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Learning Outcome
• Understand the use of Incoterms 2010 in trade
• Identify the need to apply the correct incoterm to a
transaction
• Outline points that should be on a contract
• Analyze relationships between contract and the payment to
be made
Incoterms® 2010
What is
International Commercial Terms
it?

Terminology used in export and

import

13 terms in Incoterms® 2000 and

refined to 11 terms in Incoterms®
2010
Incoterms® 2010

Carriage of
the goods

Between
Risk
Exporter/
Division
Importer
Export/
Import/
clearance
 Incoterms® 2010 Function

Use generally recognized key

words

Standardi
ze Agree on the most common
contract understanding of such key words
practice

Avoid misunderstandings in the

use of them
Grouping by transport modes

Any Can be used with any kind of transport

modes modes

Should be only used when transport mode

Sea mode
are using waterway transport.
Grouping by main components

FCA CPT DAT

CIP

EXW FAS DAP

CFR

CIF

FOB DDP
Grouping by main components
The seller must deliver by delivering the
E terms goods at the disposal of the buyer at his
premises
The seller must hand over the goods to a
F terms
nominated carrier Free of risk and expense
The seller must bear certain Costs after the
C terms division of the risk of loss or of damage to
the goods
The goods must arrive at a stated
D terms
Destination
Ex Works

EXW Seller have minimum responsibility

e d
n d
m e
Carriage
o m
Seller premises
and Risk
ec
o tR
Clearance N
Buyer do all clearance

EXW Poltek APP the incoterms©

Usage
2010 rules
Free Carrier (FCA)
To nominated Carrier or Person at
Carriage
named place

Clearance Export Clearance

Passes to buyer when Seller handed

Risk
the goods to carrier

FCA Poltek APP the incoterms© 2010

Usage
rules
Carriage Paid To (CPT)

Carriage To named place / point of destination

up
r o
C G i n
Clearance Export Clearance
l l i sk
: A d r
a re a n
Risk w
Passes to buyer when Seller
e s
handedt
o pl a c e
the goods toBcarrier c
i ft nt
sh
CPT Narita the Incoterms©e2010re
Usage
rules
d i f
Carriage and Insurance Paid
to(CIP)

Carriage To named place / point of destination

up
r o
C G i n
Clearance Export Clearance
l l i sk
: A d r
a re a n
Risk w
Passes to buyer when Seller
e s
handedt
o pl a c e
the goods toBcarrier c
i ft nt
sh
CIP Narita the Incoterms©e2010re
Usage
rules
d i f
Delivered at Terminal (DAT)

Carriage To named terminal

Clearance Export Clearance

Risk Passes to buyer at named terminal

DAT Narita the Incoterms© 2010

Usage
rules
Delivered at Place (DAP)

Carriage To named place

Clearance Export Clearance

Risk Passes to buyer at named place

DAP Tokyo University the

Usage
Incoterms© 2010 rules
Delivered Duty Paid (DDP)

Carriage To named place

Clearance Export and Import Clearance

Risk Passes to buyer at named place

DDP Tokyo University the

Usage
Incoterms© 2010 rules
Free Alongside Ship (FAS)

Carriage To alongside ship nominated

Clearance Export Clearance

Passes to buyer when goods placed

Risk
at alongside ship

FAS Tanjung Priok terminal 5

Usage
the incoterms© 2010 rules
Free On Board (FOB)

Carriage Onboard ship nominated

Clearance Export Clearance

Passes to buyer when goods placed

Risk
On Board Ship

FOB Tanjung Priok

Usage
the incoterms© 2010 rules
Carriage and Freight (CFR)

Carriage To named terminal

up
r o
C G i n
Clearance Export Clearance
l l i sk
: A d r
a re a n
Risk w
Passes to buyer when goods
e s
placedt
o pl a c e
On BoardB Ship c
i ft nt
sh
CFR Narita the Incoterms©e2010 re
Usage
rules
d i f
Carriage Insurance and Freight
(CIF)

Carriage To named terminal

up
r o
C G i n
Clearance Export Clearance
l l i sk
: A d r
a re a n
Risk w
Passes to buyer when goods
e s
placedt
o pl a c e
On BoardB Ship c
i ft nt
sh
CIF Narita the Incoterms©e2010 re
Usage
rules
d i f
UCP 600
• 39 Articles
• Documents covered in UCP 600 are :
• Commercial Invoice (Article 18)
• Transport documents (Article 19 to 25)
• Insurance documents (Article 28)
UCP 600
• A credit is irrevocable
• By nature is Separate Transaction from the
sale
• Bank deals with documents