C7- 1 Learning Objectives The students should master the concepts of Incoterms 2000; trade terms; FOB;CIF; CFR [Important and Difficult Points] the differences among FOB; CIF; CFR; obligation of the seller and the buyer. Chapter 7 Trade Terms

C7- 2 Part A Components of trade terms and Incoterms 2000 A price term consists of type of currency, price per unit, measurement unit and trade terms. e.g $ 100 per dozen CIF New York. Chapter 7 Trade Terms

C7- 3 Part A Components of trade terms and Incoterms 2000 $----type of currency: quoted in the buyer’s, the seller’s and the third currency; hard currency should be chosen for exports and soft currency for imports. Chapter 7 Trade Terms

C7- 4 Part A Components of trade terms and Incoterms price per unit: various costs getting the goods from the warehouse in his own country to the buyer’s premises include purchasing cost of goods, packing expenses, warehousing, commodity inspection fee, export tariffs and entry fees, agent’s commissions. In some cases, ocean freight and insurance premiums should be taken into account. Chapter 7 Trade Terms

C7- 5 Part A Components of trade terms and Incoterms 2000 Per dozen---measurement unit should be taken into account. mentioned because many countries use different systems of measures & weight (page.93). Chapter 7 Trade Terms

C7- 6 Part A Components of trade terms and Incoterms 2000 CIF New York---- trade terms: are short terms and abbreviations which are used to explain the price composition, to define the methods of delivery of the goods sold, to indicate which Chapter 7 Trade Terms

C7- 7 Part A Components of trade terms and Incoterms 2000 party bear the freight, insurance and other relevant, and assume the liability in case damage or loss of the goods occurs. Chapter 7 Trade Terms

C7- 8 Components of trade terms and Incoterms 2000 Incoterms 2000: (International Rules for the Interpretation of Trade Terms) to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade to eliminate the uncertainties of different interpretations of such terms in different countries; In order to remedy misunderstandings, disputes and litigation, Chapter 7 Trade Terms

C7- 9 Part A Components of trade terms and Incoterms 2000 the international Charmer of Commerce first published in Amendments and additions were later made in 1953, 1967, 1976, 1980 and presently 1990 in order to bring the rules in line with current international trade practices; In Incoterms 1990, 2000,the terms have been grouped into E.F.C.D(see page.117). Chapter 7 Trade Terms

C7- 10 Part A Components of trade terms and Incoterms 2000 Under all terms, the respective obligations of the parties have been grouped under 10 heading where each heading on the seller’s side “mirrors” the position of the buyer with respect to the same subject matter. Chapter 7 Trade Terms

C FOB Free on Board (……named port of shipment)means the seller deliver the goods on board the vessel at the named port of shipment; has to bear all costs and risks of loss or damage to goods before the ship’s rail; clear the goods for export; the term can only be used for sea or inland waterway transport. Chapter 7 Trade Terms

C FOB: the obligation of the seller and the buyer Delivery: Seller: delivery the goods on board the vessel at the named port of shipment on the date or within the period stipulated and notice the buyer in time ①. Chapter 7 Trade Terms

C FOB: Buyer: charter and book space and notice the seller the ship’s name and so on in time ② ; pay the freight Risk: Seller: bear all costs and risks of loss or damage to goods before the ship’s rail ③. Buyer: after Chapter 7 Trade Terms

C FOB: Customs’ formalities Seller: obtain at his own risk and expense any export license or other official authorization and carry out all customs formalities. Buyer: import Chapter 7 Trade Terms

C FOB: Documents: Seller: provide the commercial invoice; proof of delivery; transport document or equivalent electronic message Buyer: accept the documents line with the contract and pay the price Chapter 7 Trade Terms

C CIF cost, insurance and freight(… named port of destination) the seller must pay the freight to bring the goods to the named port of destination and obtain cargo insurance. Chapter 7 Trade Terms

C CIF the obligation of the seller and the buyer Delivery S; risk; customs’ formalities and documents: the same above; except the freight and insurance: see above Chapter 7 Trade Terms

C CFR cost and freight(… named port of destination)the same of CIF except insurance Chapter 7 Trade Terms

C7- 19 Exercises Translate the following Trade Terms in contracts ①每公吨 100 美元 CIF 上海包括 2% 佣金； ②每箱人民币 25 元 FOB 新加坡，减 1% 折扣； ③在信用证规定的交货期内，提交规定的装船 单据后，信用证允许支付 CIF 价格的 100%; ④在 FOB 合同条件下，货物装运后由买方负责 投保；在 CIF 合同条件下，卖方应负责按发 票值的 110% 投 “ 一切险 ” 。 Chapter 7 Trade Terms

C7- 20 This is the last slide in Chapter 7. Chapter 7 Trade Terms