International Law Incoterms

Incoterms work like a code of three letters that every party agree to

Incoterms have 3 letters that define the rules of the ICC that are applied

Cost and risk that are associated with the transport of goods

first drafted in 1936 now updated every 10 years

In total 11 different terms

7 of them are for every method of transport

4 of them can only be used for the sea and waterway transport

EXW (Ex works)

FCA (Free Carrier)

CPT (carriage paid to)

CIP (Carriage and insurance paid to)

DAP (Delivered at place)

DPU (Delivered at place unloaded)

DDP (Delivered duty paid)

FAS (Free alongside ship)

FOB (Free on board)

CFR (Cost and freight)

CIF (Cost, insurance and freight)

Incoterms regulate to what extent the buyer or the seller are responsible for the transport of the good (Insurance/payment)

It passes the risk from the one to the other side or vise versa

Typical cases are:

• Who has to pay if the good isdestroyed or damaged

• who has to pay for the insurance

• who bears the premium for it

• Clearance of the import and export formalities

• costums and taxes

• Responsible for the documentation

• Responsibity for the packaging and information duties

Conclusion of the contract (in there the incoterms are defined)

Transfer of ownership in the good (national law or CISG)

payment terms are defined in the contract itself

E Group

• cost and risk pass to the buyer when the seller makes the good available to the buyer and the named place. In general the sellers premises (Firma oder Ort des Verkäufers)

F Group

• The buyer bears the cost of the main transport. Cost and risk pass to the buyer when the good is handed over to the main carrier named by the buyer at the named place.

C Group

• The seller bears the cost of the main transport. However, the cost risk already passes to the buyer when the good is handed over to the main carrier at the named place.

D Group

• The seller bears the cost and risk of the main transport until the arrival at the named place (typically the buyers premises)

the seller has complied with hsi obligations when he places the goods at his premises or another named place for example his work, his factory or warehouse

the seller does not need to load the goods nor does he needs to clear the goods for export

means that the seller has agreed that he is responsible to place to good at the buyers place. For Example; workplace, Warehouse, other locations

The seller bears all the risk that involved in bringing the good to the place of destination.

The seller has the clear the goods ( zoll abfertgigung) for export and for import

All the costums are handeld by the seller