INCO Terms

Incoterms

Incoterms, also known as Terms of Sale, are standardized international trade definitions. They are commonly used in international contracts and are typically reflected on sales invoices. These terms help ensure that buyers and sellers clearly understand each other’s responsibilities, risks, and obligations. Incoterms were created by the ICC (International Chamber of Commerce) and are protected by ICC copyright.

On the side, you will find a chart of responsibilities applicable to the purchase and sale terms used in international trade, as announced by the International Chamber of Commerce in its updated 2000 version.

In addition, a definition for each term is provided below.

13 Terms

  • EXW – Ex Works (named place)
  • FCA – Free Carrier (named place)
  • FAS – Free Alongside Ship (named place)
  • FOB – Free On Board (named port of shipment)
  • CFR – Cost and Freight (named port of destination)
  • CIF – Cost, Insurance and Freight (named port of destination)
  • FCA – Free Carrier (named place)
  • CPT – Carriage Paid To (named place of destination)
  • CIP – Carriage and Insurance Paid To (named place of destination)
  • DAF – Delivered at Frontier (named place)
  • DES – Delivered Ex Ship (named port of destination)
  • DEQ – Delivered Ex Quay (named port of destination)
  • DDU – Delivered Duty Unpaid (named place of destination)
  • DDP – Delivered Duty Paid (named place of destination)

EXW – Ex Works

The seller’s obligation ends when they deliver the goods, cleared for export, to the carrier (any mode of transport) nominated by the buyer at the named place.

The buyer must contract, at their own expense, for the carriage of the goods from the named place.

The buyer must clear the goods for import.

FAS – Free Alongside Ship

The seller’s obligation and risk are fulfilled when the goods are delivered alongside the vessel at the named port of shipment.

The buyer must contract, at their own expense, for the carriage of the goods from the named place.

The buyer must clear the goods for import.

FAS – Free Alongside Ship

The seller’s obligation and risk are fulfilled when the goods are delivered alongside the vessel at the named port of shipment.

The seller must clear the goods for export.

This term is used for sea or inland waterway transport only.

The buyer is responsible for all costs and risks involved in transporting the goods to the destination once the cargo is delivered alongside the vessel.

The buyer must clear the goods for import at the final destination.

FOB – Free On Board

The seller’s obligation is fulfilled when the buyer has been notified and the goods have passed over the ship’s rail on board the vessel at the named port.

The buyer is responsible for all costs and risks associated with the goods after they have passed over the ship’s rail and have been loaded on board the vessel at the named port.

The buyer is responsible for arranging the carriage of the goods from the named port of shipment.

The seller is required to arrange the export clearance of the goods.

The buyer is responsible for arranging the import clearance of the goods.

CFR – Cost and Freight

The seller’s obligation is fulfilled when the goods are delivered to a carrier, pass the ship’s rail, and the contract of carriage is arranged, with freight prepaid, to the named port.

The seller is responsible for arranging the carriage of the goods.

The seller is responsible for the export clearance of the goods.

The buyer is responsible for the import clearance of the goods.

CIF – Cost, Insurance and Freight

The seller’s responsibility is fulfilled when the goods are delivered to a carrier, pass the ship’s rail, the contract of carriage is arranged with freight prepaid to the named port, and insurance is obtained on the cargo.

The seller is responsible for arranging the carriage of the goods.

The seller is responsible for the export clearance of the goods.

The buyer is responsible for the import clearance of the goods.

CPT – Carriage Paid To

The seller’s responsibility is fulfilled when the goods are delivered to a carrier, pass the ship’s rail, the contract of carriage is arranged with freight prepaid to the named port, and insurance is obtained on the cargo.

The seller is responsible for arranging the carriage of the goods.

The seller is responsible for the export clearance of the goods.

The buyer is responsible for the import clearance of the goods.

CIP – Carriage and Insurance Paid To

The seller’s obligation is fulfilled when the goods are delivered to a carrier, and the contract of carriage is arranged, with freight prepaid, to the named place of destination, and insurance is obtained on the cargo.

The buyer is responsible for all costs and risks associated with the goods after receipt by the carrier, prior to loading on board the vessel or aircraft, as well as the costs and risks related to the goods upon arrival in the importing country.

The seller is responsible for arranging the carriage of the goods.

The seller is responsible for the export clearance of the goods.

The buyer is responsible for the import clearance of the goods.

DAF – Delivered At Frontier

The seller’s obligation ends when they have delivered the goods to the disposal of the buyer on the arriving means of transport, not unloaded, cleared for export but not cleared for import, at the named point and place at the frontier, before the customs border of the adjoining country.

The buyer is responsible for customs clearance, duties, taxes, and delivery to the final destination in the country of import.

DES – Delivered Ex Ship

The seller’s obligation ends when they have delivered the goods to the disposal of the buyer on board the ship, cleared for export but not cleared for import, at the named port of destination before discharge.

The buyer is responsible for customs clearance in the country of import and all charges for discharging the goods from the ship.

DEQ – Delivered Ex Quay

The seller’s obligation ends when they have delivered the goods to the disposal of the buyer on board the ship, cleared for export but not cleared for import, at the named port of destination after discharging the goods from the vessel onto the quay (wharf).

The buyer is responsible for clearing the goods for import and paying all formalities, duties, taxes, and other charges upon import.

DDU – Delivered Duty Unpaid

The seller’s obligation is fulfilled when the goods have been made available to the buyer at the named place of destination, uncleared for importation.

The buyer is responsible for all costs and risks associated with the goods upon importation at the named place of destination.

The seller is required to arrange the entire carriage to the named place of destination.

The seller is required to arrange the export clearance of the goods.

The buyer is responsible for the import clearance of the goods, including the payment of any applicable duties, taxes, and fees.

DDU – Delivered Duty Unpaid

The seller’s obligation is fulfilled when the goods have been made available to the buyer at the named place of destination, uncleared for importation.

The buyer is responsible for all costs and risks associated with the goods upon importation at the named place of destination.

The seller is required to arrange the entire carriage to the named place of destination.

The seller is required to arrange the export clearance of the goods.

The buyer is responsible for the import clearance of the goods, including the payment of any applicable duties, taxes, and fees.

DDP – Delivered Duty Paid

The seller’s obligation is fulfilled when the goods have been made available to the buyer at the named place of destination, cleared for importation.

The buyer is responsible for taking delivery of the goods from the named place of destination.

The seller is required to arrange the entire carriage to the named place of destination.

The seller is required to arrange the export clearance of the goods.

The seller is required to arrange the import clearance of the goods, including the payment of any applicable duties, taxes, and fees.