Agenda
●Background
●Incoterms2010
●Variants of Incoterms
●Responsibility Matrix
●"Risk of Loss" Transfer Point
●Comparison between 2000 v 2010
●Institute Cargo Clause
●Other Trade Terms
●Transport Documents

BACKGROUND
What are Incoterms?
●Created by the International Chamber of Commerce (ICC) since 1936. Amendments were later made in 1953, 1967, 1976, 1980, 1990, 2000
●Facilitate the conduct of international trade
●Define obligations of parties (seller and buyer)
●Use exclusively in sales/purchase contract
●Always abbreviated by a three character English language acronym
●Always accompanied by a geographic place

Purpose and Scope
●Parties to a contract are anaware of the different trading practices in different countries
●It indicates how the costs relating to the export and import of goods should be divided between the seller and the buyer
●It covers the rights and obligations of the parties in the delivery of goods under the contract of sale
●It does not apply to the contract of carriage
●It specifies the point for transfer of risk from seller to buyer. Risk of misunderstanding and subsequent disputes is eliminated

Incoterms 1990
Group E Departure
●EXW Ex Work
Group F Main Carriage Unpaid
●FCA Free Carrier
●FAS Free Alongside
●FOB Free on Board
Group C Main Carriage Paid
●CFR Cost and Freight
●CIF Cost, Insurance and Freight
●CPT Carriage Paid To
●CIP Carriage and Insurance Paid To
Group D Arrival
●DAF Delivered At Frontier
●DES Delivered Ex Ship
●DEQ Delivered Ex Quay
●DDU Delivered Duty Unpaid
●DDP Delivered Duty Paid

Main Reasons for 2010 Revision
●To apply Incoterms for domestic sale contracts.
● To provide electronic means of communication the same effect as paper
communication.
● To cope with the revision of the Institute Cargo Clauses.
● To consolidate “D” terms and abolished “DAF”, “DES”, “DEQ” and “DDU”
● To add security-related clearances
● To allocate terminal handling charges between parties
● To include obligation to “procure goods shipped” as an alternative to the obligation
to “ship goods” under String Sale.

Terms used in the Incoterms 2010
● Carrier – it is the party with whom carriage is contracted
● Customs formalities – comply with any applicable customs regulations which may
include documentary, security, information or physical inspection obligation
● Delivery – it is used to indicate where the risk of loss of or damage to the goods
passes from the seller to the buyer
● Delivery document – a document used to prove that delivery has occurred
● Electronic record or procedure – electronic message is equivalent with the
corresponding paper document
● Packaging – the packaging of goods to comply with contract or fit for transportation

EXW
● The seller delivers when the goods at the disposal of the buyer at the seller’s premises or another named place (i.e. factory or warehouse) not cleared for export and not loaded on any collecting vehicle. It is suitable for domestic trade
● This term represents the minimum obligation for the seller, and the buyer has to bear all costs and risks involved in taking the goods from the seller’s premises.
The Seller’s Obligations:
● Provide the goods and the commercial invoice and other evidence of conformity as
per the contract.
● Place the goods at the disposal of the buyer at the named place of delivery, not
loaded on any collecting vehicle, within the period agreed.
● Provide assistance to the buyer in obtaining any documents the buyer may require for
the import and/or import of the good through any country.
The Buyer’s Obligations:
● Pay the price as per the contract.
● Must obtain at his own risk and expense any import and export licence or other
official document as well as meeting customs requirement if any for the export of the
goods.
● Take delivery of the goods when they have been delivered.
● Bear all risks from the time the goods have been delivered.

CPT
● The seller delivers the goods to the carrier nominated by the seller at an agreed place
● When CPT is used, the seller fulfits its obligation to deliver when the seller hands the
goods over to the carrier and not when they reach the buyer at the place of destination.
● CPT requires the seller to clear the goods for export. However, the seller has no obligation to pay any import duty.
The Seller’s Obligations:
● Provide the goods and the commercial invoice and other evidence of conformity as per the contract.
● Obtain at his own risk and expense any export licence or other official document as well as meeting customs requirement if any for the export of the goods.
● Deliver the goods at his own expense to the carrier for carriage of the goods to the named place of destination.
● Bear the risks until the goods have been delivered.
● Pay all costs relating to the goods until such time the goods have been delivered.
● Give shipment advice to the buyer upon delivery of the goods.
● Provide to the buyer a transport document without delay
● Obtain at the buyer’s request any documents when the buyer may require for the import of the goods.
● Provide the buyer, upon request, with the necessary information for insurance cover.
The Buyer’s Obligations:
● Pay the price as per the contract.
● Obtain at his own risk and expense any import licence or other official document as
well as meeting customs requirement if any for the import of the goods.
● Accept delivery of the goods and the transport document.
● Bear all risks of loss of or damage to the goods from the time they have been delivered.
● Pay other costs upon delivery of the goods.
● Give sufficient notice to the seller to determine the time for shipping the goods and/or the destination.
● Pay the costs of inspection of goods.
● Pay the costs and charges for document(s) required for the import of the goods as
obtained by the seller at the buyer’s request.