Incoterms 2000, International Chamber of Commerce official rules for the interpretation of trade terms.


incopic.jpg (6417 bytes)

Below listed mode of transport terms will be explained:
CFR Cost and Freight (named port of destination)
CIF Cost, insurance and freight (named port of destination)
CIP Carriage and insurance paid to (named place of destination)
CPT Carriage paid to (named place of destination)
DAF Delivery at frontier (named place)
DDP Delivered duty paid (named place of destination)
DDU Delivery duty paid (named place of destination)
DEQ Delivered ex quay (named port of destination)
DES Delivered ex-ship (named port of destination)
EXW Ex works (named place)
FAS Free alongside ship (named port of shipment)
FCA Free carrier (named place)
FOB Free on board (name port of shipment)

Each of those terms will be described in the next pages as well as the seller’s
and buyer’s obligations under those terms.

DAF, Delivered at frontier

"Delivered at frontier" means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport not unloaded, cleared for export, but not cleared for import at the named point and place at the frontier, but before the customs border of the adjoining country. The term "frontier" may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term.

However, if the parties wish the seller to be responsible for the unloading of the goods from the arriving means of transport and to bear the risks and costs of unloading, this should be made clear by adding explicit wording to this effect in the contract of sale.

This term may be used irrespective of the mode of transport when good are to be delivered at a land frontier. When delivery is to take place in the port of destination, on board a vessel or on the quay (wharf), the DES or DEQ terms should be used.

incotop.jpg (3773 bytes)
A The seller’s obligations B The buyer’s obligations  
A1 Provision of goods in conformity with the contract B1 Payment of the price incotop.jpg (3773 bytes)
  The seller must provide the goods and the commercial invoice or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity, which may be required by the contract.   The buyer must pay the price as provided in the contract of sale.  
A2 Licences, authorisations and formalities B2 Licences, authorisations and formalities incotop.jpg (3773 bytes)
  The seller must obtain at his own risk and expense any export licence or other official document necessary for placing the goods at the buyer’s disposal.

The seller must carry out, where applicable, all customs formalities necessary for the export of the goods to the named place of delivery at the frontier and for their transit through any country.

  The buyer must obtain at his own risk and expense any import licence or other official authorisation or other documents and carry out, where applicable, all customs formalities necessary for the import of the goods, and for their subsequent transport.  
A3 Contracts of carriage and insurance B3 Contract of carriage and insurance. incotop.jpg (3773 bytes)
 
  1. contract of carriage

The seller must contract at his own expense for the carriage of the gods to the named point, if any, at the place of delivery at the frontier. If a point at the named place of delivery at the frontier is not agreed or is not determined by practice, the seller may select the point at the named place of delivery which best suits his purpose.

However, if requested by the buyer, the seller may agree to contract on usual terms at the buyer’s risk and expense for the on-going carriage of the goods beyond the named place at the frontier to the final destination in the country of import named by the buyer. The seller may decline to make the contract and, if he does, shall promptly notify the buyer accordingly.

Contract of insurance.

No obligation.

 
  1. Contract of carriage.

No obligation.

  1. Contract of insurance.

No obligation.

 
A4 Delivery B4 Taking delivery incotop.jpg (3773 bytes)
  The seller must place the goods at the disposal of the buyer on the arriving means of transport not unloaded at the named place of delivery at the frontier on the date or within the agreed period.   The buyer must take delivery of the goods when they have been delivered in accordance with A4.  
A5 Transfer of risks B5 Transfer of risks incotop.jpg (3773 bytes)
  The seller must, subject to the provisions of B5, bear all risks of loss of or damage to the goods until such time as they have been delivered in accordance with A4.   The buyer must bear all risks of loss of or damage to the goods form the time they have been delivered in accordance with A4.

The buyer must, should he fail to give notice in accordance with B7, bear all risks of loss of or damage to the goods from the agreed date or the expiry date of the agreed period for delivery to the contract, that is to say, clearly set aside or otherwise identified as the contract goods.

 
A6 Division of costs B6 Division of costs incotop.jpg (3773 bytes)
  The seller must, subject to the provisions of B6, pay

In addition to the costs resulting from A3 a), all costs relating to the goods until such time as they have been delivered in accordance with A4, and

Where applicable, the costs of customs formalities necessary for export as well as all duties, taxes, or other charges payable upon export of the goods and for their transit through any country prior to delivery in accordance with A4.

  The buyer must pay

All costs relating to the goods from the time they have been delivered in accordance with A4, including the expenses of unloading necessary to take delivery of the goods from the arriving means of transport at the named place of delivery at the frontier, and

All additional costs incurred if he fails to take delivery of the goods from the arriving means of transport at the named place of delivery at the frontier; and

Where applicable, the cost of customs formalities as well as all duties, taxes and other charges payable upon import of the goods and for their subsequent transport.

 
A7 Notice to the buyer B7 Notice to the seller incotop.jpg (3773 bytes)
  The seller must five the buyer sufficient notice of the dispatch of the goods to the named place at the frontier as well as any other notice required in order to allow the buyer to take measures which are normally necessary to enable him to take delivery of the goods.   The buyer must, whenever he is entitled to determine the time within an agreed period and/or the point of taking delivery at the named place, give the seller sufficient notice thereof.  
A8 Proof of delivery, transport document or equivalent electronic message B8 Proof of delivery, transport document or equivalent electronic message. incotop.jpg (3773 bytes)
  The seller must provide the buyer at the seller’s expense with the usual document or other evidence of the delivery of the goods at the named place at the frontier in accordance with A3.

The seller must, should the parties agree on on-going carriage beyond the frontier in accordance with A3 a) provide the buyer at the latter’s request, risk and expense, with the through document of transport normally obtained in the country of dispatch covering on usual terms the transport of the goods from the point of dispatch in that country to the place of final destination in the country of import named by the buyer.

Where the seller and the buyer have agreed to communicate electronically, the document referred to in the preceding paragraph may be replaced by an equivalent electronic data interchange (EDI) message.

  The buyer must accept the transport document and/or other evidence of delivery in accordance with A8.  
A9 Checking – packaging – marking B9 Inspection of goods incotop.jpg (3773 bytes)
  The seller must pay the costs of those checking operations (such as checking quality, measuring, weighing, counting) which are necessary for the purpose of delivering the goods in accordance with A4.

The seller must provide at his own expense packaging (unless it is agreed or usual for the particular trade to deliver the goods of the contract description unpacked) which is required for the delivery of the goods at the frontier and for the subsequent transport to the extent that the circumstances (for example modalities, destination) are made known to the seller before the contract of sale is concluded. Packaging is to be marked appropriately.

  The buyer must pay the costs of any pre-shipment inspection except when such inspection is mandated by the authorities of the country of export.  
A10 Other obligations B10 Other obligations incotop.jpg (3773 bytes)
  The seller must render the buyer at the latter’s request, risk and expense, every assistance in obtaining any documents or equivalent electronic messages (other than those mentioned in A8) issued or transmitted in the country of dispatch and/or origin which the buyer may require for the import of the goods and, where necessary, for their transit through any country.

The seller must provide the buyer, upon request, with the necessary information for procuring insurance.

  The buyer must pay all costs and charges incurred in obtaining the documents or equivalent electronic messages mentioned in A10 and reimburse those incurred by the seller in rendering his assistance in accordance therewith.

If necessary, according to A3 a), the buyer must provide the seller at his request and the buyer’s risk and expense with the exchange control authorisation, permits, other documents or certified copies thereof, or with the address of the final destination of the goods in the country of import for the purpose of obtaining the through document of transport or any other document contemplated in A8.