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Important Terms used in Export and Import

Important Terms used in Export and Import

Published in: Lifestyle

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  • 1. INCOTERMSAravin Prince Periyasamy M.Tech (Textiles) 0091-9790080302
  • 2. Incoterms These are Internationally Accepted Commercial Terms defining the respective roles and responsibilities (including costs) of the buyer and seller in the arrangement of transportation and other obligations
  • 3. Incoterms 2000 First published by the ICC in 1936 ICC (International Chamber of Commerce) Official Rules for the Interpretation of Trade terms. Purpose is to provide a set of international rules for the interpretation of the most commonly used trade terms. 10 categories describing where risks lie between seller and buyer International Commercial Terms (INCOTERMS)
  • 4. Incoterms – Purpose and Scope  Pricing terms, shipping terms, sales terms  Apply to international trade  Define the rights and obligation of the parties to the contract of sale with respect to the delivery of goods sold.
  • 5. Four Groups of Incoterms Less More Control 1) “E” group Control 2) “F” groupSeller Buyer 3) “C” group More Less 4) “D” group Control Control 5
  • 6.  The “E”-term is the term in which the seller’s obligation is at its minimum. Seller delivers when goods placed at disposal of buyer
  • 7. Incoterms 2000 The “F” –terms require the seller to deliver goods for carriage as instructed by the buyer. FCA FAS FOB
  • 8. Incoterms 2000 The “C” –terms require the seller to contract for carriage at his expense – to a specified point. CFR CIF CPT CIP
  • 9. Incoterms 2000 The “D” –terms require the seller to take the goods all the way to destination at the border or within the country of import. DAF DES DEQ DDU DDP
  • 10. Incoterms Group E - Departure:  EXW. Ex Works (named place) Group F - Main Carriage Unpaid:  FCA Free Carrier (named place)  FAS Free Alongside Ship named loading port)  FOB Free On Board (named loading port) Group C - Main Carriage Paid:  CFR Cost and Freight (named destination port)  CIF Cost, Insurance and Freight (named destination port)  CPT Carriage Paid To (named destination)  CIP Carriage and Insurance Paid to (named destination) Group D - Arrival:  DAF Delivered At Frontier (named place)  DES Delivered Ex Ship (named port)  DEQ Delivered Ex Quay (named port)  DDU Delivered Duty Unpaid (named destination place)  DDP Delivered Duty Paid (named destination place)
  • 11. In Summary Buyer’s Objective: maximize control of supply chain, use FOB, FCA, or FAS Must name a place after the INCOTERM INCOTERMS are negotiable! INCOTERMS should appear on all commercial documents Establish a close relationship with a forwarder 11