Table of Contents
Concept
Incoterms (short for International Commerce Terms) is a set of international trade rules recognized and widely used around the world.
Incoterms stipulate rules relating to prices and the responsibility of the parties (sellers and buyers) in an international commercial activity.
Features of Incoterms:
- Incoterms are commercial practices, not mandatory.
- Subsequent versions do not negate the validity of the previous versions.
- Incoterms only explain the most general matters relating to delivery, such as which party is obligated to hire the means of transport or purchase insurance, when the seller delivers the goods to the buyer and the division of costs between the parties. how is the side.
- The two buying and selling parties can increase or decrease their responsibilities and obligations to each other depending on their strong (weak) positions in the transaction, but they must not change the nature of the delivery conditions.
- Incoterms only determine when the risk of the goods passes from the buyer to the seller, but not the time when the ownership of the goods is transferred, nor the consequences of a breach of contract.
- Depending on which means of transport (air, sea, road, etc.) is carried, the type (bulk cargo, container, barge, etc.), there are corresponding groups of conditions.
What are Incoterms 2020?
Currently, there have been 9 changes to Incoterms over the years: 1936, 1953, 1967, 1976, 1980, 1990, 2000, 2010, 2020. Incoterms 2020 is the latest version, keeping 11 conditions like Incoterms 2010 but changing. DAT to DPU.
The main provisions of Incoterms 2020:
Group of terms applicable to all means of transport:
- EXW (Ex Works) – Delivered at the factory
- FCA (Free Carrier) – Delivered to Carrier
- CPT (Cost Paid to) – Fees paid to
- CIP (Carrier and Insurance Paid to)) – Charges and premiums paid to
- DPU (Delivered At Place Unloaded) – Delivered at the place of unloading
- DAP (Delivered At Place) – Delivered at destination
- DDP Delivered Duty Paid) ) – Delivery with tax paid
Group of terms applicable to sea and inland waterway transport:
- FAS (Free Alongside Ship) – Delivery along the side of the ship
- FOB (Free On Board) – Delivered on board
- CFR (Cost and Freight) – Freight and freight
- CIF (Cost, Insurance and Freight) – Cost, Insurance and Freight
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