Transcript EXW EX Works (…named place)

INCOTERMS 2000
Incoterms – what are they and
what can they do for you
• Incoterms is an abbreviation
of International commercial terms
• It is a vital term of the contract of sale and not of
the contract of carriage
• It guides seller and buyers with regard to:
- carriage of goods from seller to buyer
- export and import clearance
and also the division of costs and risk between the
parties
Incoterms
• Use generally recognized key words
• Agree on the most common understanding
of those key words
• Avoid misunderstandings in their use
Incoterms
• Problems still occur because:
- commercial practice is inconsistent
- variations of the key word may not be
appropriate
- the Incoterm is not sufficiently precise
- the parties inadvertently choose the
wrong term
Incoterms – what are they and
what they cannot do for you
• Incoterms do not deal with:
-
transfer of property rights in the goods
-
relief from obligations and exemptions
from liability in case of unexpected or
unforeseen events
Incoterms – what are they and
what they cannot do for you
• Incoterms also do not deal with:
-
consequences of various breeches of
contract, except those relating to the
passing of risk and costs when the buyer
is in breach of his obligation to accept
the goods or to nominate the carrier
under an F-term
Incoterms –referencing in a
contract of sale
• Parties are strongly advised to
- include in the contract of sale in
conjunction with the trade term the
words “Incoterms 2000” and …
•
check that standard contract contains
such a reference or superimpose
and now let’s
discuss
Incoterms 2000
The seller’s minimum obligation
only to make goods available for
the buyer at the seller’s premises
(EXW)
EXW
Group E: departure
Ex Works (…named place)
Required document’s
Seller’s
• Commercial invoice
primary duty
• Buyer’s receipt
• Place the goods at Optional documents
the disposal of the
buyer at the named • Other documents
needed for export or
place
transit of the goods
through any country or
for import clearance
A
B Buyer’s primary
duty
• Take delivery of the
goods when it has been
paced at his disposal
Critical Points:
• Carriage to be arranged by the buyer
• Risk and Cost transfer from the seller to the buyer when the goods are
at the disposal of the buyer
The sellers’ extended obligation
to hand over goods for carriage
either to a carrier nominated by
the buyer (FCA, FAS, FOB) or,
(why?) to a carrier chosen and
paid for by the seller (CFR, CPT)
together with insurance against
risks in transit (CIF, CIP)
CFR versus CIF?
FCA
Group F: main carriage not paid by seller
Free Carrier (…named place)
Required
document’s
Seller’s
• Commercial invoice
primary duty
• Usual document
• Deliver the
evidencing delivery
goods at the
named point and of goods to the carrier
also load goods • Export license if
necessary
on buyer’s
collecting
Optional documents
vehicle
•Other documents
(changed from
needed for export or
1990)
transit of the goods
through any country
or for import
clearance
A
B
Buyer’s
primary duty
• Nominate carrier
• Contract for
carriage, refer clause
(A3a) – ICC Guide
to Incoterms 2000
• Buyer has to
unload the vehicle
(changed from
1990)
FCA
Group F: main carriage not paid by seller
Free Carrier (…named place)
A
Seller’s
primary duty
• Provide
evidence of
delivery of goods
to the carrier
• Arrange export
clearance
FCA
Group F: main carriage not paid by seller
Free Carrier (…named place)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to
the buyer when the goods have been
delivered to the carrier at the named place
• Carriage to be arranged by the buyer or by
the seller on the buyer’s behalf
FAS
Group F: main carriage not paid by seller
Free Alongside Ship (…named port of shipment)
Required
Seller’s
document’s
primary duty
• Commercial invoice
• Deliver the
• Customary clean
goods alongside receipt
the ship
• Export license if
• Provide an
necessary
alongside receipt
Optional documents
• Arrange
•Other documents
export clearance
needed for export or
(changed from
transit of the goods
1990)
through any country
or for import
clearance
A
B
Buyer’s
primary duty
• Nominate carrier
• Contract for
carriage
FAS
Group F: main carriage not paid by seller
Free Alongside Ship (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to
the buyer when the goods have been placed
alongside the ship
• Carriage to be arranged by the buyer
FOB
Group F: main carriage not paid by seller
Free on Board (…named port of shipment)
Only to be used when:
• when maritime transport will take place
• when goods are to be lifted across a ship’s rail
• tendered to the ship in hoses for liquid cargo
• filled form silos when the cargo is to be carried loose in bulk
• If not above, instead use FCA, thereby indicating the actual
place where goods are handed over for carriage
FOB
Group F: main carriage not paid by seller
Free on Board (…named port of shipment)
A
Seller’s
primary duty
• Deliver the
goods on board
• Provide a clean
on board receipt
• Pay loading
costs not
included in the
freight
•Arrange export
clearance
Required
document’s
• Commercial invoice
• Customary clean
receipt
• Export license if
necessary
Optional documents
•Other documents
needed for export or
transit of the goods
through any country
or for import
clearance
B
Buyer’s
primary duty
• Nominate carrier
• Contract for
carriage
• Pay unloading costs
FOB
Group F: main carriage not paid by seller
Free on Board (…named port of shipment)
CONTINUED…
Critical Points:
• Risk and Cost transfer from the seller to
the buyer when the goods pass the ship’s rail
•Carriage to be arranged by the buyer
CFR
Group C: main carriage paid by seller
Cost and Freight (…named port of destination)
A Seller’s primary Required
Buyer’s
duty
document’s
• Contract for
primary duty
•
Commercial
invoice
carriage
• Transport document • Accept delivery of
•Deliver the goods
the goods upon
on board
• Export license if
shipment
• Provide a clean
necessary
transport document
• Receive the goods
(Bill of Lading / Sea Optional documents from the carrier
Waybill)
•Other documents
• Pay such costs as
•Arrange export
needed for export or
are not for the
clearance
transit of the goods
seller’s account
• Pay unloading costs through any country
under the contract of
if for his account
or for import
under the contract of
carriage
clearance
carriage
B
CFR
Group C: main carriage paid by seller
Cost and Freight (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods pass the ship’s rail
• Cost transfer at port of destination, buyer
paying such costs as are not for the seller’s
account under the contract of carriage
CIF
Group C: main carriage paid by seller
Cost, Insurance and Freight (…named port of destination)
Required
Seller’s
document’s
primary duty
• Commercial invoice
• Contract for
• Transport document
carriage and
• Export license if
insurance
necessary
•Deliver the goods
on board
• Insurance policy
• Provide a clean
(Certificate)
transport document
(Bill of Lading / Sea Optional documents
Waybill) and a cargo •Other documents
insurance policy or
needed for export or
certificate
transit of the goods
through any country
or for import
clearance
A
B
Buyer’s
primary duty
• Accept delivery of
the goods upon
shipment
• Receive the goods
from the carrier
• Pay such costs as
are not for the
seller’s account
under the contract of
carriage
CIF
Group C: main carriage paid by seller
Cost, insurance and freight (…named port of destination)
CONTINUED…
A
Seller’s
primary duty
• Arrange export
clearance
• Pay loading costs
• Pay unloading costs if
for his account under
the contract of carriage
CIF
Group C: main carriage paid by seller
Cost Insurance and Freight (…named port of destination)
Critical Points:
• Carriage and Insurance to be arranged by
the Seller
• Risk transfer from the seller to the buyer
when the goods pass the ship’s rail
• Cost transfer at port of destination, buyer
paying such costs as are not for the seller’s
account under the contract of carriage
CPT
Group C: main carriage paid by seller
Carriage paid to (…named place of destination)
Required
Seller’s
document’s
primary duty
• Commercial invoice
• Contract for
• Transport document
carriage
• Export license if
•Deliver the
necessary
goods to the
Optional documents
(first) carrier
•Other documents
• Provide a clean
needed for export or
transport
transit of the goods
document (Bill of
through any country
Lading / Sea
or for import
Waybill)
clearance
A
B
Buyer’s
primary duty
• Accept delivery of
the goods when they
have been delivered
to the carrier
• Receive the goods
from the carrier
• Pay such costs as
are not for the
seller’s account
under the contract of
carriage
CPT
Group C: main carriage paid by seller
Carriage paid to (…named place of destination)
CONTINUED…
A
Seller’s
primary duty
• Pay unloading
costs if for his
account under the
contract of
carriage
• Pay loading
costs
•Arrange export
clearance
CPT
Group C: main carriage paid by seller
Carriage paid to (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods have been delivered to the
carrier
•Cost transfer at port of destination, buyer
paying such costs as are not for the seller’s
account under the contract of carriage
CIP
Group C: main carriage paid by seller
Carriage and Insurance paid to (…named place of destination)
Required
Seller’s
document’s
primary duty
• Commercial invoice
• Contract for the • Transport document
carriage and
• Export license if
Insurance
necessary
•Deliver the
• Insurance Policy
goods to the
(Certificate)
(first) carrier
Optional documents
• Provide a clean
•Other documents
transport
document (Bill of needed for export or
transit of the goods
Lading / Sea
through any country
Waybill)
or for import
clearance
A
B
Buyer’s
primary duty
• Accept delivery of
the goods when they
have been delivered
to the carrier
• Receive the goods
from the carrier
• Pay such costs as
are not for the
seller’s account
under the contract of
carriage
CIP
Group C: main carriage paid by seller
Carriage and Insurance paid to (…named place of destination)
CONTINUED…
A
Seller’s
primary duty
• Pay unloading
costs if for his
account under the
contract of
carriage
• Pay loading
costs
•Arrange export
clearance
CIP
Group C: main carriage paid by seller
Carriage and Insurance paid to (…named place of destination)
Critical Points:
• Carriage and Insurance to be arranged by
the Seller
• Risk transfer from the seller to the buyer
when the goods have been delivered to the
carrier
• Cost transfer at place of destination, buyer
paying such costs as are not for the seller’s
account under the contract of carriage
The seller’s maximum obligation
to deliver the goods at destination
(DAF, DES, DEQ, DDU or DDP)
DAF
Group D: arrival
Delivered at Frontier (…named place)
Required
Seller’s
document’s
primary duty
• Commercial invoice
•Deliver the goods at
• Transport document
the named frontier
or warehouse warrant
• Provide a
document to enable
Optional documents
the buyer to take
• Through transport
delivery at the
frontier or assist him document
to obtain a through
•Other documents
transport document
needed for export or
•Arrange export
transit of the goods
clearance
through any country
or for import
clearance
A
B
Buyer’s
primary duty
• Take delivery of the
goods at the named
frontier or assume
responsibility for oncarriage
• Arrange import
clearance
DAF
Group D: arrival
Delivered at Frontier (…named place)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods have been delivered at the
frontier
• Cost transfer from the seller to the buyer
when the goods have been delivered at the
frontier
DES
Group D: arrival
Delivered ex ship (…named port of destination)
A
Seller’s
primary duty
•Deliver the goods
on board the ship at
the Port of
destination
• Provide a
document to enable
the buyer to take
delivery from the
ship (Bill of Lading
or delivery order)
•Arrange export
clearance
Required
document’s
• Commercial invoice
• Bill of Lading or
delivery order
Optional documents
•Other documents
needed for transit of
the goods through
any country or for
import clearance
B
Buyer’s
primary duty
• Take delivery of the
goods from the ship
at the Port of
destination
•Arrange import
clearance
DES
Group D: arrival
Delivered ex ship (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer on board the ship
• Cost transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer on board the ship
DEQ
Group D: arrival
Delivered ex Quay (…named port of destination)
A Seller’s
Required
Buyer’s
primary duty
document’s
•Deliver the goods
primary duty
•
Commercial
on the quay at the
• Take delivery of
invoice
Port of destination
the goods from the
• Provide a
• Bill of Lading or
ship at the Port of
document to enable delivery order
the buyer to take
destination
Optional documents
delivery from the
•Arrange import
quay (Bill of Lading •Other documents
clearance (changed
or delivery order)
needed for transit of
from 1990)
•Arrange export
the goods through
clearance
B
any country or for
import clearance
DEQ
Group D: arrival
Delivered ex Quay (…named port of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer on board the ship
• Cost transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer on board the ship
DDU
Group D: arrival
Delivered duty unpaid (…named place of destination)
A Seller’s
Required
Buyer’s
primary duty
document’s
•Deliver the goods at
primary duty
•
Commercial
the named place of
• Take delivery of
invoice
destination
• Provide a
•Document needed to the goods from the
named place of
document to enable take delivery
the buyer to take
destination
Optional documents
delivery
•Arrange import
•Other documents
•Arrange export
clearance
clearance
needed for transit of
B
the goods through
any country or for
import clearance
DDU
Group D: arrival
Delivered duty unpaid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer
•Cost transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer
DDP
Group D: arrival
Delivered duty paid (…named place of destination)
A Seller’s
Required
Buyer’s
primary duty
document’s
•Deliver the goods at
primary duty
•
Commercial
the named place of
• Take delivery of
invoice
destination
• Provide a
•Document needed to the goods from the
named place of
document to enable take delivery
the buyer to take
destination
• Import license, if
delivery
necessary
•Arrange export
clearance
B
DDP
Group D: arrival
Delivered duty paid (…named place of destination)
Critical Points:
• Carriage to be arranged by the Seller
• Risk transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer
•Cost transfer from the seller to the buyer
when the goods are placed at the disposal of
the buyer
Now which one is appropriate?
• Commercial practice and the type of goods will
dictate whether
- the seller should refrain from undertaking
additional obligations
- the seller is prepared to do more than make the
goods available to the buyer at the seller’s
premises
- the buyer’s bargaining position allows him to
require the seller to undertake additional
obligations
the seller is able to undertake additional
obligations , and in particular, to quote a more
competitive price by extending his obligations
Now which one is appropriate?
• Commercial practice and the type of goods will
also dictate whether
- it is necessary to use the maritime terms FAS,
FOB, CFR or CIF when the goods are intended to
be resold before they reach their destination
- But …. in the case of manufactured goods
(containerized), it is more appropriate to use FCA,
CPT or CIF and not FAS, FOB, CFR or CIF
- Manufactured goods will rarely be picked out
of the ship by the buyer/quay(DES, DEQ) but
rather delivered in cargo terminal, therefore DDU,
DDP will be more appropriate
Thank you