International Commercial Terms (Incoterms)
- a codification of international rules for the uniform interpretation of common
contract clauses in export/import transactions developed and issued by the
International Chamber of Commerce (ICC).
The thirteen Incoterms are:
The CFR term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the CPT term is more appropriate to use.
The buyer should note that under the CIF term the seller is only required to obtain insurance on minimum coverage. The CIF term requires the seller to clear the goods for export. This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purposes such as in the case of roll-on/ roll-off or container traffic, the CIP term is more appropriate to use.
The buyer should note that under the CIP term the seller is only required to obtain insurance on minimum coverage. The CIP term requires the seller to clear the goods for export. This term may be used for any mode of transport including multimodal transport.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of' carriage, by rail, road, sea, air, inland waterway or by a combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier.
The CPT term requires the seller to clear the goods for export.
This term may be used for any mode of transport including multimodal transport.
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax (VAT)), this should be made clear by adding words to this effect: "Delivered duty paid, VAT unpaid (...named place of destination)".
This term may be used irrespective of the mode of transport.
If the parties wish the seller to carry out customs formalities and bear the costs and risks resulting therefrom, this has to be made clear by adding words to this effect.
If the parties wish to include in the seller's obligations some of the costs payable upon importation of the goods (such as value added tax (VAT)), this should be made clear by adding words to this effect: "Delivered duty unpaid, VAT paid, (... named place of destination)".
This term may be used irrespective of the mode of transport.
This term should not be used if the seller is unable directly or indirectly to obtain the import license.
If the parties wish the buyer to clear the goods for importation and pay the duty the words duty unpaid, should be used instead of "duty paid".
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax (VAT)), this should be made clear by adding words to this effect: "Delivered ex quay, VAT unpaid (... named port of destination)".
This term can only be used for sea or inland waterway transport.
This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the buyer to clear the goods for export. It should not be used when the buyer cannot carry out directly or indirectly the export formalities.
This term can only be used for sea or inland waterway transport.
This term may be used for any mode of transport, including multimodal transport.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. If the buyer instructs the seller to deliver the cargo to a person, e.g. a freight forwarder who is not a "carrier", the seller is deemed to have fulfilled his obligation to deliver the goods when they are in the custody of that person.
"Transport terminal", means a railway terminal, a freight station, a container terminal or yard, a multi-purpose cargo terminal or any similar receiving point.
"Container" includes any equipment used to unitize cargo, e.g. all types of containers and/or flats, whether ISO accepted or not, trailers, swap bodies, ro-ro equipment, igloos, and applies to all modes of transport.
The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport. When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the FCA term is more appropriate to use.
Suitable for Any Mode of Transport including Multimodal:
Suitable for Air Transport:
Suitable for Rail Transport:
Suitable for Sea and Inland Waterway Transport: