Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
INCOTERMS
Explanation of the BASIC TERMS used in International Trade
World Trade today unthinkable without Incoterms
What are INCOTERMS?
 Full form – International Commercial Terms
 Published by the International Chamber of
Commerce (ICC...
What are INCOTERMS? (contd.)
 Intended to communicate the Tasks, Costs, and Risks
Associated with the Transportation & De...
Imagine a Scenario…
 A seller in Tokyo (Japan) is informing a buyer in Caracus
(Venezuela) that a particular product cost...
Why are INCOTERMS important?
 Universally Recognised
 Reduces Uncertainties
 Avoids different interpretations in differ...
General Flow of Goods
Main
International
Transportation
4
Handling
Inbound
Customs
Clearance
Duties
Final
Transportation
U...
VARIOUS INCOTERMS EXPLAINED
The Categories
Incoterms Code
Ex works EXW
Free carrier FCA
Free alongside ship FAS
Free on board FOB
Cost & freight CFR
C...
Ex Work
 Seller delivers the goods at the disposal of the buyer at the seller’s
premises or at another named place (i.e.,...
Ex Work (contd.)
 EXW represents the seller’s minimum obligation
 The seller has no obligation to load the goods, even t...
FCA – Free Carrier
 “Free Carrier” means that the seller delivers the goods to the
carrier or another person nominated by...
CPT – Carried Paid To
 “Carriage Paid To” means that the seller delivers the goods to
the carrier or another person nomin...
CIP - Carriage & Insurance Paid To
 “Carriage and Insurance Paid to” means that the seller delivers
the goods to the carr...
CIP - Carriage & Insurance Paid To (contd.)
 The seller also contracts for insurance cover against the
buyer’s risk of lo...
DAT – Delivered At Terminal
 “Delivered at Terminal” means that the seller delivers when the
goods, once unloaded from th...
DAP – Delivered At Place
 “Delivered at Place” means that the seller delivers when the
goods are placed at the disposal o...
DDP – Delivered Duty Paid
 “Delivered Duty Paid” means that the seller delivers the goods
when the goods are placed at th...
FAS – Free Alongside Ship
 “Free Alongside Ship” means that the seller delivers when the
goods are placed alongside the v...
FOB – Free On Board
 “Free On Board” means that the seller delivers the goods
on board the vessel nominated by the buyer ...
CFR – Cost and Freight
 “Cost and Freight” means that the seller delivers the goods on
board the vessel or procures the g...
CIF – Cost insurance and Freight
 “Cost, Insurance and Freight” means that the seller delivers the
goods on board the ves...
CIF – Cost insurance and Freight (contd.)
 “Cost, Insurance and Freight” means that the seller delivers the
goods on boar...
 The seller also contracts for insurance cover against the
buyer’s risk of loss of or damage to the goods during the
carr...
Summary of Various Incoterms
Want to Import / Export any Product?
 Visit our website – www.AzpireTrading.com – and we will help
you out.
 We are UAE’...
Upcoming SlideShare
Loading in …5
×
Upcoming SlideShare
INCOTERMS
Next
Download to read offline and view in fullscreen.

6

Share

Download to read offline

Payment Incoterms (International Trade)

Download to read offline

An in-depth explanation of the Payment Incoterms used in the International Trade. To know more about it, visit us at www.azpiretrading.com

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all

Payment Incoterms (International Trade)

  1. 1. INCOTERMS Explanation of the BASIC TERMS used in International Trade
  2. 2. World Trade today unthinkable without Incoterms
  3. 3. What are INCOTERMS?  Full form – International Commercial Terms  Published by the International Chamber of Commerce (ICC)  "Incoterms" is a registered trademark of the ICC  Series of three-letter trade terms related to common contractual sales practices
  4. 4. What are INCOTERMS? (contd.)  Intended to communicate the Tasks, Costs, and Risks Associated with the Transportation & Delivery of Goods.  Accepted by Governments, Legal Authorities, & practitioners worldwide for the terms in International Trade.  Updated regularly  First published in 1936  Latest - Eighth version - Incoterms 2010
  5. 5. Imagine a Scenario…  A seller in Tokyo (Japan) is informing a buyer in Caracus (Venezuela) that a particular product costs “US Dollars $125.00 per unit”, that buyer will still not know  Where Goods will be Delivered  Who will Pay for the Shipment from Tokyo to Caracus  Who will Clear the goods through Customs & pay Import Duties  Who will pay any necessary Insurance  All this will be cleared on adding an Incoterm & Place
  6. 6. Why are INCOTERMS important?  Universally Recognised  Reduces Uncertainties  Avoids different interpretations in different countries & languages.  Additional costs and time can be avoided
  7. 7. General Flow of Goods Main International Transportation 4 Handling Inbound Customs Clearance Duties Final Transportation Unloading Packing Loading Preliminary Transportation Customs Clearance for Exports Handling Outbound Insurance 1 2 3 5 6 7 891011
  8. 8. VARIOUS INCOTERMS EXPLAINED
  9. 9. The Categories Incoterms Code Ex works EXW Free carrier FCA Free alongside ship FAS Free on board FOB Cost & freight CFR Cost, insurance & freight CIF Carriage paid to CPT Carriage and insurance paid to CIP Delivered at frontier DAF Delivered ex ship DES Delivered ex quay DEQ Delivered duty unpaid DDU Delivered duty paid DDP ETerms FTerms CTerms DTerms Total 11 Incoterms
  10. 10. Ex Work  Seller delivers the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.)  The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable  The parties should precisely specify the point within the named place of delivery, as all costs and risks up that point are for the seller’s account  The buyer thereafter bears all costs & risks of transport
  11. 11. Ex Work (contd.)  EXW represents the seller’s minimum obligation  The seller has no obligation to load the goods, even though it may be in a better position to do so
  12. 12. FCA – Free Carrier  “Free Carrier” means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place  The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point  FCA requires the seller to clear the goods for export, where applicable
  13. 13. CPT – Carried Paid To  “Carriage Paid To” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties)  Seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination  CPT requires the seller to clear the goods for export if necessary  However, the seller has no import clearance or duty obligation
  14. 14. CIP - Carriage & Insurance Paid To  “Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties)  The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.
  15. 15. CIP - Carriage & Insurance Paid To (contd.)  The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.  The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover.  Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements
  16. 16. DAT – Delivered At Terminal  “Delivered at Terminal” means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination  “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal  The seller bears all risks involved in bringing the goods to and unloading them at the terminal at named port or place of destination
  17. 17. DAP – Delivered At Place  “Delivered at Place” means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination  The seller bears all risks involved in bringing the goods to the named place.
  18. 18. DDP – Delivered Duty Paid  “Delivered Duty Paid” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination.  The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.
  19. 19. FAS – Free Alongside Ship  “Free Alongside Ship” means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment.  The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.
  20. 20. FOB – Free On Board  “Free On Board” means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered  The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.
  21. 21. CFR – Cost and Freight  “Cost and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered  The risk of loss of or damage to the goods passes when the goods are on board the vessel  The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
  22. 22. CIF – Cost insurance and Freight  “Cost, Insurance and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered  The risk of loss of or damage to the goods passes when the goods are on board the vessel.  The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
  23. 23. CIF – Cost insurance and Freight (contd.)  “Cost, Insurance and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered  The risk of loss of or damage to the goods passes when the goods are on board the vessel  The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
  24. 24.  The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage  The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover  Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements CIF – Cost insurance and Freight (contd.)
  25. 25. Summary of Various Incoterms
  26. 26. Want to Import / Export any Product?  Visit our website – www.AzpireTrading.com – and we will help you out.  We are UAE’s premier Importer & Exporter of all goods.
  • HarshDave45

    Feb. 24, 2020
  • AureliaMirsu

    Dec. 6, 2016
  • Syahraul7

    Nov. 23, 2016
  • LeonardoGoncalves13

    Nov. 11, 2016
  • ArvinderArora

    Sep. 19, 2016
  • azpiretrading

    Aug. 5, 2016

An in-depth explanation of the Payment Incoterms used in the International Trade. To know more about it, visit us at www.azpiretrading.com

Views

Total views

910

On Slideshare

0

From embeds

0

Number of embeds

1

Actions

Downloads

78

Shares

0

Comments

0

Likes

6

×