Definition of ‘Incoterms’
Trade terms published by the International Chamber of Commerce (ICC) that are commonly used in both international and domestic trade contracts. Incoterms, short for “International Commercial Terms,” are used to make international trade easier by helping traders in different countries understand one another. Incoterms were first developed in 1936 and are updated from time to time, in order to conform to current trade practices. Because of these updates, contracts should specify which version of Incoterms they are using (e.g., Incoterms 2010).
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INCOTERMS®2010 |
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Rules for any mode or modes of transport |
Rules for sea and inland waterway transport |
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EXW |
FCA |
CPT |
CIP |
DAT |
DAP |
DDP |
FAS |
FOB |
CFR |
CIF |
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Ex Works |
Free |
Carriage |
Carriage & |
Delivered at |
Delivered |
Delivered |
Free |
Free on |
Cost & |
Cost, |
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Insurance |
Alongside |
Insurance |
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Carrier |
Paid To |
Terminal |
at Place |
Duty Paid |
Board |
Freight |
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Paid To |
Ship |
& Freight |
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SERVICES |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
Who Pays |
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Export Packing |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
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Marking & Labeling |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
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Block and Brace |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
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Export Clearance (License, |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
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EEI/AES) |
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Freight Forwarder |
Buyer |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Seller |
Seller |
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Documentation Fees |
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Inland Freight to Main Carrier |
Buyer |
2 |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
Seller |
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Origin Terminal Charges |
Buyer |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Seller |
Seller |
Seller |
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Vessel Loading Charges |
Buyer |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Seller |
Seller |
Seller |
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Ocean Freight / Air Freight |
Buyer |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Seller |
Seller |
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Nominate Export Forwarder |
Buyer |
Buyer |
Seller |
Seller |
Seller |
Seller |
Seller |
Buyer |
Buyer |
Seller |
Seller |
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Marine Insurance |
3 |
3 |
3 |
Seller |
3 |
3 |
3 |
3 |
3 |
3 |
Seller |
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Unload Main Carrier Charges |
Buyer |
Buyer |
4 |
4 |
Seller |
Seller |
Seller |
Buyer |
Buyer |
4 |
4 |
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Destination Terminal Charges |
Buyer |
Buyer |
4 |
4 |
4 |
Seller |
Seller |
Buyer |
Buyer |
4 |
4 |
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Nominate On-Carrier |
Buyer |
Buyer |
5 |
5 |
5 |
5 |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
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Security Information |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
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Requirements |
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Customs Broker Clearance |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
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Fees |
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Duty, Customs Fees, Taxes |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
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Delivery to Buyer Destination |
Buyer |
Buyer |
5 |
5 |
5 |
5 |
Seller |
Buyer |
Buyer |
Buyer |
Buyer |
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Delivering Carrier Unloading |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
Buyer |
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Notes:
1 – Incoterms® 2010 do not deal with the parties’ obligations for
stowage within a container and therefore, where relevant, the parties
should deal with this in the sales contract.
2 – FCA Seller’s Facility – Buyer pays inland freight; other FCA
qualifiers. Seller arranges and loads pre-carriage carrier and pays
inland freight to the “F” delivery place
3 – Incoterms® 2010 does not obligate the buyer nor must the seller to
insure the goods, therefore this issue be addressed elsewhere in the
sales contract.
4 – Charges paid by Buyer or Seller depending on contract of carriage.
5 – Charges paid by Seller if through Bill of Lading or door-to-door rate to Buyer’s destination
INCOTERMS® IS A REGISTERED TRADEMARK OF THE INTERNATIONAL CHAMBER OF COMMERCE. THIS DOCUMENT IS NOT INTENDED AS LEGAL ADVICE BUT IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY. USERS SHOULD SEEK SPECIFIC GUIDANCE FROM INCOTERMS® 2010 AVAILABLE THROUGH THE INTERNATIONAL CHAMBER OF COMMERCE AT WWW.ICCBOOKS.COM