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Glossary of Terms and
Abbreviations (Incoterms 1990)
Incoterms are a set of
uniform rules codifying the interpretation of trade terms defining the
rights and obligations of both buyer and seller in an international transaction,
thereby enabling an otherwise complex basis for a sale contract to be
accomplished in three letters.
INCOTERMS
are designed to arrange for the transfer of responsibility from seller to
buyer at a convenient place where goods can be inspected. Hence FOB, CFR
(C&F) and CIF arrange for this to occur upon loading on board the
vessel. With container, inspection at shipside is not possible, so that
FOB, CFR etc. are inappropriate. The International Chamber of Commerce
(ICC) have, accordingly drafted three Combined Transport equivalents, which
they advise to use when availing of Combined Transport services in order to
avoid disputes. They are FCA, CPT AND CIP which transfer responsibility
from seller to buyer at the inland point at which the carrier takes charge
of the goods.
INCOTERMS
can be divided into recommended usage by mode of carriage. The division
recommended by the ICC is:
All modes (i.e. combined transport)- EXW,
FCA, CPT, CIP, DAF, DDU, DDP.
Conventional port-to-port/sea carriage only - FAS, FOB, CFR, CIF, DES, DEQ.
The terms set out hereunder are the
INCOTERMS 1990:
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EXW
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Ex works (named place)
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FCA
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Free Carrier (named place)
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FAS
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Free Alongside Ship (named port of shipment)
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FOB
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Free On Board (named port of shipment)
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CFR
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Cost and Freight (named port of destination)
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CIF
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Cost, Insurance and Freight (named port of
destination)
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CPT
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Carriage Paid To (named point of destination)
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CIP
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Carriage and Insurance Paid To (named point of
destination)
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DAF
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Delivered At Frontier (named point)
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DES
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Delivered Ex Ship (named port of destination)
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DEQ
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Delivered Ex Quay (duty paid) (named port of
destination)
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DDU
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Delivered Duty Unpaid (named point)
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DDP
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Delivered Duty Paid (named point)
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