Incoterm

An incoterm represents a universal term that defines a transaction between

importer and exporter, so that both parties understand the tasks, costs, risks and
responsibilities, as well as the logistic and transportation management from the
output of the product to the reception by the importing country .

It is necessary to understand all these aspects, specifically what are the incoterms
2010. Below is explained in detail the explanation:

Incoterms 2010

There are some notions to consider about incoterms 2010:

Incoterms 2010

Globalization in the world has allowed companies to increase access to the

exchange of products between different countries. In the same way, it has
impacted international forms of negotiation today. This is because there is a
complexity to carry out negotiations with people from different countries, customs,
cultures, legislations, etc.

Since in many cases the parties to an international sales contract have no

knowledge of the different commercial practices employed in the respective
countries.

Generating misunderstandings that may result in lawsuits or litigation between the

parties. This also implies the loss of time and money.

To eliminate all these uncertainties and facilitate the processes of commercial

transactions, the International Chamber of Commerce (ICC) established the
International Commerce Terms or INCOTERMS which are a set of rules that allow
to agree or define the distribution of rights and obligations between the seller and
the buyer in any transaction of international merchandise sales.

These were published for the first time in 1936. They have been periodically
revised and the most recent version is the 2010, which came into force as of
January 1, 2011 replacing the 2000 version.

In this new version they have been reduced from 13 to 11 rules. The changes
made are the disappearance of four terms and the creation of two new ones due to
the reality of current trade.
 The terms that were eliminated were DAT and DAP: Replaces DAF, DES, DEQ
and DDU.

The following table shows the 11 commercial terms 2010:

INCOTERMS 2010

The Incoterms distinguish the subject of the

transfer of risks and the transfer of
property, the latter subject to the law that
governs the contract. Specifically, in an
international sales contract.

EXW
The sole responsibility of the seller is
to make the goods available to the
buyer in their premises in a packaging
adapted to the type of transport.
TheFAS
obligations of the seller have
FCA been fulfilled when the goods,
already paid the tariffs, are located
next to the ship in the dock or in
alijadores of the port of
If the delivery is made in the embarkation agreed.
premises of the seller, it is the seller
who carries out the loading of the
merchandise, conveniently packed in
the vehicle provided by the buyer
(please indicate"Local seller's FCA").

CPT

FOB CFR CIF

In an FOB type contract, the seller
fulfills his delivery obligation when The seller chooses the carrier,
closes and assumes the The seller
the goods are on board the ship at
expenses by paying the freight The buyer assumes coordinates the
the designated port of shipment or, the risk of transport
to the port of arrival agreed, logistics chain.
in the case of successive sales. when the goods
download not included. have been delivered
on board the ship at
the port of
shipment.

DAT
CIP
DAP

the seller must close a contract

The CIP seller is identical to the
CPT, but the seller must also
provide transport insurance.
(which runs on his own) to
transport the goods to that
terminal, as well as unload the
goods from the means of
transport in question. The buyer must pay the price of the
goods, as provided in the sales
contract, and receive these goods as
soon as they have been delivered.

DDP

The seller, in this case, has the highest

obligations: the transfer of expenses and
risks is made at the time of delivery
where the buyer. The payment of
customs duties for imports is also
incumbent upon him