INTERNATIONAL COMMERCIAL TERMS - INCOTERMS 2020

1. EXW(place of delivery) - Ex work

 Definition
Under EXW 2020 the seller's obligations are minimal. The seller is responsible for
packing and placing the goods at the disposal of the buyer at the seller's premises or a
designated location without loading on the vehicle.
In EXW, the point of delivery is not necessarily the seller's warehouse but can be
another location.
The seller does not need to clear the goods nor sign or pay any costs for the contract
of carriage of the goods to the destination.
 Obligations
Seller’s obligations:
 Must deliver the goods, the commercial invoice and the goods documents.
 The seller is not obliged to enter into and pay for the contract of carriage.
However, if requested by the buyer, the seller must provide all documents or
information necessary for the buyer to contract for carriage with the carrier.
 Support buyers in export and import customs clearance, goods transit but without
any costs
Buyer’s obligations:
 The buyer must pay for the goods as agreed in the contract
 Sign and pay all costs for the contract with the carrier.
 Customs clearance for export, import and transit if applicable
Regarding the delivery of goods:
Delivery by placing an order at the agreed place (whether it is the seller's premises or
not) at the agreed time without loading the goods onto the means of transport. The
buyer receives the goods from the agreed point after receiving notice from the seller.
 Cost
Seller:
 Any costs incurred in connection with the loss or damage of the goods before the
goods are delivered
 The cost of bringing the goods to the named point of delivery if that point is not
in the buyer's warehouse
Buyer:
 All costs related to import, export, transit of goods, taxes
 All costs related to the goods from the time they are delivered in accordance with
the terms of the contract
 Any fees incurred when not receiving goods in time
 Risk
Seller:
All risks of loss or damage until the completion of the order at the agreed place and
time
Buyer:
At the point of delivery, which is the seller's warehouse or where all costs and risks
have been agreed, the goods are transferred from the seller to the buyer.
 Mode of transport
This term will be used for multiple modes of transport and can be used when more
than one means of transport is involved
2. FCA (place of delivery) - Free Carrier
 Definition
With FCA Incoterms 2020 (Free Carrier), the seller must deliver the goods and related
documents mentioned in the contract to the buyer. There are 2 specified transfer
locations:
- If the goods are delivered at a place under the control of the seller, such as a
warehouse or workshop, the seller is obligated to load the goods onto the
means of transport which take the goods.
- If the goods are delivered outside of a place under the control of the seller
such as a seaport or an airport, the seller is obliged to deliver the goods to that
point, the buyer will be responsible for loading the goods from the seller's
vehicle and all risks and expenses thereafter.
 Obligations
Seller's obligations:
 The seller must deliver the goods with the commercial invoice and other
documents specified in the contract.
 Assist buyers in obtaining transport documents if required by buyers
 If the place of receipt is in the seller's warehouse, the seller is responsible for
loading the goods on the carrier's means of transport nominated by the buyer. If
the place of receipt is outside the seller's warehouse, the seller must arrange for
the transportation of the goods to the point of delivery.
 The seller will be responsible for clearing the goods for export, assist with import
clearance
 If so requested by the buyer, the seller may hire a means of transport under the
usual terms.
Buyer’s obligations:
 The buyer must receive the goods from the seller within the specified time,
transport and clear the goods for import.
 Buyer will be responsible for customs clearance of imported goods.
Regarding the delivery of goods:
FCA Incoterms 2020 has 2 transfer points.
The first place is a point in the control of the seller such as a warehouse, factory, etc.
The handover is considered complete when the goods are transferred to the carrier
nominated by the buyer by loading the goods onto the consignee's means of transport.
The second location is a location outside the control of the seller such as a seaport or
an airport. In these cases, the delivery of the goods is deemed complete when the
carrier nominated by the buyer has loaded the goods on his means of transport.The
seller's obligation is only to bring the goods to this location on his vehicle ready for
unloading, while unloading from the seller's vehicle is the initiation of the buyer's
responsibility.
 Cost
Seller:
Pay all the cost until delivery.
 Expenses for carrying out export and import procedures.
 Cost of carriage and delivery to the carrier nominated by the buyer.
 Expenses for applying for export licenses or other certificates, paying taxes, and
other export costs if any.
 Costs incurred in the event of tariff or non-tariff barriers affecting the export of
goods.
 Cost of preparing and providing necessary documents to the buyer.
 The cost of informing the buyer whether the goods have been delivered to the
carrier.
 Loading costs if the pickup location is in the seller's warehouse or premises.
Buyer:
 Pay from the time goods delivered. All costs for assistance on getting carriage,
insurance, delivery, and customs documentation. Pay duties and taxes for import
or transit. Any additional cost if the carrier is not nominated or carrier fails to
collect goods.
 All costs related to the importation and transportation of the goods from the time
the nominated carrier receives the goods from the seller.
 Any costs incurred in connection with failure to comply with the obligation to
receive delivery at the place and time agreed in the contract.
 Customs clearance, taxes and other fees.
 Any fees incurred when not receiving the goods.
 The cost of loading the goods on the vehicle if the pickup location is outside the
warehouse or the seller's premises.
 Risk
Seller:
All risk of loss or damage until goods have been delivered.
Buyer:
All risk of loss or damage from the time agreed for delivery or end of the period
agreed for delivery. If the buyer fails to nominate a carrier, or if the carrier doesn’t
pick up the goods, the risk is under the buyer.
 Mode of transport
FCA can be used for any mode of transportation or a combination (multimodal)
Actually used a lot for air line.
Goods shipped by container should use this condition instead of FAS, FOB

3. FAS (Port of Shipment) – Free Alongside Ship

 Definition
With FAS, the seller takes over the export and transport of the goods to the alongside
of the transport ship that nominated by buyer (for example, on a wharf or on a barge)
at the agreed port of shipment.
 Obligations
Seller's obligations:
 Deliver the goods alongside the ship nominated by the buyer with the
commercial invoice and other documents specified in the contract.
 Inform the seller in advance of the possible delivery time.
 If the buyer requests, help the buyer with the necessary documents for the
import.
 Export clearance.
Buyer Obligations:
 Pay for the goods according to the commercial invoice of the shipment.
 Hire a means of transport for international transport, inform the seller of the
ship's information and the time of receipt of the goods.
 If the seller requires, get the seller the necessary documents for export.
 Import clearance.
Regarding the delivery of goods:
With FAS Incoterms 2020, the delivery of goods is considered complete when the
seller brings the goods to place the alongside the nominated vessel or purchases the
goods on similar terms.
 Cost
Seller:
 Pay all the cost until delivery.
 All export taxes and export clearance costs
Buyer:
 Pay from the time goods delivered.
 All costs related to permits, taxes, import clearance and transit through other
countries.
 Expenses for hiring means of transporting goods, costs of loading and
unloading and transporting goods from the place of unloading to the place of
storage of goods.
 All costs incurred if the contract obligations are not fulfilled.
 Risk
Seller:
All risks of loss of or damage to the goods up to the time they have been delivered.
The process of bringing the goods to the place of loading at the named port of
shipment where the goods are to be transferred by wharf or barge onto the carrier.
Buyer:
The place of delivery will always be where the risk passes to the buyer. Buyer bears
all risks from place of discharge to place of storage delivery.
All risk of loss or damage from the time agreed for delivery or end of the period
agreed for delivery. If the buyer fails to nominate a carrier, or if the carrier doesn’t
pick up the goods, the risk is under the buyer, or stop loading the goods earlier than
the notice period.
 Mode of transport
This term applies only for ocean or inland waterway ports. If the goods are handed to
the carrier in a container terminal, FCA is a more appropriate term.

4. FOB ( Named port of loading ) - Free on board

 Defination
Free on Board (FOB) is a term used to indicate who is liable for goods damaged or
destroyed during shipping.
- Whose responsibility is the delivery?
The seller is responsible for bringing the goods from the seller's warehouse to the port
 Cost
Seller:
 Cost of export procedures
 Cost of customs declaration, tax
 Additional fees
Buyer:
 Pay for the goods to the seller
 The costs to the paid by the buyer for the carriage of the goods to the final
destination include freight, insurance (if any), taxes and incidental surcharges.
 Risk
- The risk of the goods passes from the seller to the buyer when the goods have been
loaded on board the vessel.
- If the ship at the port of departure is delayed, the seller must bear all costs incurred.
 Mode of transport
- FOB was used only to refer to goods transported by ship.

5. CFR ( named port of destination ) - Cost and freight

 Definition
Cost and freight (CFR) is a legal term used in foreign trade contracts. In a contract
specifying that a sale is cost and freight, the seller is required to arrange for the
carriage of goods by sea to a port of destination and provide the buyer with the
documents necessary to obtain them from the carrier. With a cost and freight sale,
the seller is not responsible for procuring marine insurance against the risk of loss
or damage to the cargo during transit
- Whose responsibility is the delivery?
The seller must deliver the goods, the commercial invoice and the goods documents
 Cost
Seller:
 Shipping fee from warehouse to port of departure
 Loading fee on board
 Local charge port of departure
 Charges for unloading the goods from the vessel at the port of destination, if any,
included in the contract of carriage with the carrier
 Costs related to procedures and permits to export goods
 Taxes, export fees
 Fees for hiring means of transport to the port of destination
 Fee for delivery of the shipping document to the buyer at the port of destination
and its electronic copy
 Transit fee if any
 Cost of quality control, weight, quantity
 Packaging & marking
Buyer:
 Costs for import procedures
 The cost of making goods at the port and transporting them to the warehouse
 All costs at the port of destination (Local charges) minus the fee paid by the seller
 Taxes, import and transit fees if applicable
 Costs incurred due to the buyer's failure to promptly or accurately notify the
seller of the time and place of receipt of the goods
 Expenses for pre-export inspection procedures if these are not within the
jurisdiction of the exporting country
 Refunds paid by the seller in assisting the buyer to bring the goods to the buyer's
destination
 Charges incurred if the carrier is not assigned or the carrier is unable to pick up
the goods
 Insurance fee if needed
 Risk

Seller: Bear all risks of loss/damage until completion of delivery of the goods
 Buyer: All risks of loss/damage from the time of delivery or the end of the agreed
delivery time. If the buyer fails to notify the port of destination, the risk is on the
buyer.
 Mode of transport
- CFR is used for sea and inland waterway transport

6. CIF (named port of destination) - Cost, Insurance and Freight

 Definition
- CIF is an international shipping agreement, which means that the seller is
responsible for customs clearance of the goods at the port of departure, delivering the
goods on board the vessel.
- The seller is responsible for delivery.
 Obligations
Seller’s obligation:
 Goods, commercial invoice and documentation.
 Packing and marking, tally of goods.
 Export licenses and customs formalities.
 Delivery to the port of designation.
 Buy insurance for goods with minimum insurance coverage.
Buyer’s obligation:
 Payment for goods as in the sales contract.
 Import goods at the port of destination.
 Import formalities and duties.
 Bear all risks and costs when the seller delivers the goods on board.
 Cost
Seller:
 Any costs incurred before the goods are delivered.
 Pay taxes and export charges.
 Pay fee of the minimum insurance coverage.
Buyer:
 Pay for the goods to the seller.
 Cost of import taxes and other costs incurred.
 Risk
- The risk of the goods passes from the seller to the buyer when the goods are loaded
on board the vessel.
- The seller is also responsible for insuring to cover the risk of loss or damage during
carriage.
 Mode of transport
- CIF can use for sea or inland waterway.

7. CPT (named place of destination) - Carriage paid to

 Definitions
- CPT means that the seller delivers the goods to the carrier or a person nominated by
the seller at the named place, the seller must contract and pay the costs of carriage
necessary to bring the goods to the named place of destinations.
- CPT stipulates that the seller is responsible for all expenses and risks of the
transportation of goods.
 Obligations
Seller’s obligation:
 Responsible for delivering the goods to the carrier at the place of delivery on the
agreed date or time.
 Responsible for damage or loss of the goods until they are handed over to the
carrier at the named place and within the specified time.

Buyer’s obligation:
 Takes responsibility for damage or loss of goods from the time they have been
handed over to the carrier.
 Buyer has to carry out and pay for import clearance, as well as assist the seller
with export clearance.
 Cost
Seller:
 All costs relating to the goods and their transport until delivery to the carrier.
 The costs of export clearance.
 Costs incurred by the buyer related to export formalities.
Buyer:
 All costs relating to the goods and their transport from the moment they were
handed over to the carrier.
 Unloading costs.
 Import clearance and transit costs.
 The costs incurred by the seller in connection with the import procedures.
 Risk
- The risk of damage or loss to the goods is transferred from the seller to the buyer as
soon as the goods have been delivered to the carrier.
 Mode of transport
- CPT is used for all modes of transport, including multimodal transport.

8. CIP (named place of destination) - Carriage and Insurance paid to

 Defination
CIP is a method whereby the seller delivers the goods to the carrier at the agreed place
and the seller contracts for carriage and pays all costs of carriage necessary to delivers
the goods to the named place.
- Whose responsibility is the delivery?
The seller will be responsible for hiring a means of transport, paying the freight to
bring the goods to the named place.
 Cost
Sellers:
 Costs associated with bringing the goods to and delivering them to the first carrier
 Cost of delivery to the destination according to the signed contract
 Cost of export procedures
 Cost of transferring documents to the buyer
 Shipping costs through transit countries under the contract of carriage
 Cargo insurance cost
Buyers:
 The costs related to the goods (except for the costs of export clearance to be
borne by the seller and the costs already included in the contract of carriage) after
the first carrier receives the goods.
 Cost of making goods at the port of destination and transporting them to the
warehouse
 Local charges at the port of destination minus the costs paid by the seller to the
carrier
 Expenses incurred due to the buyer's failure to promptly or accurately notify the
seller of the time and place of receipt of the goods.
 Expenses related to pre-export inspection of goods unless such procedures are
borne by the competent authority of the exporting country
 Obligations
Seller's obligations:
 Delivery in accordance with the provisions of the contract.
 Bear all risks and losses of the goods before they are delivered to the first carrier.
 Notify the buyer when the goods are ready, when the goods are delivered for
transport and reached the agreed destination.
 Proper packaging to ensure the safety of the goods during transit.
 Sign the contract of carriage, deliver the goods to the first carrier
 Sign a contract for cargo insurance for the duration of the goods being transported
 Export customs clearance, provide information and documents for buyers to
complete import procedures.
 Provide the buyer with the invoice, general transport document and insurance
policy or any other proof of insurance purchase.
 Required documents: Commercial invoice, transport document, export license,
certificate or insurance policy.
Buyer’s obligations:
 Accept delivery when the goods have been delivered to the first carrier when the
buyer has received the invoice, cargo insurance policy or any other relevant
import and export documents.
 Responsible for all risks and losses occurring to the goods from the time they are
delivered to the first carrier.
 Carry out procedures for importing goods and bear all costs related to customs
clearance.
 Inform the seller of the exact place of destination in the port of destination and
the time of receipt.
 Documents: other documents for transit through 3rd countries and through import.
 Risk
- When does risk of goods pass from seller to buyer?
The seller will transfer the risk to the buyer as soon as the goods are successfully
transferred to the first carrier, that is, the risk will be transferred from within the
territory of the exporting country of the seller.For any form of transportation, the
seller must complete unloading from the domestic means of transport and loading the
goods onto the primary means of transport. Only then will the risk transfer from the
seller to the buyer be completed.
 Mode of transport
CIP applies to all modes of transport (rail, road, air, sea).

9. DAP (named place of destination) - Delivered at Place.

 Defination
The seller delivers when the goods are placed at the disposal of the buyer on the
means of transport, ready for unloading at the named place of destination. The seller
bears all risks involved in bringing the goods to the named place of destination.
- Whose responsibility is the delivery?
The seller delivers the goods to a place specified by the buyer.
 Cost
Sellers
 All costs relating to the carriage of the goods until they are delivered, except for
costs to be borne by the seller such as import clearance costs.
 Cost of export procedures
 The cost of unloading the goods at the destination if they are part of the contract
of carriage concluded by the seller.
 The cost of delivering the documents to the buyer.
Buyers
 Cost of carrying out import procedures: import tax, applying for an import license,
other costs if problems related to permits arise.
 Costs associated with the goods from the time of receipt.
 Unloading costs if this cost is not included in the contract of carriage signed by
the seller.
 Obligations
Seller’s obligations:
 Sign a contract of carriage to bring the goods to the specified destination.
 Packing and marking, tally of goods.
 Carrying out procedures for exporting goods.
 Deliver the goods with the commercial invoice and other documents specified in
the contract at the specified place and time.
 Bear all risks and costs until the goods are delivered.
Buyer’s obligations:
 Pay for the goods according to the commercial invoice of the shipment.
 Inform the seller of the time and place to be ready to receive the goods.
 Do import procedures for the shipment.
 Receive goods at the place and time as the contract.
 Take all responsibility for the goods from the time of receipt.
 Buyers do not need to purchase insurance. However, if the seller requires
information necessary to obtain insurance, it is at the buyer's risk and expense to
provide such information to the seller.
 Risk
- When does risk of goods pass from seller to buyer?
From seller to buyer from the moment when the seller completes delivery of the
goods at the agreed place and unloads the goods from the means of transport.
 Mode of transport
DAP applies to all modes of transport (rail, road, air, sea).
10. DPU (named place of destination) – Delivered at place unloaded
 Definition
DPU - Delivered at place unloaded means that the seller delivers goods when the
goods are placed at the disposal of the buyer unloaded from the means of transport at
the named place of destination. The seller bears all risks involved in bringing the
goods to the named place and unloading them from the means of transport.
- Whose responsibility is the delivery?
Delivery is the responsibility of the seller
 Obligations
Seller's obligations:
 Sign a contract of carriage to bring the goods to the specified destination.
 Packing and marking, tally of goods.
 Carrying out procedures for exporting goods.
 Deliver goods with commercial invoice and other documents specified in the
contract at the specified place and time.
 Bear all risks and costs until the goods are delivered.
 Unload the goods from the vehicle at the place of delivery.
Buyer’s obligations:
 Pay for the goods according to the commercial invoice of the shipment.
 Inform the seller about the time and place to be ready to receive the goods.
 Do import procedures for the shipment.
 Receive goods at the place and time as the contract.
 Take all responsibility for the goods from the time of receipt.
 Buyers do not need to buy insurance. However, if the seller requires information
necessary to obtain insurance, it is at the buyer's risk and expense to provide such
information to the seller.
 Cost
Sellers:
 Expenses for export procedures
 All costs related to the carriage of the goods until delivery, except costs to be
borne by the seller such as import clearance costs.
 The cost of unloading the goods at the delivery point.
 The costs of delivering documents to the buyer.
Buyers:
 Pay for the goods to the seller
 Expenses for carrying out import procedures: import tax, import license, other
costs if problems related to permits arise.
 All costs related to the goods from the time of receiving the goods.
 Costs incurred on the seller's part in connection with import procedures in the
importing country
 Risk
The risks transfer from sellers to buyers when the goods are placed at the disposal of
the buyer on the arriving means of transport ready for unloading at the named place of
destination
The seller shall bear all risks of loss of or damage to the goods until they have been
delivered to the named place and unloaded from the means of transport within the
time specified in the contract.
Buyer bears all risks of loss or damage to the goods from the time of delivery.
If the buyer fails to perform his obligations in relation to import clearance, the buyer
bears all risks of the goods.
If the buyer fails to give the seller sufficient notice of the change in the time of receipt
or the place of receipt (where the buyer is entitled), the buyer bears all risks of the
goods from the date specified. or the last day of the specified period for delivery.
 Mode of transport
Can be used for all modes of transport and can be used when multiple means of
transport are involved.

11. DDP (named place of destination) – Delivered duty paid

 Definition
DDP means that the seller delivers when the goods have been cleared for import,
placed at the disposal of the buyer on the means of transport and ready for unloading
at the named place of destination.
 Obligations
Seller's obligations:
 Sign a contract of carriage to bring the goods to the specified destination.
 Packing and marking, tally of goods.
 Carrying out procedures for exporting goods.
 Carrying out procedures for importing goods.
 Deliver goods with commercial invoice and other documents specified in the
contract at the specified place and time.
 Bear all risks and costs until the goods are delivered.
Buyer’s Obligations:
 Pay for the goods according to the commercial invoice of the shipment.
 Inform the seller about the time and place to be ready to receive the goods.
 Help the seller get the necessary documents for customs clearance.
 Receive goods at the place and time as the contract.
 Take all responsibility for the goods from the time of receipt.
 Buyers do not need to buy insurance. However, if the seller requires information
necessary to obtain insurance, it is at the buyer's risk and expense to provide such
information to the seller.
Regarding the delivery of goods:
Under the terms of DDP Incoterms 2020, the delivery of goods is considered
complete when the seller brings the goods to the point of delivery, at the buyer's
disposal, cleared for import and ready for unloading.
 Cost
Seller bears:
 Expenses for carrying out export and import procedures.
 All costs related to the transportation of goods until delivery.
 The costs of obtaining the necessary documents for import, can be obtained by
the buyer but must bear this cost
 The cost of unloading the goods at the point of delivery if it is included in the
contract of carriage
Buyer bears:
 Pay for the goods to the seller
 All costs related to the goods from the time of receiving the goods.
 Unloading costs if this cost is not included in the contract of carriage signed by
the seller.
 All costs incurred by the seller if the buyer fails to promptly assist in obtaining
the necessary documents for the seller's export and import procedures or does not
notify accurately the time and place of receipt. row.
 Risk
The seller bears all risks of loss of or damage to the goods until they have been
cleared for import and at the disposal of the buyer on arriving means of transport
ready for unloading at the named place.
The buyer bears all risks relating to the goods from the moment they are delivered by
the seller
If the buyer fails to assist the seller in obtaining export/transit/import related
documents, including security or inspection information required by the importing
country, the buyer will bear all risks. risks associated with such goods.
If the buyer fails to promptly notify the seller of the time and place of delivery, the
buyer bears all risks of the goods from the date of delivery or the last day of the
period specified for delivery.
 Mode of transport
This condition shall apply to all modes of transport and may be used when more than
one transport is involved.