MADE EASY e-GUIDE

to

INCOTERMS 2010

Published by

Import Export Made Easy

Version 1 February 2011

What you will find in the Made Easy e-Guide.

This77pageeGuidetothe2010versionofIncotermsisanessentialcompaniontothecoreICC
publication,Incoterms2010Rules,whichliststherulesbutdoesnotexplaintheimplicationsfor
partiesinvolvedintheshipmentofgoods.
ThisiswheretheMadeEasyeGuidefillsthegap,providingcriticalexplanationforallwhoneedto
useorunderstandtherulestraders,export/importandlogisticsmanagers,freightforwarders,
shippingcompanies,lawyersandbankers.
Writtenbytwointernationaltradeexpertsandpractitioners(CorinneCampbellofXDOCandLance
ScoularofKeyDirections),theMadeEasyeGuidecovers:
Descriptionoftheterms
Rulesgoverninguseofthetermsandwhattheycover
BuyerandSellerResponsibilities
RulesforInternationalandDomesticcontractsofsale
Howtousetherulescorrectly
Howtochoosetherightruleforyourcontractofsale
Risksassociatedwitheachterm

Guide format:
Theformatofthisguidehasbeendesignedforeaseofuse.Eachofthe11Incotermsrulesis
individuallyexplainedineasytofollowsections:
Definition
ResponsibilitiesofSellerandBuyer
Checklistofobligations
Casestudies/practicalscenarios
Charts

Remarks:
Theguidehasalistofremarksdividedinto5categoriesforeachspecificIncotermsrule.Thisis
designedtohelpyoutodecideontheIncotermsrulebestsuitedtoyourrequirements.
Positives

Whatarethebestpractices
Concerns
Whenusageisnotrecommended
Considerations Whattoconsider
Negotiables Whattoincludeinyournegotiationsandcontracts
Insurance
Whattoconsiderwheninsuringyourshipmentbeforeandduringtransit

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

Incoterms 2010 Rules explained.

EachIncoterms2010ruleisexplainedinfiveways:byanoutlineoftheresponsibilitiesofSeller
andBuyer,throughachecklist,withremarksandtips,casestudiesandcharts.Thisapproachmakes
iteasytoabsorbtheinformationandcreatesavaluablequickreferencetool.

Responsibilities of Seller and Buyer:

Atableisincludedforeachofthe11Incoterms2010rulesandsetsoutclearlythespecificactions
tobetakenbybothSellerandBuyer.Italsoidentifiesanypartintheprocesswhichrequires
particularattention.

Example:

Supplygoodsanddocumentsasagreed
Packandmarkasagreedandrequired
Selectwheregoodsareavailableforcollection

RESPONSIBILITY
OFSELLER

Makegoodsavailableatagreedplaceanddate
Givetimelynoticeofgoodsavailability
ProvideBuyerinformationonexportdocumentation
ProvideBuyerinformationonexportprocedures/documents

AdviseSellerwhengoodswillbecollected
CollectgoodswhenplacedatdisposalbySeller
Loadgoods

RESPONSIBILITY
OFBUYER

Provideevidenceofhavingpickedupthegoods
Arrangealltransporttofinaldestination
Clearforexport(ifneeded)
Clearforimport(ifneeded)

RISKS

TransfersfromSellertoBuyerwhengoodshavebeenmadeavailableat

agreedplaceanddate

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

Checklist:
Achecklistisincludedforeachofthe11Incoterms2010rulesandprovidesavaluableandsuccinct
methodofcheckingthatyouhaveaccountedforeverything.

Example:
Obligations

Seller

Buyer

ProvideCommercialDocuments

ExportLicenses,Authorizations,SecurityClearances&otherformalities

AssistanceinExport

ContractofPremaincarriageinSellersCountry

ContractofMainCarriageinSellersCountry

LoadinggoodsatTerminal/Place

Loadingcost

ContractofInsuranceObligation

Provideinformationtoobtaininsurance

PremainTransportrisk

MainTransportrisk

UnloadingatTerminal/PlaceatSellerscountry

ExportDuties,TaxesandCustomsformalitycosts

ImportLicenses,Authorizations,SecurityClearances&otherformalities

AssistanceinImport

ContractofCarriageinBuyersCountry

Unloadinggoodsatagreedplace

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

Remarks:
Atableofcommentsisincludedforeachofthe11Incoterms2010rules.Thisoutlinesthebest
circumstancesforapplyingtherule,alertstheusertoanynegativeaspectsoftheparticularrule,
identifiesparticularareasforconsiderationwhendecidingwhichruletouseandwhattoincludein
thecontract,andincludesremarksaboutinsurancerequirements.

Example:
TobeusedinsteadofCFRwhenusingcontainers
Sellerpaysmaincarriagetodestinationbutdoesntcarrythe

transportrisk
Underaletterofcredit,Sellerminimisesriskbyhavingcontrolof

shippingdateandshippingdocuments

BuyerhasmaincarriageriskwhilefreightiscontrolledbySeller

BuyershouldassessifSellersfreightratemarginisexcessive
IfSellerhasadequatemarineinsurancecover,considerusingCIP

SpecifyplacewhereSellerdeliverstocarrier(countryofSeller)
Specifyprecisefinalnamedplaceofdestination

Agreeonwhichparty,ifany,arrangesmarineinsurance
Bothpartieshaveanobligationtoprovideinformationtoenable

otherpartytoarrangemarineinsurance

Considercoveringpreandpostshipmentrisk

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

Case Studies: Atleasttwopracticalscenariosareincludedforeachrule.

Example:
Scenario:GermanengineeringcompanysellsaLCLcontainershipmentof12boxesspareparts
12M3measurementtoaminingcompanyinJohannesburg,SouthAfrica.

TermsofSale:CPTJohannesburg,SouthAfrica:DeliverytoContainerPackingDepot,16Landenberg
Strasse,Hamburg,Germany.Finaldestination:JohannesburgContainerUnpackingDepot,15Protea
Place,Johannesburg,SouthAfrica.

ModeofTransportForMainCarriage:Sea(containervessel)

TypeofTrade:International

InsuranceObligations:NilforBuyerandSeller.Ifagreed,specifyincontractofsalewhichparty
insuresthegoods.
ExportCountryObligationsincludingDutiesandTaxes:Seller

ImportCountryObligationsincludingDutiesandTaxes:Buyer

SellersRisk:UptodeliverytoLCLpackingdepotinSellerscountry.

SellersCosts:CostofdeliverytocontainerpackingdepotinSellersCountry,packinggoodsinto
consolidationcontainer,loadingontovesselandallsubsequentcoststoBuyersunpackingdepot.

BuyersRisk:FromreceiptatLCLpackingdepotinSellerscountry.

BuyersCosts:AllcostsfromLCLunpackingdepotinBuyerscountry(includingcontainerunpacking
charges)andallsubsequentcoststoBuyerspremises.

Charts: Graphicsareincludedtoillustrateeachscenario.Sellerresponsiblitiescorrelatedwith
costsaredepictedinblue;Buyerresponsibilitiescorrelatedwithcostsareinorange.

Example:

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules

DisclaimerandCopyrightNotice

Thispublicationcontainsinformation,documents,pagesandimages(Information)preparedby
XDOCandKEYDIRECTIONSforeducationandeducationonly.
Itisnotlegaladvice;ifyouwishtoobtainlegaladvice,youshouldconsultalegal,financialortax
practitionerinyourjurisdiction.
Atthetimeofgoingtopress,thepublishersbelievethatallinformationsubmittedforpublicationis
accurate.However,thepublisherstakenoresponsibilityforanyinformationcontainedinthis
publication.Nowarranty,expressedorimplied,isgivenandnoliabilityisacceptedbyXDOCandKey
Directions.
CopyrightXDOCandKeyDirections
ABN49424733616
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,orbe
transmittedtoanyotherpersonbyanymaterialmeans,electronic,mechanical,photocopying,
facsimile,recordingorotherwise,withoutthepriorwrittenapprovalofthepublisher.

Incoterms2010bytheInternationalChamberofCommerce(ICC)andanyofitsvariantsare
trademarksorregisteredvariantsoftheInternationalChamberofCommerce(ICC).
Thispublication,ourcomments,opinionsorothercontent,arenotsponsored,affiliatedortestedby
theICC;werecommendyourefertotheICCofficialpublicationofIncoterms2010ICCrules715.
TheInternationalChamberofCommerce,theworldbusinessorganisationbasedinParis,isthe
globalleaderinthedevelopmentofstandards,rulesandreferenceguidesforinternationaltrade.
ICCPublicationsavailableatICCBusinessBookstorewww.iccbooks.com

XDOC and Key Directions, authors of 2011 Made Easy e-Guide to Incoterms 2010 Rules