INCOTERMS (International commercial terms) 2

INCOTERMS (part 2)
by: Jose G Echeverry.

continue from INCOTERMS (part 1)

GROUP C
the seller arranges and pays for the main carriage but do NOT assume risk

CFR: Cost And Freight- the seller must contract and pay for the carriage of the goods to the prt of destination, obtain and pay for the BL for the goods, prepare and pack the goods as required, assume the cost of the documents required for the export and costs in case of delay at the port of shipment; the buyer must assume all risks of the goods from the time the goods have passed the ship´s rail at the port of shipment, bear the costs of documents such as consular/certified invoice (do not assume costs for BL), assume the loading/unloading costs at the destination port as well as all future expences such as customs clearance, taxes and duties etc. The risks and insurance costs passes to the buyer once the shipment has passed the ship´s rail, but the seller pays for the transportation to the destination port, this term can be used only for ocean transportation.

CIF: Cost Insurance and Freight- the risks passes to the buyer once the goods pass the ship´s rail but the seller must pay the costs and freight necessary to bring the goods to the arrenged port of destination. all costs are tranferred from the seller to the buyer after delivery, however in CIF the seller must take an insurance against the buyer´s risk of damage or loss during the carriage, under CIF the seller is obligated to obtain insurance only in minimun cover, in case the buyer wants a greater cover he would either need to agree with the seller or to make his own extra insurance.This term is only used for ocean transportation.

CPT: Carriage Paid To- the seller delivers the goods to the carrier designated but must pay the cost of carriage to bring the goods to the named port of destination, the risk of loss or damage is transferred from the seller to the buyer when the goods have been delivered into custody of the main carriage and not at ship´s rail. this international commerce term can be used for multimodal tarnsport


CIP: Carriage and Insurance Paid to- it´s similar to CPT, however the seller must pay for transportation and insurance against the buyer´s risk of loss or damage to the goods during the transportation, this term can be used for any mode of transportation "multimodal"





GROUP D
seller assumes most of the risks and costs.

DAF: Delivered at Frontier- Risk and responsibility for import clearance is transferred to the buyer once the goods arrive at the named boarder point, the goods are placed at the disposal of the buyer on the arriving mean of transportation (not unloaded) cleared for export but not cleared for import, the goods must be delivered before the customs border, this frontier may be used for any frontier including the exporter´s coutry border, therefore is important to define clearly the name and point of delivery.

DES: Delivered Ex Ship- The seller fulfills his obligation when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the arraged port of destination, the seller assumes all the risks and costs until the goods arrive to the port of destination before discharging, this term can only be used for sea transportation.



DEQ: Delivered Ex Quay- The seller´s risks and responsibilities end when the goods are placed on the quay at the disposal of the importer at the destination port, the seller must take all the costs of carriage and unloading costs at the destination port, the buyer must clear the goods for import, and pay for taxes and duties, this term can be used for sea transportation or multimodal.



DDU: Delivered Duty Unpaid- The seller delivers the goods to the buyer not cleared for import and not unloaded from the mean of transportation at the named place of transportation, the buyer will assume all costs of unloading and duties which means the costs of carrying out the customs formalities, customs duties, taxes. This term may be used for any mode of tranport.



DDP: Delivered Duty Paid- Risk passes to buyer when seller delivers goods to named destination port cleared for must assume all costs of carriage and duties which includes carrying out customs formalities, customs duties, taxes and other charges for import in the coutry of destination, thimport, but not unloaded, the seller is international commerce term represents the maximum obligation for the seller, this term should not be used if the exporter is unable to obtain the import licence.