The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). Incoterms provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. The new Incoterms rules were revised by the International Chamber of During the process of revision, which has taken about two years, ICC has done its.

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The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination. Retrieved October 13, Remember Me Sign in.

The seller must also turn over documents necessary, to obtain the goods from the carrier or to assert claim against an insurer to the buyer. No risk or responsibility is transferred to the buyer until delivery of the goods at the named place of destination. The desire of the parties should be expressed clearly and casual adoption should be refrained.

Security-related clearances and information required for such clearances There is heightened concern nowadays about security in the movement of goods, requiring verification that the goods do not pose a threat to life or property for reasons other than their inherent nature.


Seller arranges and pays cost and freight to the named destination port. The carriage costs will sometimes include the costs of handling and moving the goods within port or container terminal facilities and the carrier or terminal operator may well charge these costs to the buyer who receives the goods.

The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover.

Seller delivers goods and risk passes to buyer when on board the vessel. They can be used even when there is no maritime transport at all. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, fci, and risks associated with the transportation and delivery of goods.


These extracts can be reproduced provided that the source is cited and a link to the ICC Store is mentioned. Under FOB terms the seller bears all costs and cdi up to the point the goods are loaded on board the vessel. Unless the rules and regulations in the buyer’s country are very well understood, DDP terms can be a very big risk both in terms of delays and in unforeseen extra costs, and should be used with caution.

However, it is important to note that any delay or demurrage charges at the terminal will generally be for the seller’s account. Classification according to the increased level of obligations for the seller.

Incoterms┬« rules – ICC – International Chamber of Commerce

In other projects Wikimedia Commons. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. More information available on the dedicated page. The seller is not responsible for unloading.

Seller bears cost, risk and responsibility until goods are unloaded delivered at named quay, warehouse, yard, or terminal at destination. No risk or responsibility is transferred to the buyer until delivery of the goods at the named place of destination. It is important to note that these terms are generally not suitable for shipments in shipping containers; the point at which risk and responsibility for the goods passes is when the goods are loaded on board the ship, and if the goods are sealed into a shipping container it is impossible to verify the condition of the goods at this point.

Under DAP terms, the risk passes from seller to buyer from the point of destination mentioned in the contract of delivery.

Distribution of costs according to the Incoterm negotiated in the contract. This term should be used only for non-containerized seafreight and inland waterway transport.

Retrieved December 13, On the other hand, the buyer pays cost of marine freight transportation, bill of lading fees, insurance, unloading and incooterms cost from the incoterme port to destination. Freight transport International incotrrms law. After arrival of the goods in the country of destination, the customs clearance in the importing country needs to be completed by the buyer, e.

The passing of risk occurs at the frontier. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade. The goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer. Who covers the logistics charges? Retrieved May 16, EXW means that a buyer incurs the risks for bringing the goods to their final destination.



The seller delivers the goods, cleared for export, at a named place possibly including the seller’s own premises. DAT – Delivered at Terminal: While the freight is paid by the seller, it is actually paid for by the buyer as freight costs are normally included by the seller in the total selling price.

By using this site, you agree to the Terms of Use and Privacy Policy. However, FOB is commonly used incorrectly for all modes of transport despite the contractual risks that this can introduce. In the prior version, the rules were divided into four categories, but the 11 pre-defined terms of Incoterms are subdivided into two categories based only on method of delivery.

This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. This term is broadly similar to the above CPT term, with the exception that the seller is required to obtain insurance for the goods while in transit.

The seller bears all risks involved in bringing the goods to the named place. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to incotwrms its own extra insurance arrangements.