INCOTERMS

International commercial terms

- It is based on international commercial law

- And accepted by government
- The selling terms that the buyer and seller agreed to
- It states the costs and risks task that is associated with buyer and seller
- Transfer of risk from buyer to seller

WE HAVE 11 INCOTERMS

-blue section, different types of incoterms.

-Green, shows group, mode of transport, whether sea or inland yung transportation

-yellow section, freight collect terms and prepade collect terms.

DRAWING

Figure 1 (exporter) > (leaves warehouse) > (loaded on board or vessel at port of loading) > (get loaded in
port of destination) > (darating sa customs) > (idedeliver sa buyer)

ALONG THE DELIVERY OF GOODS

-there are incoterms na nararapat as basis to know kung ano nga ba ang risk and costs at kung
sino ang magbabayad o kung ano and dapat matransfer from seller to buyer.

(Nasa chart and obligations and charges and start tayo sa left side)

EXW

- Means Exworks or exwarehouse

- Seller will only cover the cost of the goods and export packaging
- Matatransfer yung risk at buyer’s disposal, meaning;
- Imamanufacture lang ni seller ang goods including export packaging then si buyer na lahat ng
expenses.
FCA
- Means Free Carrier
- Yung risk naman sa FCA ay matatransfer on buyer’s transport; meaning
- Seller will cover export duties, taxes and customs clearance para maipeprare yung merchandise
for exportation. Tapos from the origin terminal forward, si buyer na magshoshoulder ng
expenses.

FAS

- Means Free Alongside Ship (sa Port)

- Seller will cover the charges sa terminal of origin, including na lahat ng port handling charges.
FOB
- Next naman is FOB or Free on board
- Most popular incoterm for containerized trade or mga transactions.
 - Yung responsibility naman ni seller is I supply yung goods and bayaran lahat ng payable
additional charges, starting from the cost of packaging to the loading of the goods para ma load
yung merchandize sa vessel or aircraft.
- After mabayaran ni Seller mga obligateions, matatransfer na yung risk kay buyer.

KAPAG SI SELLER ANG AGREE NA SAKANYA MACHARGE ANG COST OF FREIGHT AND CARRIAGE… pwede
iapply ni seller ang incoterms na CFR, CIF, CPT, and CIP

- CFR and CIF ay magkapareho, since they both cover inland and water transport.

KAPAG meron naming agreement si Seller and buyer na si seller ang magshoshoulder ng cost of freight
and Insurance. Magiging CIP if si seller ay nag agree na ishoulder ang fees from Cost of goods to the
Insurance sa may chart.

Sa may DAP, DPU, at DDP

- Involves yung delivery of the goods na, unloaded, at customs cleared na sa Country of
Destination

DAP

- Which means, delivered at place.

- Si seller ang magshoshoulder ng delivery cost to destination.

DPU

- Kapag DPU naman, which is Delivered at Place-Unloaded ang napagkasunduan ni Buyer and
Seller.
- Magiging additional na babayaran naman ni Seller ang Unloading cost sa destination, including
the fees preciously sa DAP.

DDP

- Delivery Duty paid is agreed.

- Yung import duty, taxes,tsaka customs clearance ay maidadagdag sa expense ni seller and all the
other obligations, pero yung delivery of goods ay ishoshoulder ni buyer.