INCOTERMS

Presented by Afat Aliyev

CONTENTS

What does Incoterm stand for?

Why are Incoterms important?
How to use the Incoterms 2010 rules?
Classification of the Incoterms 2010 rules
Major Incoterms used globally
What does Incoterm stand for?

Incoterms

International Commercial Terminations

Created by International Chamber of Commerce (ICC)

Standard trade definitions used in international sales contracts
Set of rules used for defining responsibilities of sellers and buyers
Are the Incoterms important?

For Sure!
Why are they important?

Set international rules for commonly used terms in foreign trade

Define obligations of both parties involved in the transaction
Determine the distribution & transfer risks of the goods delivered
from seller to buyer
State the sharing of expenses between the parties during transport
How to use the Incoterms 2010 rules?

Incorporate the Incoterms 2010 rules into your contract of sale

Choose the appropriate Incoterms rule

Specify your place or port as precisely as possible

Remember what Incoterms do and dont say

What Incoterms do and dont say?

Dont
Do say say
Carriage obligations The price to be paid

Insure arrangements The method of its

payment
Costs each party is
responsible for Transfer of ownership of
the goods

Consequences of a
breach
Classification of the Incoterms 2010 rules

The 11 Incoterms 2010 rules are divided into 2 classes:

Rules for any mode or modes of transport
Rules for sea & inland waterway transport

1st Class 2nd Class

EXW Ex Works
FCA Free Carrier
CPT Carriage Paid to
CIP Carrier and Insurance Paid
to
DAT Delivered at Terminal
FAS Free Alongside Ship
FOB Free on Board
CFR Cost and Freight
CIF Cost, Insurance and Freight

DAP Delivered at Place

DDP Delivered Duty Paid

EXW Ex Works

May be used irrespective of the mode(s) of transport selected

Suitable for domestic trade
The seller delivers when it places the goods at the sellers premises
The seller does not need to load the goods on any collecting vehicle

The seller does not need to clear the goods for export
FCA Free Carrier

May be used irrespective of the mode(s) of transport selected

The seller delivers the goods to the carrier nominated by the buyer

The seller delivers the goods to the carrier nominated by the buyer
The seller has obligation to clear the goods for export
CPT Carriage Paid to

May be used irrespective of the mode(s) of transport selected

The seller delivers the goods to the carrier nominated by the seller
The seller must contract for and pay the costs of carriage
DAT Delivered at Terminal

May be used irrespective of the mode(s) of transport selected

The seller delivers when the goods are placed at the disposal
(use) of the buyer at a named terminal
The seller is responsible for the goods till the point of Delivery
The seller has obligation to clear the goods for export
DAP Delivered at Place

May be used irrespective of the mode(s) of transport selected

The seller delivers when the goods are placed at the disposal
(use) of the buyer on the arriving means of transport
The seller bears all risks in bringing the goods to the named place
The seller doesnt need to recover costs related to unloading at
the place
FAS Free Alongside Ship

May be used only for sea or inland waterway transport

The seller delivers when the goods are placed alongside the ship
nominated by the buyer
The buyer bears all costs & risks from that moment onwards
The seller has obligation to clear the goods for export
FOB Free on Board

May be used only for sea or inland waterway transport

The seller delivers when the goods are placed alongside on board
the ship nominated by the buyer
The buyer bears all costs & risks from that moment onwards
The seller has obligation to clear the goods for export
Discussion

FCA De Ruijterkade 7. 1013 AA Amsterdam Incoterms 2010

FAS Pos Umerzak Aktau, Mangystau 466200 Incoterms 2010
Thanks for the Attention!