International Commercial Terms

The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.

The INCOTERMS was first published in 1936—INCOTERMS 1936—and it is revised periodically to keep up with changes in the international trade needs. The complete definition of each term is available from the current publication—INCOTERMS 2000. The publication is available at your local Chamber of Commerce affiliated with the International Chamber of Commerce (ICC).

Many importers and exporters worldwide are accustomed to and may still use the INCOTERMS 1980, the predecessor of INCOTERMS 1990 and INCOTERMS 2000.

EXWFCAFASFOBCFRCIFCPTCIPDAFDESDEQDDUDDP
SERVICESEx WorksFree CarrierFree Alongside ShipFree Onboard VesselCost & FreightCost Insurance & FreightCarriage Paid ToCarriage Insurance Paid ToDelivered At FrontierDelivered Ex ShipDelivered Ex Quay Duty UnpaidDelivered Duty UnpaidDelivered Duty Paid
Warehouse StorageSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Warehouse LaborSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Export PackingSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading ChargesBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Inland FreightBuyerBuyer/
Seller*		SellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Terminal ChargesBuyerBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Forwarder’s FeesBuyerBuyerBuyerBuyerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading On VesselBuyerBuyerBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Ocean/Air FreightBuyerBuyerBuyerBuyerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Charges On  Arrival At DestinationBuyerBuyerBuyerBuyerBuyerBuyerSellerSellerBuyerBuyerSellerSellerSeller
Duty, Taxes & Customs ClearanceBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerSeller
Delivery To DestinationBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerSellerSeller

Allocations of costs to buyer/seller according to Incoterms 2010

Incoterm 2010Export customs declarationCarriage to port of exportUnloading of truck in port of exportLoading on vessel in port of exportCarriage (Sea/Air) to port of importInsuranceUnloading in port of importLoading on truck in port of importCarriage to place of destinationImport customs clearanceImport taxes
EXWBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyer
FCASellerSellerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyer
FASSellerSellerSellerBuyerBuyerBuyerBuyerBuyerBuyerBuyerBuyer
FOBSellerSellerSellerSellerBuyerBuyerBuyerBuyerBuyerBuyerBuyer
CPTSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyerBuyerBuyer
CFR(CNF)SellerSellerSellerSellerSellerBuyerBuyerBuyerBuyerBuyerBuyer
CIFSellerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyerBuyer
CIPSellerSellerSellerSellerSellerSellerBuyer/SellerBuyer/SellerBuyerBuyerBuyer
DATSellerSellerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
DAPSellerSellerSellerSellerSellerSellerSellerSellerSellerBuyerBuyer
DDPSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller/Not including VAT/FAT