INCOTERMS (internationally Commercial of term, dt.: International commercial clauses) are a number of international rules for the interpretation of specified trading terms in the foreign trade.

For the first time the Incoterms was set up by the international Chamber of Commerce (international Chamber OF Commerce, ICC) 1936, in order to create a common basis for the international trade. They regulate above all the way of the supply of goods. The regulations specify, which transport costs of the salesmen, whom the buyer has to carry and who carries the financial risk in case of a loss of the commodity. The Incoterms gives however no information over it when and where the property at the commodity turns into from the salesman on the buyer. The conditions of the Incoterms are marked by indication of the year. Up-to-date the Incoterms applies 2000 (6. Revision).

The 13 rules are recognized in right traffic, by businessmen, governments and courts. The acknowledgment by courts takes place however only during inclusion into a contract. The Incoterms does not have a legal power, is however considered as usage, which is accepted by the Contracting Parties.

The use of the Incoterms in the contract (by indication of contraction of the clause and the respective place) is voluntary, should be taken up however, in order to exclude possible misunderstandings and disputes. Here an example of the application of one such clause in a sales contract: Our prices understand themselves FOB Hamburg.

The Incoterms is used also in different statistics: In the foreign trade statistics for export the FOB value is always indicated, for imports always the CIF value. In the balance of payments statistics both with export and with the imports the FOB value is used.

Organization

Incoterms are divided into four groups. The sequence of the groups is to demonstrate the rising responsibility for the goods which can be supplied on the part of the salesman.

E-clause: Fetching clause, the transport costs and - risks are to be carried from the buyer to.

F-clause: The main transport costs and - risks are to be carried from the buyer to.

C-clause: The main transport costs are of the salesman, the risks are from the buyer to to be carried.

D-clause: Arrival clause, the transport costs and - risks are to be carried from the salesman to.

E-clause - the fetching clause

EXW (ex works): ex factory

The salesman is obligated only to it to place the commodity on its property (factory, camp, work) ready. The buyer bears all cost of transport, insurance and export. The danger of loss and damage turns into with supply in the agreed upon place on the buyer. The carrier must load the material, because if the client causes a damage with inviting, then the insurance does not cling.

F-clauses - main transport of the salesman does not pay

FCA (free carrier): freely carriers

The FCA clause obligates to free the salesman the commodity for a carrier at the designated place too handed over and for export. The buyer of this time offers the costs and dangers of transport.

CHAMFER (free alongside ship): freely long side ship

The chamfering clause is a modification of the FCA clause. The salesman does not have to supply the commodity however to a designated carrier with at a certain place, but a certain ship to turn off. The buyer bears the cost and dangers of transport.

FOB (free on board): freely on board

In the trade by sea or inland waterway craft the salesman is obligated with the FOB clause in extension of the chamfering clause to bring the commodity on board the agreed upon ship. Starting from exceeding of the ship railing the obligation to the cost carrying, as well as the danger of transport turn into on the buyer.

C-clauses - main transport of the salesman pays

CFR (cost and freight): Costs and freight

The CFR clause is used in the case of transport with the ship. The salesman must only ensure that the commodity arrives in normal condition over the railing at the ship, i.e. ignores the danger of the damage or destruction on the ship on the buyer. To pay the salesman has however costs and freight (including export), which result up to the supply to the goal port. The CFR clause covers itself to that extent with the CIF clause, which contains however still another insurance which can be locked by the salesman. The insurance covers thereby the straight transport risk. One does not transport by ship, the CPT clause is applicable.

CIF (cost, insurance, freight): Costs, insurance, freight

The CIF clause is one in the overseas business frequently used transportation clause, according to which the salesman for costs up to the supply, insurance and freight charges arises (English cost, insurance, freight). The salesman must accomplish the customs clearance in the exporting country. According to German right also the achievement place is determined by this clause. Therefore the shipping port is the achievement place. The danger of the coincidental fall therefore turns into on the buyer, if the salesman delivered the commodity on the ship (transaction with additional assumption of Cost, Insurance, Freightcharges corresponds to a FOB). This means that the salesman is no longer responsible for a damage or a destruction of the commodity during transport. The buyer must turn then to the insurance locked by the salesman, which offers however only one minimum of insurance protection, if not the conclusion of a large insurance were agreed upon. If transport does not take place by ship, the CIP clause is possible.

CPT (carriage paid tons"…): Freight-free

Freight-free it means that the salesman bears the cost of transport. The buyer bears all remaining cost (tariffs, taxes, deliveries, customs formalities). The danger of loss and damage turn into with delivery to the carrier on the buyer.

CIP (carriage and insurance paid ton"…): freight-free insures

This clause obligates the salesman to bear the cost of transport ("“freight-free"”, the buyer bears the further cost e.g. also the tariff - like CPT) and an insurance for transport to lock and pay ("“insures"”). The danger of the damage or the loss carries then the buyer starting from the delivery to the carrier; the buyer receives however in the case of damage replacement from the insurance. The salesman is however only obligated without further agreement to lock an insurance with minimum covering.

D-clauses - arrival clauses

DAF (delivered RK more frontier): supplied border

With the DAF clause the salesman commits himself to supply and to the buyer at the disposal put the commodity on a means of transport up to the border.

(Delivered ex ship): supplied starting from ship

With the the clause the salesman is obligated to transport the commodity by ship to the goal port. It is no longer responsible however for unloading. Cost and danger bears the buyer starting from unloading.

DEQ (delivered ex quay): supplied starting from dock

With the DEQ clause the salesman must make the commodity available supplied by ship still unloaded (to leave) and at the dock. Danger and costs turn into only there on the buyer.

DDU (delivered duty unpaid): supplied duty-free

The DDU clause obligates to free and at the certain place on a means of transport make the salesman available the commodity for the import. However the buyer must pay the tariff. It must settle also all formalities.

Strip packing (delivered duty paid): supplied declares

The strip packing clause is the most favorable for the buyer. The salesman must bear all cost and dangers of transport as far as the place of destination, including the tariff.

Related links

• Encyclopedia with light man
• Specialized information of the German transportation insurers

Articles in category "INCOTERMS"

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