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


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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.

DES, Delivered ex ship

"Delivered ex ship" means that the seller delivers when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the named port of destination. The seller ahs to bear all the costs and risks involved in bringing the goods to the named port of destination before discharging. If the parties wish the seller to bear the costs and risks of discharging the goods, then the DEQ terms should be used.

This term can be used only when the goods are to be delivered by sea or inland waterway or multimodal transport on a vessel in the port of destination.

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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 his own risk and expense any export licence or other official authorisation or other documents and carry out where applicable, all customs formalities necessary for the export of the goods and for their transit through any country.   The buyer must obtain at his own risk and expense any import licence or other official authorisation and carry out, where applicable, all customs formalities necessary for the import of the goods.  
A3 Contract of carriage and insurance B3 Contracts 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 goods to the named point, if any, at the named port of destination. If a point is not agreed or is not determined by practice, the seller may select the point at the named port of destination which best suits his purpose.

  1. 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 board the vessel at the unloading port of destination on the date or within the agreed period, in such a way as to enable them to be removed from the vessel by unloading equipment appropriate to the nature of the goods.   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 from 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 provided, however, that the goods have been duly appropriated 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 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 whit A4, including the expenses of discharge operations necessary to take delivery of the goods from the vessel; and

All additional costs incurred if he fails to take delivery of the goods when they have been placed at his disposal in accordance with A4, or to give notice in accordance with B7, provided, however, that the goods have been appropriated t the contract, that is to say, clearly set aside or otherwise identified as the contract goods.

Where applicable, the costs of customs formalities as well as all duties, taxes and other charges payable upon import of the goods.

 
A7 Notice to the buyer. B7 Notice to the seller incotop.jpg (3773 bytes)
  The seller must give the buyer sufficient notice of the estimated time of arrival of the nominated vessel in accordance with A4 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 in the named port of destination, 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 delivery order and/or the usual transport document (for example a negotiable bill of lading, an on-negotiable sea-waybill, an inland waterway document, or a multimodal transport document) to enable the buyer to claim the goods from he carrier at the port of destination.

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 delivery order or the transport document 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 usual for the particular trade to deliver the goods of the contract description unpacked) which is required for the delivery of the goods. 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 of origin which the buyer may require for the import of the goods.

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.