ICOTERM

Introduction
Icoterms servers to define , within the framework of an international
purchase and sale contract , the reciprocal rights and obligations of the
exporter and the importer establishing a standardizer set of definitions and
determining rules
incoterms (international commercial terms)or international trade terms are
contractual clauses applied in international purchases and sale transactions .
To use incoterms , it must be clearly specified in the sales contract , the
chosen incoterms rule ,the report , place or designated point, followed by
ʺicoterms 2020ʺthe choice of incoterm is an integral part of commercial
negotiations
 ICOTERM
(International commercial terms) which in Portuguese means icoterm these are
standardized rules that regulate different aspects of international trade. these are
rules that determine who pays the freight for the goods, their delivery point and
who must take out international insurance , among themselves . Incoterm are very
important so that the person who sells abroad can calculate all their expenses . We
can see these responsibilities illustratively in the ebook incoterms developed by
the marketing department of Allog international transport the publication brings
concepts and tips to help professionals with practical content about incoterms it is
important to mention that the rules determined by the rules determined by the
incoterms are only applied between exporters and importers , not being applied to
transport companies insurance companies and brokers .
According to their origin , incoterms were created in 1936 by the international
chamber of commerce , and their standards were updated several times based on
developments in the area of logistics and business strategies incoterms were created
to respond to various conflicts between exporters and importers , which occurred
due to misinterpretation in international contracts
ICOTERMS
The functions of incoterms is to define the rights and obligations of the
exporter and importer , establishing the responsibility and duties between
the buyer and seller . Main functions :
• location where the exporter must deliver goods;
• Who must pay the international shipping;
• Who must carry out and pay for export and import formalities;
• who should hire and pay for cargo insurance;
• What are the risk limits for each one (buyer and seller)
• Designated a person responsible for contracting the merchandise
insurance
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How many icoterms are there and what are their categories?
After the last update, which took place in 2010, we now have 11 incoterms divided into
categories E,F,C, and D.

CATEGORY E (EX)
represents the importers departure or obligation . The incoterm of this category is
presented by the letters EXW. when this acronym appears, it means that the importer is
responsible for picking up the goods at the manufactures address and assumes all costs .
ICOTERMS
Incoterm EX goods are made available to the buyer at sellers premises or in
another named place not cleared for export and not loaded on any
collecting vehicle , this term represents a minimum obligations for the
seller . The buyer bears all costs abd risks involved in removing the goods
from sellers establishment, provided that the purchase and sale agreement
contains an explicit clause in this regard , the risks and costs involved and
the loading of the goods at the exit may belong to the seller. EXW should
not be used if the buyer cannot be directly or indirectly responsible for the
export formalities , this term can be used in any mode of transport
CATEGORY F (free)
Represented by coterminous FAS,FOB or FCA . In this category the
exporter is not responsible for the main freight and international insurance ,
and the importer is responsible for contracting and paying for these
services.
ICOTERM
ICOTERM FAS
Seller terminates its obligations at the time the goods are placed alongside
the carrier ship ,on the pier or on vessels used for loading ,at the designated
shipping port , from that moment , the buyer assumes all risks and cots with
loading, freight payment, insurance and other expenses. The seller is
responsible for clearing the goods for export , this term only be used for
waterway transport (sea , river or lake
ICOTERM FOB
The seller terminates its obligations when the goods cross the rail of the
ship at the indicated port of embarkation and, at the same time from that
moment , buyer assumes all responsibility for damages, the delivery is
completed on board the ship designated by the buyer , when all expenses
are borne by the buyer . The seller is responsible for clearing the goods for
export . This term can be used exclusively in waterway transport
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CATEGORY C ( CARRIAGE)
In this case, it means Tatá the transport was paid for by the exporter . Incoterms are
represented by the abbreviation CFR,CIF,CPT and CIP. The exporter contracts and
pays for international freight , but it is importer who assumes responsibility for risks
and damages during international transport

ICOTERM CFR
In the incoterm CFR, seller is responsible for paying the costs necessary to place the
goods on board the ship, the seller is responsible for paying the freight to the
designated port of destination and also responsible for the export clearance . The
risks of loss or damage to the goods as well as any other additional costs , are
transferred from the seller to the buyer at the time the goods cross the ship wall, if
they want to protect themselves, the buyer must contract and pay the goods insurance
. Clause that can be waterway transport (maritime , river or lake)
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ICOTERM CIF
Responsibility for the merchant is transferred from the seller to the buyer at the
time of transposition of the ship`s rail at the port shipment , the seller is responsible
for paying the costs and freight necessary to take the goods to the indicated port of
destination , the buyer must receive the goods at the port of destination and ,
thereafter , be responsible for all expenses . The seller is responsible for clearing the
goods for export , and must contract and pay the main transport insurance premium .
The insurance paid by the seller has minimal coverage , so that it is up to the buyer
to assess the need for additional insurance , the risks from the delivery are the
buyer`s . Clause that can be used exclusively in waterway transport
ICOTERM CPT
the seller contracts and pays freight to take the goods to the designated place of
destination , from the moment the goods are delivered to the custody of the carrier ,
the risks for loss and damage are transferred from the seller to the buyer , as well as
possible additional costs that they may incur
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CATEGORY D (delivery)
As the name suggest , this is the category are DAP , DAT and DDP . It is when the
exporter assumes all the risks until delivery of the goods

INCOTERM DAP
when using incoterm dap the seller must clear the goods for export in their country ,
make the international transport and take the goods to the agreed place . The import
clearance at the place of destination , as well as the unloading of the goods , are in charge
of the buyer . The term DAP can be used for any mode of transport , from land and air to
sea , river or lake , the risk of transport in DAP is borne by the seller until reaching the
stipulated location . As soon as the goods leave the transport vehicle , the risks falls to
the buyer
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INCOTERM DAT
Delivered at terminal , the seller must clear the goods for export in their
country , carry out international transport , unload the goods and make them
available at the cargo terminal mentioned in contract , from the moment in that
the seller deposits the goods at the cargo terminal , his responsibility for them
ceases , as well as the risk on transport , which becomes the buyer`s . The term
DAT , or delivered at the terminal, can be contracted for any type of
international transport .

INCOTERMS DDP
The seller delivers the goods to the buyer cleared for important at the
designated destination , is the incoterm that establishes the highest degree of
commitment for the seller , in the in which it assumes all risks and costs
relating to transport and delivery of the goods at the designated destination this
term can be used for any means of transport
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IMPORTANCE are icoterm ?
Are important as they serve as guidelines for buying and selling products .
This means that these terms will serve as a guide for exporters and importers
to establish the guidelines for each contract .
Conclusion
The incoterms is to make available or provide foreign trade with a set of
international norms or rules that aim to facilitate the understanding and
interpretation of the terms used in purchase and sale contracts in international
trade.
Over pat decades , incoterms have been revised and updated in response to
logistical invocations and economic advances
However , the use of incoterms is not mandatory – neither for domestics nor
international trade . For a given transaction to be governed by the incoterms ,
there must be an express reference to them in the contract signed between the
buyer and seller
ICOTERMS-CONCLUSION
The incoterms is to make available or provide foreign trade with a set of
international norms or rules that aim to facilitate the understanding and
interpretation of the terms used in purchase and sale contracts in
international trade.
Over pat decades , incoterms have been revised and updated in response
to logistical invocations and economic advances
However , the use of incoterms is not mandatory – neither for domestics
nor international trade . For a given transaction to be governed by the
incoterms , there must be an express reference to them in the contract
signed between the buyer and seller