoice primary duty • Usual document • Deliver the evidencing delivery goods at the named point and of goods to the carrier also load goods • Export license if necessary on buyer’s collecting Optional documents vehicle •Other documents (changed from needed for export or 1990) transit of the goods through any country or for import clearance
A
B
Buyer’s primary duty • Nominate carrier • Contract for carriage, refer clause (A3a) – ICC Guide to Incoterms 2000 • Buyer has to unload the vehicle (changed from 1990)
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
A
Seller’s primary duty • Provide evidence of delivery of goods to the carrier • Arrange export clearance
FCA
Group F: main carriage not paid by seller Free Carrier (…named place)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods have been delivered to the carrier at the named place • Carriage to be arranged by the buyer or by the seller on the buyer’s behalf
FAS
Group F: main carriage not paid by seller Free Alongside Ship (…named port of shipment)
Required Seller’s document’s primary duty • Commercial invoice • Deliver the • Customary clean goods alongside receipt the ship • Export license if • Provide an necessary alongside receipt Optional documents • Arrange • export clearance Other documents needed for export or (changed from transit of the goods 1990) through any country or for import clearance
A
B
Buyer’s primary duty • Nominate carrier • Contract for carriage
FAS
Group F: main carriage not paid by seller Free Alongside Ship (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods have been placed alongside the ship • Carriage to be arranged by the buyer
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
Only to be used when: • when maritime transport will take place • when goods are to be lifted across a ship’s rail • tendered to the ship in hoses for liquid cargo • filled form silos when the cargo is to be carried loose in bulk • If not above, instead use FCA, thereby indicating the actual place where goods are handed over for carriage
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
A
Seller’s primary duty • Deliver the goods on board • Provide a clean on board receipt • Pay loading costs not included in the freight •Arrange export clearance
Required document’s • Commercial invoice • Customary clean receipt • Export license if necessary Optional documents •Other documents needed for export or transit of the goods through any country or for import clearance
B
Buyer’s primary duty • Nominate carrier • Contract for carriage • Pay unloading costs
FOB
Group F: main carriage not paid by seller Free on Board (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to the buyer when the goods pass the ship’s rail •Carriage to be arranged by the buyer
CFR
Group C: main carriage paid by seller Cost and Freight (…named port of destination) A Seller’s Required primary duty Buyer’s document’s • Contract for primary duty • Commercial invoice carriage • Accept delivery of • Transport document •Deliver the goods the goods upon on board • Export license if shipment • Provide a clean necessary transport document • Receive the goods (Bill of Lading / Sea Optional documents from the carrier Waybill) •Other documents • Pay such costs as •Arrange export needed for export or are not for the clearance transit of the goods seller’s account • Pay unloading costs through any country under the contract of if for his account under the contract of or for import carriage clearance carriage
B
CFR
Group C: main carriage paid by seller Cost and Freight (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods pass the ship’s rail • Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost, Insurance and Freight (…named port of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for • Transport document carriage and • Export license if insurance necessary •Deliver the goods on board • Insurance policy • Provide a clean (Certificate) transport document (Bill of Lading / Sea Optional documents Waybill) and a cargo •Other documents insurance policy or needed for export or certificate transit of the goods through any country or for import clearance
A
B
Buyer’s primary duty • Accept delivery of the goods upon shipment • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost, insurance and freight (…named port of destination)
CONTINUED…
A
Seller’s primary duty • Arrange export clearance • Pay loading costs • Pay unloading costs if for his account under the contract of carriage
CIF
Group C: main carriage paid by seller Cost Insurance and Freight (…named port of destination)
Critical Points:
• Carriage and Insurance to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods pass the ship’s rail • Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for • Transport document carriage • Export license if •Deliver the necessary goods to the Optional documents (first) carrier • Provide a clean •Other documents needed for export or transport document (Bill of transit of the goods through any country Lading / Sea or for import Waybill) clearance
A
B
Buyer’s primary duty • Accept delivery of the goods when they have been delivered to the carrier • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
CONTINUED…
A
Seller’s primary duty • Pay unloading costs if for his account under the contract of carriage • Pay loading costs •Arrange export clearance
CPT
Group C: main carriage paid by seller Carriage paid to (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered to the carrier •Cost transfer at port of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
Required Seller’s document’s primary duty • Commercial invoice • Contract for the • Transport document carriage and • Export license if Insurance necessary •Deliver the • Insurance Policy goods to the (Certificate) (first) carrier • Provide a clean Optional documents •Other documents transport document (Bill of needed for export or transit of the goods Lading / Sea through any country Waybill) or for import clearance
A
B
Buyer’s primary duty • Accept delivery of the goods when they have been delivered to the carrier • Receive the goods from the carrier • Pay such costs as are not for the seller’s account under the contract of carriage
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
CONTINUED…
A
Seller’s primary duty • Pay unloading costs if for his account under the contract of carriage • Pay loading costs •Arrange export clearance
CIP
Group C: main carriage paid by seller Carriage and Insurance paid to (…named place of destination)
Critical Points:
• Carriage and Insurance to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered to the carrier • Cost transfer at place of destination, buyer paying such costs as are not for the seller’s account under the contract of carriage
The seller’s maximum obligation to deliver the goods at destination (DAF, DES, DEQ, DDU or DDP)
DAF
Group D: arrival Delivered at Frontier (…named place)
Required Seller’s document’s primary duty • Commercial invoice •Deliver the goods at • Transport document the named frontier or warehouse warrant • Provide a document to enable Optional documents the buyer to take • Through transport delivery at the frontier or assist him document to obtain a through •Other documents transport document needed for export or •Arrange export transit of the goods clearance through any country or for import clearance
A
B
Buyer’s primary duty • Take delivery of the goods at the named frontier or assume responsibility for oncarriage • Arrange import clearance
DAF
Group D: arrival Delivered at Frontier (…named place)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods have been delivered at the frontier • Cost transfer from the seller to the buyer when the goods have been delivered at the frontier
DES
Group D: arrival Delivered ex ship (…named port of destination)
A
Seller’s primary duty •Deliver the goods on board the ship at the Port of destination • Provide a document to enable the buyer to take delivery from the ship (Bill of Lading or delivery order) •Arrange export clearance
Required document’s • Commercial invoice • Bill of Lading or delivery order Optional documents •Other documents needed for transit of the goods through any country or for import clearance
B
Buyer’s primary duty • Take delivery of the goods from the ship at the Port of destination •Arrange import clearance
DES
Group D: arrival Delivered ex ship (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship • Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship
DEQ
Group D: arrival Delivered ex Quay (…named port of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods primary duty • Commercial on the quay at the • Take delivery of invoice Port of destination the goods from the • Provide a • Bill of Lading or ship at the Port of document to enable delivery order the buyer to take destination Optional documents delivery from the •Arrange import quay (Bill of Lading •Other documents clearance (changed or delivery order) needed for transit of from 1990) •Arrange export the goods through clearance
B
any country or for import clearance
DEQ
Group D: arrival Delivered ex Quay (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship • Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship
DDU
Group D: arrival Delivered duty unpaid (…named place of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods at primary duty • Commercial the named place of • Take delivery of invoice destination • Provide a •Document needed to the goods from the named place of document to enable take delivery the buyer to take destination Optional documents delivery •Arrange import •Other documents •Arrange export clearance clearance needed for transit of
B
the goods through any country or for import clearance
DDU
Group D: arrival Delivered duty unpaid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer •Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer
DDP
Group D: arrival Delivered duty paid (…named place of destination) A Seller’s Required primary duty Buyer’s document’s •Deliver the goods at primary duty • Commercial the named place of • Take delivery of invoice destination • Provide a •Document needed to the goods from the named place of document to enable take delivery the buyer to take destination • Import license, if delivery necessary •Arrange export clearance
B
DDP
Group D: arrival Delivered duty paid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller • Risk transfer from the seller to the buyer when the goods are placed at the disposal of the buyer •Cost transfer from the seller to the buyer when the goods are placed at the disposal of the buyer
Now which one is appropriate? • Commercial practice and the type of goods will dictate whether - the seller should refrain from undertaking additional obligations - the seller is prepared to do more than make the goods available to the buyer at the seller’s premises - the buyer’s bargaining position allows him to require the seller to undertake additional obligations the seller is able to undertake additional obligations , and in particular, to quote a more competitive price by extending his obligations
Now which one is appropriate? • Commercial practice and the type of goods will also dictate whether - it is necessary to use the maritime terms FAS, FOB, CFR or CIF when the goods are intended to be resold before they reach their destination - But …. in the case of manufactured goods (containerized), it is more appropriate to use FCA, CPT or CIF and not FAS, FOB, CFR or CIF - Manufactured goods will rarely be picked out of the ship by the buyer/quay(DES, DEQ) but rather delivered in cargo terminal, therefore DDU, DDP will be more appropriate
Thank you
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