Incoterms 2010

We have updated the list of INCOTERMS according to the recently launched new rules. The new INCOTERMS 2010 will come into force from January 1st 2011.

Incoterms provide a set of international rules for the interpretation of the most commonly used terms in foreign trade. This helps to reduce uncertainties of different interpretations of these terms and reduce the risks that these interpretations carry with them.

Group E

Exporter makes the goods available at his premises

 EXW – Ex Works                         
Group C

Exporters contracts the carriage                                  


Group E

Ex Works (name placed)
Seller’s obligation fulfilled when:
- Makes the goods available at the premises to the buyer

The buyer bears all the costs and risks involved in taking the goods from the seller’s premises to the desired destination.

Ex Works represents the minimum obligation for the seller.

It is not recommended to use Ex Works when the buyer cannot carry out directly the export formalities. In such circumstances FCA (link it with FCA) is recommended.

Group F

FCA – Free Carrier (named place)
Seller’s obligation fulfilled when:
- Hands over the goods into the charge of the carrier name by the buyer at a the named place
- Clears the goods for export

If not precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier shall take the goods into his charge. If the delivery occurs at the seller’s premises the seller is responsible for loading. If delivery occurs at any other palace, the seller is not responsible for unloading.

When the seller’s assistance is required in making the contract with the carrier, the seller may act at the buyer’s risk and expense.
For the purposes of FCA, carrier means any person who, in contract of carriage, undertakes to perform the carriage by rail, sea, air, inland waterway of by a combination of such modes. If the buyer instructs the seller to deliver the cargo to a person, the seller is deemed to have fulfilled his obligation to deliver the goods when they are in the custody of that person.

FAS – Free Alongside Ship (named port of shipment)
Seller’s obligation fulfilled when:
- The goods have been placed alongside the vessel on the quay or in lighters at the names port of shipment
- Clear the goods for export

The buyer has to bear all the costs and risks of loss f, or damage to, the goods from that moment.

FOB – Free on Board (names port of shipment)
Seller’s obligation fulfilled when:
- The goods have passed over the ship’s rail at the named port of shipment.
- Clear the goods for export
The buyer has to bear all the costs and risks of loss of, or damage to, the goods from that point.

When the ship’s rail serves no practical purpose, such in the case of roll-on / roll off or container traffic, FCA (include link) is more appropriate.

Group C

CFR – Cost and Freight (named port of destination)CFR
The seller must pay the costs and freight necessary to bring the goods to the names port of destination.

The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment.

CFR requires the seller to clear the goods for export.

This term can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purpose, such in the case of roll-on / roll off or container traffic, CPT (include link) is more appropriate.

CIF – Cost, Insurance and Freight (named port of destination)
The seller has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer’s risk of loss of, or damage to, the goods during the carriage.

The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIF term the seller is only required to obtain insurance on minimum coverage.

The buyer bears all risks of or damage to, the goods from the time they have passed the ship’s rail at the port of shipment.

CIF term requires the seller to clear the goods for export.

This term can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purpose such as in the case of roll-on/roll-off or container traffic, the CIP term is more appropriate to use.

CPT – Carriage Paid To (named place of destination)
The seller pays the freight for the carriage of the goods to the named destination.

The risk of loss of, or damage to, the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier.

‘Carrier’ means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage, by rail, road, sea, air, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier.

The CPT term requires the seller to clear the goods for export.

The term may be used for any mode of transport including multimodal transport.

CIP – Carriage & Insurance Paid to (named place of destination)
The seller has the same obligations as under CPT but with the addition that the seller has to procure cargo insurance against the buyer’s risk of loss of, or damage to, the goods during the carriage.

The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required only to obtain insurance on minimum coverage.

The CIP term may be used for any mode of transport including multimodal transport.

Group D

DAF – Delivered at Frontier (named place)
The seller fulfils his obligation to deliver when the goods have been made available, cleared for export, at the named point and place at the frontier, but before the customs border of the adjoining country.

The term ‘frontier’ may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term. Although primarily intended to be used when goods are to be carried by rail or road, the term may be used for any mode of transport.

DES – Delivered Ex Ship (named port of destination)
The seller fulfils his obligation to deliver when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination.

The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination.

The term can be used only for sea or inland waterway transport.

DEQ – Delivered ex Quay (Duty Paid) (named port of destination)
The seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay (wharf) at the named port of destination.
The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.

The buyer must clear the goods for importation and pay for all formalities, duties, taxes, and other charges upon import.

This term should not be used if the seller is unable directly or indirectly to obtain the import licence.

If the parties wish the buyer to clear the goods for importation and pay the duty, the words ‘duty unpaid’ should be used instead of ‘duty paid’. If the parties wish to exclude from the seller’s obligations some of the cost payable upon importation of the goods (such as Value Added Tax), this should be made clear by adding words to this effect: ‘Delivered ex quay, VAT unpaid (...named port of destination)’. This term can be used only for sea or inland waterway transport.

DDU – Delivered Duty Unpaid (named place of destination)
The seller fulfils the obligation to deliver when the goods have been made available at the named place in the country of importation.

The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out Customs formalities.

The buyer has to pay any additional cost and to bear any risks caused by his failure to clear the goods for import in time.

If the parties wish the seller to carry out Customs formalities and bear the cost and risks resulting there from, this has to be made clear by adding words to this effect.

If the parties wish to include in the seller’s obligations some of the costs payable upon importation of the goods (such as Value Added Tax), this should be made clear by adding words to this effect. ‘Delivered duty unpaid, VAT paid, (named place of destination)’.

This term may be used irrespective of the mode of transport.

DDP – Delivered Duty Paid (...named place of destination)
The seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation.

The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, cleared for importation. DDP represents the maximum obligation for the seller.

This term should not be used if the seller is unable directly or indirectly to obtain the import licence.

If the parties wish the buyer to clear the goods for importation and to pay the duty, the term DDU should be used. If the parties wish to exclude from the seller’s obligations some of the costs payable upon importation of the goods (such as Value Added Tax), this should be made clear by adding words to this effect: ‘Delivered duty paid, VAT unpaid (...named place of destination)’.

DAT - Delivered at Terminal (from 2011)  
The seller fulfills its responsability when the goods are made available to the buyer at a named terminal at the named port or place of destination.

The seller will bear all risks concerned in bringing the goods to and unloading them at the terminal at the named port or place of destination including export licences and other official authorisation to export, customs export formalities, carriage and insurance of the goods to the named terminal al the agreed port or place of destination and unload the goods. The seller will also have to bear the costs of checking, packaging and marking.

The buyer will have to bear the costs of obtaining import licences or other official authorisation to import, customs import formalities, take delivery of the goods and pre-shipment inspection, except when such inspection is mandated by the authorities of the country of export.

The seller have to clear the goods for export but not for import, nor pay any import duty or carry out any import customs formalities.


DAP - Delivered at Place (from 2011)
The seller fulfills its responsability when the goods are made available to the buyer on the arriving means of transport ready for unloading at the named place of destination.


The seller will bear all risks concerned in bringing the goods to and unloading them at the terminal at the named port or place of destination including export licences and other official authorisation to export, customs export formalities, carriage and insurance of the goods to the named terminal al the agreed port or place of destination and unload the goods. The seller will also have to bear the costs of checking, packaging and marking.

The buyer will have to bear the costs of obtaining import licences or other official authorisation to import, customs import formalities, take delivery of the goods and pre-shipment inspection, except when such inspection is mandated by the authorities of the country of export.



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