Incoterms (International Commercial Terms) or Parities are internationally accepted standards that define the responsibilities and obligations of sellers and buyers in international trade. Incoterms provide a clear framework for interpreting the commercial terms and conditions of delivery of goods, including responsibilities for transportation, insurance, customs clearance, and risk-taking.
Incoterms are developed and maintained by the International Chamber of Commerce (ICC) and have been updated to accommodate changes in global trade. Each version of Incoterms has its own set of rules that apply to international contracts for the sale of goods.
The latest version of Incoterms, released in 2020, includes the following Incoterms:
- EXW (Ex Works): The seller is only responsible for making the goods available to the buyer at his location.
- FCA (Free Carrier): The seller is responsible for delivering the goods to the carrier at the agreed location.
- CPT (Carriage Paid To): The seller is responsible for organizing and paying for the transportation of the goods to the agreed destination.
- CIP (Carriage and Insurance Paid To): Similar to CPT, the seller is responsible for organizing and paying for the transportation of goods, but must also insure the goods against risk during transportation.
- DAP (Delivered at Place): The seller is responsible for delivering the goods to the agreed destination, assuming all costs and risks up to the time of delivery.
- DPU (Delivered at Place Unloaded): Similar to DAP, but the seller is also responsible for unloading the goods at the agreed destination.
- DDP (Delivered Duty Paid): The seller is responsible for organizing and paying for the transportation of the goods to the agreed destination, including all costs and risks, including customs duties.
- FAS (Free Alongside Ship): The seller is responsible for delivering the goods next to the ship at the agreed port of departure.
- FOB (Free on Board): The seller is responsible for delivering the goods to the ship at the agreed port of departure.
- CFR (Cost and Freight): The seller is responsible for organizing and paying for the transportation of the goods to the agreed destination, including the cost of transportation to the port of destination.
- CIF (Cost, Insurance and Freight): Similar to CFR, the seller is responsible for organizing and paying for the transportation of the goods, but must also insure the goods against risk during transportation to the port of destination.
Incoterms provide clarity and unambiguity in determining responsibilities and costs between seller and buyer in international trade. It is important to correctly select the appropriate Incoterm that suits the needs and requirements of the contracting party. In any case, for any additional questions, you can contact us via email or phone
