Incoterms

  COUNTRY OF ORIGIN   COUNTRY OF DESTINATION
  Factoría Camión Aduana Muelle Grúa Buque   Buque Grúa Muelle Aduana Camión Factoría
  Factory Truck Customs Quay Crane Vessel   Vessel Crane Quay Customs Truck Factory
EXW                          
                         
                         
                         
                         
                           
FCA                          
                         
                         
                         
                         
                           
FAS                          
                         
                         
                         
                         
                           
FOB                          
                         
                         
                         
                         
                           
CFR                          
                         
                         
                         
                         
                           
CIF                          
                         
                         
                         
                         
                           
CPT                          
                         
                         
                         
                         
                           
CIP                          
                         
                         
                         
                         
                           
DES                          
                         
                         
                         
                         
                           
DAF                          
                         
                         
                         
                         
                           
DEQ                          
                         
                         
                         
                         
                           
DDU                          
                         
                         
                         
                         
                           
DDP                          
                         
                         
                         
                         
                           

                  Documents
                  Risk-Insurance
                  Expenses

The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.

The INCOTERMS was first published in 1936---INCOTERMS 1936---and it is revised periodically to keep up with changes in the international trade needs. The complete definition of each term is available from the current publication---INCOTERMS 2000. The publication is available at your local Chamber of Commerce affiliated with the International Chamber of Commerce (ICC).

Many importers and exporters worldwide are accustomed to and may still use the INCOTERMS 1980, the predecessor of INCOTERMS 1990 and INCOTERMS 2000.

Under the INCOTERMS 2000, the international commercial terms are grouped into E, F, C and D, designated by the first letter of the term (acronym), as follows:

In practice, trade terms are written with either all upper case letters (e.g. FOB, CFR, CIF, and FAS) or all lower case letters (e.g. fob, cfr, cif, and fas). They may be written with periods (e.g. F.O.B. and c.i.f.).

In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyer's end, for example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid). Quite often, the charges and expenses at the buyer's end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines.

Similarly, it would be best for importers not to deal in EXW (Ex Works), which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the seller's end.