conferencia_incoterms_11

1

K. VanheusdenDirectorBelgian Foreign Trade [email protected]

WHATWHATWHATWHAT ARE THE ARE THE ARE THE ARE THE

INCOTERMSINCOTERMSINCOTERMSINCOTERMS® ® ® ® RULESRULESRULESRULESINCOTERMSINCOTERMSINCOTERMSINCOTERMS® ® ® ® RULESRULESRULESRULES

ALLALLALLALL ABOUTABOUTABOUTABOUT????

2

� Publication ICC n° 715 (Incoterms® 2010)

� English – translations

� Publication ICC n° 720 (Jan RAMBERG, ICC Guide to Incoterms® 2010)

4

� Publication ICC n° 720 (Jan RAMBERG, ICC Guide to Incoterms® 2010)

� http://www.incoterms.org

THE 11 THE 11 THE 11 THE 11

INCOTERMSINCOTERMSINCOTERMSINCOTERMS® 2010 ® 2010 ® 2010 ® 2010 INCOTERMSINCOTERMSINCOTERMSINCOTERMS® 2010 ® 2010 ® 2010 ® 2010

RULESRULESRULESRULES

5

EXW (… named place)Ex Works – à l’Usine - en fábrica

6

FCA (… named place)Free Carrier – Franco Transporteur - franco transportista

7

CPT (… named place of destination)Carriage Paid To – Port payé jusqu’à - transporte pagado hasta

8

CIP (… named place of destination)Carriage and Insurance Paid to – Port payé, assurance comprise jusqu’à - transporte y seguro pagados hasta

9

DAT (named terminal at port or place of

destination)

Delivered at Terminal – Rendu au Terminal - entrega en terminal

10

DAP (named place of destination)Delivered at Place – Rendu au Lieu de Destination - entrega en lugar

11

DDP (… named place)

Delivered Duty Paid – Rendu Droits Acquittés-entregada derechos pagados

12

FAS (… named port of shipment)

Free Alongside Ship – franco le long du navire- franco al costado del buque

13

FOB (… named port of shipment)

Free On Board – franco bord - franco a bordo

14

CFR (… named port of destination)Cost and Freight – Coût et Fret - coste y flete

15

CIF (… named port of destination)Cost, Insurance Freight – Coût, Assurance et Fret - coste, seguro y flete

16

LEGAL STATUS OF THE LEGAL STATUS OF THE LEGAL STATUS OF THE LEGAL STATUS OF THE



17

� Legislation – customs – contractual

� facultative – complementary law – variants

� can not be abolished

Legal status of the Incoterms® 2010 Rules

18

� Recommendation n°5 of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) March 2000 �June 5, 2011

� art. 7,2 CISG � international contracts of sale are to be interpreted according to transnational general principles

� Intrastat – antidumping (CIF) – customs value (CIF – FOB) –single administrative document (case 20) – origin definition (EXW)

� Soft law

Alternative trade terms

� Free House - DIS - Door-to-door – FIS

� FOA – FOR/FOT – FOB Border – C&F –FOB+I – PAF – FOBs – FOB+ – CAF –CIF landed – CIF Outturn Weights – EXF CIF landed – CIF Outturn Weights – EXF - C&I (CNI) …

� RAFTD 1941� Ex / FOB (6) / FAS / C&F / CIF / Ex Dock

� UCC � FOB (3) / FAS / C&F / CIF / Ex Ship

(Revised) American Foreign Trade Definitions

� FOB (named inland carrier at named inland point of

departure) - EXW loaded


departure) - Freight prepaid to (named point of exportation)exportation)


departure) - Freight allowed (named point)

� FOB (named inland carrier at named point of exportation)

FOB Vessel (named port of shipment)

FOB (named inland point in country of importation) -DDP

UCC 2-319/2-324

� FOB (place of shipment) = EXW-FCA

� FOB (place of destination) = DDP

� FOB (vessel/car/vehicle) = FCA loaded

� FAS

� C&F

� CIF

� Ex Ship = DEQ

CLASSIFICATIONCLASSIFICATIONCLASSIFICATIONCLASSIFICATION OF OF OF OF

THE THE THE THE INCOTERMSINCOTERMSINCOTERMSINCOTERMS® ® ® ® THE THE THE THE INCOTERMSINCOTERMSINCOTERMSINCOTERMS® ® ® ®

2010 2010 2010 2010 RULESRULESRULESRULES

22

four different categories:

1. “E”: the seller only makes the goods available to the buyer at the seller’s own premises;

2. “F”: the seller is called upon to deliver the goods to a

two classes:

1. seven Incoterms® 2010 rules that can be used irrespective of the mode of transport selected and irrespective of whether one

Goods are collected at

Goods are shipped from

to deliver the goods to a carrier appointed by the buyer;

3. “C”: the seller has to contract for carriage, but without assuming the risk;

� “D”: the seller bears all costs and risks needed to bring the goods to the place of destination.

irrespective of whether one or more than one mode of transport is employed;

2. four “sea and inland waterway” rules where the point of delivery and the place to which the goods are carried to the buyer are both ports.

23

shipped from

Goods are shipped to

Goods are delivered at

Container -

FCL

Inland

terminal - LCL

24

Port terminal

- LCL

Quay On board

Passing of riskFCA

CPT CIP

FOBCFR CIF

FAS

Incoterms® 2010Incoterms® 2010

EXWEXW

transporttransport

BUYERBUYERSELLERSELLER

transporttransportriskriskcostscosts

2525

FCAFCAtransporttransport

riskriskcostscosts

transporttransport


transport + insurancetransport + insuranceriskriskcostscosts

CPTCPT

CIPCIP




transporttransportriskrisk

DATDAT

DAPDAP

2626

riskriskcostscosts


DDPDDP

DAPDAP


FASFAS


transporttransport


transporttransport

2727


transporttransport


transport + insurancetransport + insuranceriskriskcostscosts

CFRCFR

CIFCIF

STRUCTURESTRUCTURESTRUCTURESTRUCTURE OF THE OF THE OF THE OF THE



28

Structure of the Incoterms® 2010 rules: 10 articlesA THE SELLER’S OBLIGATIONS

� General obligations of the seller

� Licences, authorizations, security clearances and other formalities

� Contracts of carriage and insurance

B THE BUYER’S OBLIGATIONS

� General obligations of the buyer


� Contracts of carriage and

29


� Delivery

Transfer of risks

Division of costs

� Notice to the buyer

� Delivery document

Checking – packaging – marking

� Assistance with information and related costs


� Taking delivery

Transfer of risks

Division of costs

� Notice to the seller

� Proof of delivery

Inspection of goods� Assistance with information and

related costs

Incoterms® rules and division of costs (6 � 4,3,2)

+ import and + import and

EXWEXW FCA A4bFCA A4b FASFAS FOBFOB CFR/CPTCFR/CPTCIF/CIPCIF/CIP

DAPDAP

((CFR/CPT CFR/CPT A6)A6)

(CIF/CIP (CIF/CIP A6)A6)

DATDAT

DAPDAP DDPDDP€€

FCA A4aFCA A4a DATDAT

30

+ + loadingloading + export + export formalitiesformalities

+ + precarriageprecarriage

+ THC/CSC + + THC/CSC + scancostsscancosts+ port passage (PLTC)+ port passage (PLTC)

+ + freightfreight + + insuranceinsurance

+ + dischargingdischarging+ + summarysummarydeclarationdeclaration

+ Transit + + Transit + oncarriageoncarriage

+ import and + import and dutiesduties

net net salessalespriceprice

+ transport + transport packagingpackaging

+ + loadingloading(port (port customscustoms !)!)

+ + oncarriageoncarriage+ THC/CSC+ THC/CSC

Incoterms® rules and risk transfer (5 � 4)

EXWEXW FCA A4bFCA A4bCIP CIP -- CPTCPT

FASFAS FOBFOBCFRCFRCIFCIF

DAPDAP DATDAT DAPDAPDDPDDP

FCA A4aFCA A4aCPT CPT -- CIPCIP

31

loadedloaded in in container, container, onon

trucktruck

NotNot dischargeddischargedfromfrom trucktruck

OnOn quayquay ((bargebarge,..) ,..) alongsidealongside shipship OnOn board board ––

notnotdischargeddischarged

DischargedDischargedonon quayquay –– in in terminal terminal ––readyready forforcollectioncollection

NotNotdischargeddischarged at at

destinationdestinationpackedpacked, , notnot

loadedloaded

‘‘onon board’;board’;(port (port customscustoms))

Incoterms® rules and documents at expense/risk of the seller (+ obligation to assist)

+ import + import invoiceinvoice

EXWEXW FCA A4bFCA A4b FASFAS FOBFOBCFRCFRCIFCIF

DAPDAP DATDAT DAPDAP DDPDDPFCA A4aFCA A4a CPTCPTCIPCIP

32

ProofProof of of deliverydelivery(CMR, …) + export (CMR, …) + export licenselicense + export + export

daclarationdaclaration + UGD+ UGD+ FCR+ FCR

+ receipt on quay+ receipt on quay

+ ISPM 15+ ISPM 15 + + D/O + CMR D/O + CMR + + summarysummarydeclarationdeclaration

+ Transit+ Transit

+ import + import invoiceinvoice+ import + import licenselicense+ + CoOCoO + import + import declarationdeclaration + + certificatecertificate of of conformityconformity + +

VATVAT--nn °°

InvoiceInvoice + + packingpacking

list list

+ B/L (+ + B/L (+ insuranceinsurancecertificatecertificate))

+ B/L + B/L –– CMR CMR –– AWB AWB –– CIM CIM (+ (+ insuranceinsurance certificatecertificate))

Purpose of the Incoterms® rules

� costs (freight, customs, assistance, insurance)

� risks (transfer)6 � 4, 3, 2

5 � 4

33

� tasks (documents, formalities, notices)

� delivery

in the relationship seller - buyer

5 � 4

2, 9, 10

4 � 7, 8

RELEVANCERELEVANCERELEVANCERELEVANCE OF THE OF THE OF THE OF THE

INCOTERMSINCOTERMSINCOTERMSINCOTERMS® ® ® ® RULESRULESRULESRULES TOTOTOTO

LOGISTICALLOGISTICALLOGISTICALLOGISTICAL OPERATORSOPERATORSOPERATORSOPERATORSLOGISTICALLOGISTICALLOGISTICALLOGISTICAL OPERATORSOPERATORSOPERATORSOPERATORS

… … … … THATTHATTHATTHAT ARE NO PARTY ARE NO PARTY ARE NO PARTY ARE NO PARTY TOTOTOTO

THE CONTRACT OF SALETHE CONTRACT OF SALETHE CONTRACT OF SALETHE CONTRACT OF SALE

35

Incoterms® rules don’t apply to

� projects – consignment deliveries - …

� relationship with the forwarder – carrier

� relationship with the insurance cy

36

� relationship with the bank

� conditions/place of payment

� transfer of title

� sanctions in case of breach

� applicable law

Structure

A THE SELLER’S OBLIGATIONS

� General obligations of the seller



B THE BUYER’S OBLIGATIONS

� General obligations of the buyer



37


� Delivery

Transfer of risks

Division of costs

� Notice to the buyer

� Delivery document

Checking – packaging – marking

� Assistance with information and related costs


� Taking delivery

Transfer of risks

Division of costs

� Notice to the seller

� Proof of delivery

Inspection of goods� Assistance with information and

related costs

Logistics, carriers & freight forwarders (+ booking agents)

How do the Incoterms rules affect shipping (instructions)?� Who has to organize carriage � who should under

the contract of sale be the shipper on the contract of carriage?of carriage?

� Who is the sender; the loader?

� Where do the goods go to – come from

� Who pays freight – surcharges – demurrage & detention under� the contract of carriage

� the contract of sale38

Logistics, carriers & freight forwarders (+ booking agents)

How do the Incoterms rules affect shipping (instructions)?� What are ‘freight’, ‘charges’ and ‘costs of carriage’?

� How do freight terms (FLT, FIO, FIOST, Hook-Hook � How do freight terms (FLT, FIO, FIOST, Hook-Hook …) affect the cost splitting between buyer and seller?

� Which documents prove delivery?

… even though the booking agent may give instructions that are not consistent with the contract of sale.

39

EXW

FCA freight forwardersterminal

� Road Way Bill arrival� FCR

DAT Antwerp

� D/O� Release notice

DAP Munich

DDP Munich

� Road Way Bill–AWB – CIM –B/L – HB/L…

40

� ‘ready forcollection’?

� PSI?

FCA Seller’spremises

� Road Way Bill� Through B/L

� Arrival docCPTCIP

B/L – HB/L…

FAS Houston

� ?

41

FOB Houston

� Mate’s receipt� B/L?

CFRCIF

� Ocean port to port B/L full set


RULESRULESRULESRULES –––– WHAT’SWHAT’SWHAT’SWHAT’S NEW?NEW?NEW?NEW?

42

Incoterms® 2010 rules: what’s new?

1. Introduction 22p. � 5p.2. ‘Guidance notes’ + drawings3. 13 � 11 Incoterms® rules;

� DAF – DES – DDU � DAP� DEQ � DAT

4. Classification – all modes vs. maritime only

43

4. Classification – all modes vs. maritime only5. Domestic and international trade6. Electronic documents have full functional equivalence

to paper documents � B/L?7. Adjustment insurance cover to the Institute Cargo

Clauses 20098. First Incoterms® rules since 9/11 � Incorporation

‘Security clearance’ � A2/B2 and ‘Security related information’ � A10/B10

Incoterms® 2010 rules: what’s new?

9. Terminal Handling Charges (THC) � improved wording A6/B6

10.String sales (‘deliver or procure goods so delivered’)11.FCA + FAS + FOB additional service (‘freight

collect’)

44

collect’)12.EXW: if the seller loads � at the risk of the buyer13.FOB – CFR – CIF: critical point ship’s rail � on

board (port customs).14.FOB – CFR – CIF: no longer an express reference to the

B/L but …

15.DDP: preshipment inspection - VAT


RULESRULESRULESRULES IN IN IN IN PRACTICEPRACTICEPRACTICEPRACTICE

45

Are you prepared to bear all costs and risks until arrival of the

goods at the buyer’s premises?

Can you bring the goods to the agreed place of delivery

(across the border)?

May the goods be handed over to the

buyer without endangering payment?

Can you obtain the required import licenses and carry out the import formalities? Can you recover the import VAT?

DDP

Are you prepared to organise transport and

Is the place of destination a sea port?

Do the goods travel under a B/L (or a non

negotiable Sea

Are the goods shipped in a container?

DAP

CFRCIF

Are you prepared to bear all costs and risks until arrival of the goods at a place (terminal) of destination where the buyer will come

to collect the goods?

Can you bring the goods to the terminal of destination where the buyer will come to

collect them?

DAT

Y Y Y

Y

Y

Y

Y Y

NN N

NN

N

46

organise transport and pay the freight up to the

agreed place of destination (without guarantee of arrival)?

destination a sea port? negotiable Sea Waybill)?

in a container?

Are you prepared to bring the goods to the

agreed place of international/main shipment and carry out all formalities upon exportation

Are the goods shipped in a container, by plane, truck, rail, a combination of

modes?

Are the goods handed over to the carrier

(captain) on board of a vessel?

CIF

CPTCIP

FOB

FCA

EXW

Are the goods handed over alongside a

vessel (on a barge, …)?

FAS

Y Y Y

Y

Y

Y

Y

Y

N

N N

N

NN

N

Are you prepared to bear all costs and risks

from the seller’s warehouse?

Can you obtain the required export licenses and carry out all export and transit formalities?

EXW

Are you prepared to organise main carriage (including consolidation), pay the freight and bear the risk of the goods until arrival at the agreed place of destination?

Are the gpods shipped by air, rail, road or container?

Do you accept all risks from the moment the goods are handed over

to the carrier in terminal?

Do you accept another transport document than a negotiable B/L?

FCA

FAS

Do you accept the risks from the moment the goods have been presented alongside the (ocean going) vessel?

Y

Y

Y

Y

Y YAre you capable to

load the goods at the seller’s warehouse?

Do you accept the risks from the moment the captain FOB

N

N

N

NN

N

NN

Y

Y

Y

47

Are you prepared to bear the risks during transportation but have the seller

organise and pay for transportation to the

agreed place?

Do you accept the risks from the moment the goods are handed over

in the terminal of departure of main

carriage?

CPTCIP

CFRCIF

DAT

DAP

vessel?

Do you accept the risks from the moment the goods have been placed on board the ship?

Is the place of destination a terminal where you will come to

collect the goods?

Are the goods shipped by air, road, rail or container?

Do you accept any other transport document than a negotiable B/L?

Y

the captain has received the goods on board the ship?

FOB

Do you want to clear the goods for importation in

the country of destination?

DDP

N

N N

N

N

NN

Y

Y

Y

Y

YY Y

conferencia_incoterms_11

Documents

named point fob

ex fob

port of shipment fob

fob place of shipment

inland carrier

inland point of departure

ddp fob vesselcarvehicle

paf fobs fob caf cif