1. INCOTERMS 2010 by the International Chamber of Commerce
International Business Transactions SSL MSG IB 2013/2014
Monika Grottel PhD

2. INCOTERMS 2010 What the ICC is? INCOTERMS – what does it mean?
The history of INCOTERMS
How to use the INCOTERMS?
Main features of INCOTERMS rules
Rules for any mode(s) of transport
Rules for sea and inland waterway transport

3. Customs, habits, rules?

4. Is it law, regulation or optional convention?
THE RULE
Is it law, regulation or optional convention?

5. THE RULE
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6. What the ICC is? The International Chamber of Commerce (ICC)
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7. INCOTERMS what does it mean?
International Commercial Terms
a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC)
widely used in international commercial transactions

8. INCOTERMS what does it mean?
a set of three-letters trade terms reflecting bussiness –to-bussines practice in contracts for the sale of goods
the Incoterms rules describe mainly the tasks, costs and risks involved in the delivery of goods from sellers to buyers

9. The history of INCOTERMS
1921 – ……………………………………
1936 – ……………………………………
1953 – …………………………………….
1967, 1976, 1980, 1990, 2000 – ………….
January 1, 2011 – Incoterms 2010…………………………………………

10. How to use the INCOTERMS?
„CIF Hamburg, Incoterms 2010”
„FCA 38 Cours Albert1er, Paris, France Incoterms 2010”

11. How to chose the appropriate INCOTERMS rule?
The chosen Incoterms rule has to be appropriate:
to the goods,
to the means of their transport
to whether the parties intend to put additional obligations, such as obligation to organize carriage or insurance, on the seller or on the buyer

12. How to use the INCOTERMS?
Remember that Incoterms rules dont give you a complete contract of sale!

13. INCOTERMS rules do say!

14. INCOTERMS rules say nothing about!

15. Main features of INCOTERMS rules
The 11 Incoterms rules are presented in two classes:
rules for any modes of transport
rules for sea and inland waterway transport

16. Main features of INCOTERMS rules
Incoterms rules have been used in international sale contracts, where goods pass across national borders
in various areas of the world trade blocs have made border formalities between different countries less significant

17. Main features of INCOTERMS rules
traders use Incoterms rules for domestic sale contracts
in the USA in domestic trade Incoterms are used rather than the former Uniform Commercial Code shipment and delivery terms

18. Main features of INCOTERMS rules
Guidance Notes
before each Incoterms rule you will find a Guidance Note
Guidance Notes explain the fundamentals of each Incoterms rule: when it should be used, when risk passes, how costs are allocated between seller and buyer

19. Variants of INCOTERMS rules
Can we alter an Incoterms rule?

20. Terms used in the INCOTERMS 2010
CARRIER –
CUSTOMS FORMALITIES –
DELIVERY –
DELIVERY DOCUMENT –
PACKAGING –

21. Rules for any mode(s) of transport
EXW
FCA
CPT
CIP
DAT
DAP
DDP

22. EXW Ex Works (named place of delivery)
the seller delivers, when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (works, factory, warehouse..)
represents the minimum obligation for the seller

24. EXW
the seller’s obligations

25. EXW
the buyer’s obligations

26. FCA Free Carrier (named place of delivery)
the seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place
the seller pays for carriage to the named point of delivery
risk passes when the goods are handed over to the first carrier

28. FCA
the seller’s obligations

29. FCA
the buyer’s obligations

30. CPT Carriage Paid To (named place of destination)
the seller pays for carriage
risk transfers to buyer upon handing goods over to the first carrier and NOT when the goods reach the place of destination

32. CPT
the seller’s obligations

33. CPT
the buyer’s obligations

34. CIP Carriage and Insurance Paid To (named place of destination)
seller pays for carriage and insurance to the named destination point
seller contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage

35. CIP seller is required to obtain insurance only on minimum cover
risk passes when the goods are handed over to the first carrier

37. CIP
the seller’s obligations

38. CIP
the buyer’s obligations

39. DAT
Delivered At Terminal (named terminal at port or place of destination)
seller delivers when the goods are unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal of destination

40. DAT
seller pays for carriage to the terminal, except for costs related to import clearance
seller assumes all risks up to the point that the goods are unloaded at the terminal

44. DAT
the seller’s obligations

45. DAT
the buyer’s obligations

46. DAP Delivered at Place (named place of destination)
seller delivers when the goods are on the arriving means of transport, ready for unloading at a named place of destination
seller pays for carriage to the named place, except for costs related to import clearance,
seller assumes all risks prior to the point that the goods are ready for unloading by the buyer

48. DAP
the seller’s obligations

49. DAP
the buyer’s obligations

50. DDP Delivered Duty Paid (named place of destination)
seller is responsible for delivering the goods to the named place in the country of the buyer
seller pays all costs in bringing the goods to the destination including import duties and taxes
DDP places maximum obligations on the seller and minimum obligations on the buyer

53. DDP
the seller’s obligations

54. DDP
the buyer’s obligations

55. Rules for sea and inland waterway transport
FAS
FOB
CFR
CIF

56. FAS Free Alongside Ship (named port of shipment)
seller must place the goods alongside the ship at the named port and clear the goods for export
suitable only for maritime transport but NOT for multimodal sea transport in containers
is typically used for heavy-lift or bulk cargo

58. FAS
the seller’s obligations

59. FAS
the buyer’s obligations

60. FOB Free on Board (named port of shipment)
seller must load the goods on board the vessel nominated by the buyer
cost and risk are passes when the goods are actually on board of the vessel (this rule is new!) and the buyer bears all costs from that moment
the seller must clear the goods for export

62. FOB
the seller’s obligations

63. FOB
the buyer’s obligations

64. CFR Coast and Freight (named port of destination)
seller must pay the costs and freight to bring the goods to the port of destination
risk is transferred to the buyer once the goods are loaded on the vessel!!
maritime transport only and insurance for the goods is NOT included.

66. CFR
the seller’s obligations

67. CFR
the buyer’s obligations

68. CIF Cost Insurance and Freight (named port of destination)
the same as CFR except that the seller must in addition procure and pay for the insurance
maritime transport only

70. How to use the INCOTERMS?
EXW, FCA, DAT, DAP, DDP, FAS, FOB – the named place is the place where delivery takes place and where risk passes from the seller to the buyer
CPT, CIP, CFR, CIF – the named place differs from the place of delivery. The named place is the place of destination to which carriage is paid

71. How to use the INCOTERMS?
is a registered trademark of the ICC, registered in several countries

73. INCOTERMS 2010