Incoterms latest changes. Delivery conditions

The term Incoterms first appeared in circulation in 1936. It was then that the International Chamber of Commerce (ICC) drew up and approved a set of rules designed to ensure the relationship between sellers and buyers. At the same time, a dictionary was compiled, which even today unambiguously interprets all Incoterms 2010 trade terms used in foreign trade. The main attention was paid to the so-called franco. This term refers to the transition, the moment when the seller transfers responsibility for the goods to the buyer.

The use of Incoterms 2010 rules by companies from various countries can significantly facilitate the procedures for sales contracts. It is clear that such rules simply cannot be dispensed with, because each country has its own trade law, which may differ significantly from the law of another state. The adoption of the terms of Incoterms 2010 at the level of the government of the country allows companies (both sellers and consumers) to avoid a number of problems.

The full English version of these rules is International Commerce Terms, and the abbreviated version sounds like Incoterms (Incoterms). Incoterms rules adopted on international level, recognized by governments, commercial enterprises and law firms around the world. In fact, this is an interpretation of the terms that are most applicable in international trade.

Incoterms 2000 is considered the key one, however, the last changes were made to these rules in 2010. The terms of Incoterms 2000 have been adopted with the participation of many states using this system. The latest version of the document today is called Incoterms 2010 (Incoterms 2010), it came into force on January 1, 2011 and is valid now.

Data international rules divided into four categories: E, F, C, D. Incoterms 2010 terms are usually denoted by three letters, the first indicates the category and, most importantly, the point of transition of obligations for the goods from the seller to the buyer:

E- at the place of dispatch;
F- at the terminals of departure of the main carriage, while the main carriage has not yet been paid;
C— at the terminals of arrival of the main transportation, while the main transportation has already been paid;
D- from the buyer, full delivery is implied.

In Incoterms 2010, only 11 terms are clearly defined, 7 of them are applicable to any type of vehicle, regardless of the chosen transport and how many modes of transport are used during transportation:

1. EXW(English) ex works, ex works, ex-warehouse): the buyer receives the goods from the seller's warehouse, which is specified in the contract, the export duties are paid by the buyer.

2. FCA(English) free carrier, free carrier): the goods are delivered to the main carrier of the customer, directly to the departure terminal specified in the contract, the export duties are paid by the seller.

3. CPT(English) carriage paid to...): the goods are delivered to the main carrier of the customer, and the seller pays for the transportation to the terminal specified in the contract, and the costs of insurance, customs clearance, delivery from the arrival terminal are borne by the buyer.

4. CIP(English) carriage and insurance paid to...): same as CPT, but the main carriage is insured by the seller.

5. DAT(English) delivered at terminal): delivery to the customs terminal specified in the contract is paid. That is, the main transportation, export payments and insurance are paid by the seller, but customs clearance for imports is already carried out by the buyer.

6. DAP(English) delivered at point): delivery to the contracted destination, local taxes and import duties are paid by the buyer.

7. DDP(English) delivered duty paid): the goods are delivered to the customer at the destination specified in the contract, already cleared of all risks and duties.

In addition, Incoterms-2010 defines 4 terms that apply only to maritime transport and vehicles of territorial waters and are used when the place of dispatch and delivery are seaports:

8. FOB(eng. free on board): the goods are loaded on the ship of the buyer, the freight is paid by the seller.

9. FAS(eng. free alongside ship): the goods are delivered directly to the ship of the buyer, he pays for the freight and loading, and the port of loading is indicated in the contract.

10. CFR(eng. cost and freight): the goods are delivered to the port of destination of the buyer, indicated in the contract. Freight, unloading and insurance of the main carriage are paid by the buyer.

11. CIF(eng. Cost, Insurance and Freight): means the same as CFR, the difference is that the seller undertakes the freight and cargo insurance.

What are Incoterms 2010 rules for?

The terms of Incoterms 2010 regulate:

distribution of transport costs associated with the delivery of goods between the seller and the buyer, i.e. determine until what moment the seller pays and from what moment the buyer pays;
the moment of transfer from the seller to the buyer of all risks associated with the goods, in particular, loss, damage, accidental loss of the goods;
date of delivery of the goods. The moment of the actual transfer of the goods by the seller to the buyer or his representative is determined, for example, transport organization. That is, the moment of fulfillment or non-fulfillment by the supplier of delivery dates is determined.

The rules for the transfer of ownership, the consequences of non-fulfillment by the participants in the transaction of obligations under the contract of sale, including the grounds for releasing the parties from liability, remain outside the terms of delivery of Incoterms. Such issues are regulated by the applicable law of a particular state or by the Vienna Convention.

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What is the difference between the latest edition of Incoterms 2010 and Incoterms 2000

Differences of the new edition of Incoterms 2010 from the previous Incoterms 2000:

Conditions: In Incoterms 2010, terms are not 13, but 11. However, two new provisions have been created ( DAP Incoterms- delivered at place, that is, delivery to the point, as well as DAT Incorems- delivered at terminal, that is, delivery to the terminal). These provisions can be used as multimodal. Four terms that were least used in practice (DAF, DES, DEQ, and DDU) have been cancelled.
DAT term(delivery to the terminal) replaced DEQ term: the goods arrive at the disposal of the buyer unloaded from the arrived transport. DAT, unlike DEQ, is also used for multimodal transportation. The experts are sure that the delivery to the DAT terminal corresponds to the port logistics.
DAP term(delivery to the point) replaced three terms at once: DAF, DES and DDU. The term DAP is a general term in which it is especially important to accurately designate the destination. It provides that the goods are transferred to the buyer ready for unloading (most often for reloading under customs control or for customs clearance).

New risks and costs in FOB, CFR and CIF: in FOB (free on board), CIF (cost, insurance and freight) and CFR (cost and freight) terms of delivery, risks and costs are redefined. In Incoterms 2000, in all three cases, the risk passed after delivery to the ship's side, and in Incoterms 2010, risks pass only after loading on board the ship.

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Peculiarities of application of group E delivery conditions (place of dispatch "departure")

The seller's obligations are minimal, ending after the transfer of the goods, and on its territory, to the buyer, for example, on (c):

stock
factory
office

For everything else, that is, for loading the goods, customs clearance, and so on, the buyer or his representative is responsible. In a sales contract, this term means that the seller minimizes his duties and responsibilities by transferring all possible risks associated with delivery and costs to the buyer.

However, if the buyer wishes and the seller agrees, the latter may be subject to additional obligations. For example, loading goods and accompanying them to customs. In this case, the term "EXW" will be supplemented by a special agreement.

To summarize: when this condition is included in the contract of sale, the risks and costs of the seller are minimal, because he gives the goods to the buyer on his territory. However, if the parties agree, then part of the risks and obligations can still be shifted to the seller.

In any case, this is clearly stated in the addendum to the sales contract. The term cannot be used if the buyer is simply unable, directly or indirectly, to comply with the export formalities. Then the term FCA is used, subject to the consent of the seller to assume the responsibilities and costs of delivering the goods.

Delivery condition

Meaning

Responsibilities of the Seller

Buyer Responsibilities

Goods from the seller's warehouse, pickup

1. Provide the Buyer with the goods and all accompanying documents;

2. If necessary, provide assistance in obtaining an export license, conclusion of an insurance contract, other permits for the export of goods, however, at the expense of the Buyer, at his risk;

3. Provide the unloaded goods for transport at the disposal of the Buyer at the place of delivery specified in the contracts, on a strictly defined date or period. If the parties have not specified a specific clause in the contract or there are several such clauses, the Seller may choose the clause most suitable for him;

4. Bear all risks of damage or loss of the goods, as well as costs until the moment of transfer to the Buyer;

5. Bear the costs associated with checking the quality, weight, dimensions, quantity of goods. The seller pays the costs associated with packaging for the transport of goods, if it is provided for in this area of trade. The packaging must be appropriately labelled.

1. Pay the price of the goods stipulated by the contract;

2. At your own expense and risk, issue any export or import licenses or other official authorizations. Complete all customs formalities related to the export of goods;

3. Take on all the risks of loss, damage to the goods from the moment of delivery of the goods, which are described in the obligations of the Seller;

4. Bear all costs associated with the goods from the moment of delivery, including the payment of duties and taxes upon export;

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Particulars of the terms of delivery of group F (the main carriage is not paid for by "Main Carriage Unpaid")

In the event that the buyer insists that it is the seller who carries out customs clearance of the goods and delivers them to the location of the carrier, instead of the term " EXW Incoterms 2010"used" FCA Incoterms 2010”, i.e. category E is replaced by F.

In this case, the functions of the carrier can be performed by the buyer himself or his authorized representative. Loading and unloading obligations are affected by the specified place of delivery of the goods. For example, if the delivery takes place at the seller's premises, then it is he who is responsible for the shipment process. If the delivery takes place elsewhere, then the responsibility for shipment is removed from the seller.

In addition to this term, there are two more modes in category F: “ FAS" and " FOB».

The first mode "FAS" (free along the ship), is used when the delivery of goods requires water transport. The seller is released from the obligation to deliver the goods when the goods have already been placed along the side of the vessel on lighters or berths (ie at the agreed port of shipment). All further risks relate to the buyer or his representative, who pays the costs of loading, insurance, chartering the vessel, unloading and delivery to the destination. Thus, the risks pass when the delivery to the berth of the port of loading is completed.

If the term "FAS" is used, the customs "clearance" is carried out by the seller. If the buyer has assumed this responsibility, the this moment in a contract or special application.

The term "FOB" (free on board) is almost identical to the previous regime. The main and only difference is the need to load the goods onto the ship. That is, in previous case the seller had to bring the cargo to the ship, and when using the term "FOB" - also load it on board. Thus, the responsibility for the goods passes to the buyer as soon as the goods are loaded onto the vessel.

When delivering goods in containers, we recommend using termFCAIncoterms, whose terms of delivery are more suitable, since the term "FOB" may not be suitable if the goods pass to the buyer before they are placed on board the ship. The seller will be required to deliver the goods on board the vessel or to provide the goods so provided for shipment . TermFOB implies that the seller completes all customs formalities required for import and pays import duties.

Delivery condition	Meaning	Responsibilities of the Seller	Buyer Responsibilities
	The goods are delivered to the carrier of the customer. The seller fulfills his delivery obligations at the moment when the goods, already cleared of duties, are delivered to the place indicated by the contract and agreed with the buyer.	1. Provide the Buyer with the goods and accompanying documents, in accordance with the terms of the contract. Documents may be provided in the form of electronic records; 2. If necessary, obtain at your own risk and expense an export license or other necessary permissions for the export of goods; 3. Provide the Buyer with all the information necessary to obtain insurance. This condition does not provide for compulsory insurance; 4. Hand over the goods to the Carrier or his authorized representative at the agreed place in specified date or period. 5. Until the time of delivery, the Carrier shall bear all risks of damage to the goods and costs. 6. Before delivery, bear all costs associated with the goods, if necessary, pay all duties, fees, taxes for customs clearance of goods for export 7. Bear the cost of checking the goods: checking the quality, weight, dimensions, quantity. The Seller also bears the costs of packaging and labeling, that is, preparing the goods for transportation.	1. Pay the price of the goods on the basis of the contract; 2. Obtain an import license or other official authorization, at your own risk and expense, and carry out customs formalities in connection with the importation of the goods; 3. Carry out transportation of goods to the specified place of delivery, at your own expense; 4. From the moment of delivery, assume all risks of loss and damage to the goods. 5. From the moment of delivery, assume all costs associated with the goods from the moment of its delivery, including import costs. As already mentioned, the costs associated with the export are borne by the Seller; 6. Notify the Seller of the place of delivery of the goods, the name of the Carrier, the method of transportation, the term or date of delivery of the goods.
	The goods are delivered to the ship of the customer, i.e. the seller bears the costs of delivery to the port of departure	1. Provide the goods and all documents for it to the Buyer, in accordance with the contract. Documentation can be submitted in electronic form 2. Obtain, at your own risk and expense, a license or other authorization to export the goods; 3. Provide the Buyer full information, for insurance. Compulsory insurance is not provided; 4. Deliver the goods, placing them along the side of the vessel. Port of loading, date, period and all other terms of delivery must be agreed in advance. If there is no named point of loading, the seller may choose any point at the port of shipment that is convenient for his purposes; 5. Until the moment the goods are placed along the side of the ship, bear the risks of loss or damage to the goods; 6. Before placing the goods along the board, pay all costs; 7. If necessary, pay the costs associated with customs formalities, such as taxes, fees, import duties and so on. 8. Provide the Buyer with proof of delivery of the goods or assist in obtaining a transport document, but at the expense of the Buyer; 9. Bear the cost of checking the quality, weight, size of the goods and inspecting the goods before shipment; 10. Provide at his own expense the packaging of the goods, if its presence implies the specifics of the goods; 11. Ensure proper labeling of the product at your own expense; 12. Help the Buyer to obtain information and documents necessary for the importation of goods into the territory of the Buyer's state, but at his expense; 13. Reimburse all costs and fees of the Buyer associated with the receipt or assistance in obtaining necessary documents and information.	2. Obtain a license or other official certificate to import goods at your own expense and risk, and also complete all customs formalities related to the import of goods; 3. Transport the goods to the specified port of shipment at your own expense; 4. Accept delivery when carried out by the Seller; 5. From the moment of delivery, assume the risks of loss or damage to the goods; 6. Notify the Seller of the place of loading of the goods, the name of the ship, the date or time of delivery of the goods; 7. Bears all risks of loss or damage to the goods if the named vessel did not arrive at the port on time or its name was not communicated to the Seller. 8. From the moment of delivery, bear all costs of the goods, including import costs. Export costs are the responsibility of the Seller; 9. accept the notification, that is, confirm the delivery; 10. Bear the cost of inspecting the goods prior to shipment unless directed by the authorities; 11. Timely notify the Seller of the need to provide documents and information for the transportation and import of goods. The costs of obtaining documents are borne by the Buyer.
	The goods are loaded on the ship of the customer, i.e. the seller must deliver the goods on board the ship specified by the buyer at the specified port of shipment	1. Provide the product itself and its accompanying documents, including in the form of electronic records, in accordance with the contract; 2. Obtain an export license and other permits at your own expense and risk; 3. Provide the Buyer with information for insurance purposes. Compulsory insurance is not provided; 4. Put the goods on board the vessel, the port of shipment, the name of the vessel, the date or period of delivery are agreed in advance. If there is no named point of loading, the seller may choose any point convenient to him at the chosen port of shipment; 5. Bear risks in case of loss or damage to the goods until the moment of its delivery on board the vessel; 6. Before loading on board, pay all costs associated with the goods; 7. If necessary, pay the costs of customs formalities, such as paying taxes, fees, customs duties; 8. Provide the Buyer with evidence of the delivery of the goods on board the specified vessel or assist in obtaining a transport document; 9. Bear the cost of checking the quality, weight and size of the goods, as well as its inspection before shipment; 10. Ensure the availability of product packaging, if necessary, at your own expense; 11. Mark the goods properly; 12. Help the Buyer to obtain documentation and information on the product, at the expense of the Buyer. 13. Reimburse all costs and fees incurred by the Buyer in connection with the receipt or assistance in obtaining required documents and information.	1. Pay the cost of the goods on the basis of the contract; 2. Obtain an import license or other official certificate, complete all customs formalities for the import of goods at your own expense and risk; 3. Transport the goods to the specified port of shipment at your own expense; 4. From the moment of delivery, assume all risks of loss or damage to the goods; 5. Notify the Seller of the name of the vessel, the place of delivery, the date or time of delivery of the goods. If necessary, notify of the chosen moment of delivery within the previously specified period; 6. Bears all risks in relation to the goods if the ship fails to arrive at the port on time or its name is not handed over to the Seller; 7. From the moment of delivery on board, bear all costs of the goods, including the costs of importing the goods. Export costs are the responsibility of the Seller; 8. Timely inform the Seller about the need to provide information and documents for the transportation or import of goods.

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Particulars of the terms of delivery of group C (the main carriage is paid for by the "Main Carriage Paid")

This includes modes of transportation paid by the seller. There are only four terms "CFR", "CPT", "CIF", "CIP".

At the first term, the seller:

Bears the cost of delivering the goods to the port of destination;
Performs customs clearance.
Delivers goods through the rails of water transport, which is already at the port of shipment.

The moment of transfer of risk, according to the term " CFR Incoterms 2010", occurs when the goods are loaded on board the vessel. The seller is engaged in the conclusion of the contract and pays the freight and costs of delivering the goods on board the vessel. When using this term, it must be remembered that risk and cost are transferred in two ways. various places. Therefore, in the contract, it is necessary to clearly indicate not only the port of destination itself (the place of transfer of costs), but also the port of shipment (the place of transfer of risks).

Further risks will be borne by the buyer. If unloading on water transport is not needed, the term " CPT Incoterms 2010". In this case, the seller delivers the goods to the specified port and transfers them to the buyer or his carrier. All further fate goods, including insurance, becomes the responsibility of the buyer or his representative.

If the mode is observed CIF Incoterms 2010”, the seller delivers the goods directly on board the vessel, bears the cost of transporting them to the port of destination, and also pays for cargo insurance upon delivery. Once the goods have arrived at the port of destination, the responsibility passes to the buyer.

Using the term "CIF", the seller has the right to insure the cargo at a minimum rate. If the buyer wants to increase the insurance at the expense of the seller, this is stipulated in the contract or additional agreement. In addition, the buyer can increase the amount of insurance at his own expense. When using this term, it must be remembered that costs and risks also pass in two different places. That is why the contract should clearly indicate not only the port of destination (as the transfer of costs), but also the port of shipment (as the transfer of risks).

The last term, "CIP", shows that all costs for the delivery of goods to the destination, as well as all responsibility, lie with the seller. Goods insurance is similar to the CIF term. The seller's liability is terminated upon delivery of the goods to the carrier named by the buyer. If there are several carriers, then the responsibility ends after the delivery of the goods to the first of them. The buyer bears all risks and additional costs from the moment the goods are delivered.

Delivery condition	Meaning	Responsibilities of the Seller	Buyer Responsibilities
	The goods are delivered to the port of the customer, but without unloading. The seller is obliged to deliver the goods on board the vessel or to deliver the goods in this manner.	1. It is possible to provide the Buyer with the goods themselves and all papers for them in electronic form; 2. If necessary, obtain at your own expense, at your own risk, a license or other permits for the export of goods; 3. Conclude a contract from the specified point of delivery to the port of destination. The contract is concluded on standard conditions, all shipping costs to the port of destination are borne by the Seller; 4. Place the goods on board the vessel, or by providing the goods which have been so delivered; 5. Deliver the goods on the agreed date, in the agreed manner which is customary for that port; 6. Until delivery of the goods on board, bear all risks of loss and damage to the goods; 7. Prior to the delivery of the goods on board, pay all costs related to it, including freight, the costs of loading the goods onto the ship. If necessary, pay all duties, fees, taxes and other payments for customs clearance of exports; 8. Notify the Buyer about the completion of the delivery, provide him with transport and shipping documents. The number of originals and copies is agreed in advance; 9. Bear the cost of checking the goods, that is, their quality, weight, size, quantity. The seller, at his own expense, pays for the packaging of the goods, if necessary, and is responsible for its labeling.	1. Pay for the goods at the price specified in the contract; 2. Obtain an import license or other official certificate, handle import customs formalities; 3. The Buyer's obligations do not include the signing of the contract of carriage and the contract of cargo insurance (it should be noted that the Seller is also not obliged to conclude an insurance contract); 4. From the moment of delivery, bear the risks of loss and damage to the goods; 5. From the moment of delivery of the goods, bear all costs of the goods, excluding the costs of export and delivery. However, this includes the costs of importing the goods, as well as any additional costs for transit, unloading the goods, paying fees when transporting it through a third country, if they are not assigned to the Seller by the contract of carriage, as well as the costs of additional insurance; 6. Inform the Seller of the terms of shipment and indicate the place of delivery of the goods; 7. Accept shipping and transport documents from the Seller if they are correct and contain all agreed information.
	The goods are insured and delivered to the Buyer's port. The seller must deliver the goods on board the ship or provide the goods so supplied.	1. Provide the Buyer with the goods and accompanying documents, including equivalent electronic records; 2. If necessary, at your own expense and risk, obtain an export license or all other permits for the export of the goods; 3. Conclude a contract for transportation from the specified point of delivery to the port of destination. The costs of delivery to the port of destination are borne by the Seller, the contract is concluded on standard terms; 4. Conclude an insurance contract at your own expense before the port of destination. Allowed if the insurance meets the minimum coverage C conditions stipulated by the Cargo Insurance Institute (LMA/IUA). Insurance must cover at least 110% of the value of the goods, carried out in the currency of the contract of sale. The Buyer acts as the beneficiary under the insurance contract, he also receives the insurance policy; 5. Deliver the goods on board the ship or by providing the goods so delivered; 6. Deliver the goods on the agreed date and in the agreed manner which is customary for the given port; 7. Until delivery on board the ship, assume all risks of loss or damage to the goods; 8. Before the delivery of the goods on board, pay the costs of freight, loading the goods on board the ship, and insurance. If necessary, then pay all duties, fees, taxes and other payments that are associated with the customs clearance of goods for export; 9. Notify the Buyer of the completion of the delivery, provide all transport and shipping documents, both originals and copies; 10. Pay the cost of checking the weight, size, quantity and quality of the goods. The seller is responsible for the labeling and packaging of the goods, if any.	1. Pay for the goods at the cost specified in the contract; 2. Obtain a license and other permits to import goods, at your own expense, at your own risk. Carry out customs formalities for the import of goods; 3. The buyer is not obliged to conclude a contract for the carriage and insurance of cargo; 4. From the moment of delivery of the goods, bear all risks of loss or damage to the goods; 5. From the moment of delivery, bear all the costs of the goods, excluding the costs of its export and delivery. This includes the costs of importing the goods, all additional costs for transit, insurance, unloading, payment of fees when transporting through a third country, if they are not assigned to the Seller by the contract; 6. Inform the Seller of all data on the timing and place of delivery; 7. Accept transport and shipping documents provided by the Seller, if they are properly executed and contain all the information agreed in advance
	The goods are delivered to the Buyer's carrier at a pre-agreed destination.	1. Provide the Buyer with both the product itself and the relevant accompanying documents, including equivalent electronic records; 2. If necessary, obtain a license and all permits for export, at your own risk and expense; 3. Conclude a contract for the transportation of goods from the agreed place of delivery to the destination. The contract is executed on the usual terms, all shipping costs to the destination are the responsibility of the Seller. Delivery means the transfer of goods to the specified Carrier with whom the contract was signed; 4. Provide the Buyer with information to obtain insurance. These conditions do not provide for compulsory insurance; 5. Until the moment of transfer of the goods to the Carrier, bear all the risks of loss and damage to the goods; 6. Until the moment of delivery of the goods, bear all costs associated with it, including loading and transportation. The seller pays all fees under the contract of carriage, and if necessary, also all taxes, duties, fees and other payments related to customs clearance for export; 7. Notify the Buyer of the completed delivery, provide transport and shipping documents, including those required to receive the goods from the Carrier, in the agreed number of copies and originals; 8. Pay the costs of checking the weight, quality, quantity, size of the goods, pack and mark it properly, if necessary.	1. Pay the Seller the cost of the goods specified in the contract; 2. Obtain a license and permits to import goods, at your own risk and expense, carry out customs clearance; 3. The buyer is not obliged to conclude an insurance contract; 4. From the moment of delivery of the goods, bear all risks of loss and damage to the goods; 5. From the moment of delivery, assume all costs for the goods, excluding export and delivery costs. At the same time, import costs, additional transit costs, fees when crossing the territory of a third state, unloading are borne by the Buyer, unless otherwise provided by the contract; 6. Notify the Seller of the place and terms of delivery; 7. Accept shipping and shipping documents from the Seller, check that they are properly executed and include all required information.
	The goods are insured and delivered to the Buyer's carrier at the agreed place.	1. Provide the Buyer under the terms of the contract with the goods and all accompanying documents for it, including all their equivalents in in electronic format; 2. If necessary, obtain a license and all permits related to export at your own expense; 3. Conclude a contract involving the transportation of goods from the specified place of delivery to the agreed destination. The terms of the contract are normal, all shipping costs to the specified point are borne by the Seller. Delivery means the transfer of goods to the carrier with whom the contract was concluded, within the agreed time; 4. Conclude at your own expense a cargo insurance contract from the place of delivery to the destination. Insurance is allowed to meet the minimum coverage under paragraph C of the Institute's Cargo Insurance Terms and Conditions (LMA/IUA). At the same time, insurance must cover at least 110% of the value of the goods and be realized in the currency of the contract of sale. The beneficiary, according to the insurance contract, is the Buyer, who receives the insurance policy; 5. Until the moment of transfer at the specified place, bear all risks of loss or damage to the goods. Loading and transportation costs are also the responsibility of the Seller, as well as taxes, duties, fees, customs clearance of goods for export; 6. Notify the Buyer about the delivery, provide him with documents, including those for receiving cargo from the Carrier, shipping and transport documents in the agreed number of copies and originals; 7. Pay the costs of checking the quantity, quality, size and weight of the goods, as well as packaging and labeling, if necessary.	1. Pay the cost of the goods specified in the contract; 2. Obtain at your own expense all licenses and permits for import; 3. The buyer is not obliged to conclude insurance and transportation contracts; 4. From the moment of transfer, take all risks of loss or damage to the goods; 5. From the moment of transfer, bear all costs of the goods, except for export costs. The Buyer bears the costs of import, transit, unloading, transportation through a third country, if they are not assigned by the contract to the Seller; 6. Notify the Seller about the time and place of delivery of the goods; 7. Accept all shipping and transport from the Seller, if they are properly executed and contain all the necessary information.

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Peculiarities of application of group D delivery terms (Arriva delivery)

This category was significantly changed in 2010. New modes appeared in it (“ DAP Incoterms 2010" and " DAT Incoterms 2010""), and the old ones (" DDU Incoterms”, “DAF Incoterms”, “DEQ Incoterms” and “DES Incoterms”), which were valid in the 2000 version, have been deleted.

The "DAT" mode involves the delivery of cargo to the terminal, for example, railway, aviation, warehouse, and so on. Having cleared the goods at customs, handing it over to the buyer or carrier, the seller removes all responsibility for the goods. This term is used both for any single mode of transportation, and for a combination of different modes of transport.

Terms of the DAR Incoterms» are similar to the previous regime, but the seller delivers the goods directly to the buyer at the destination, where it will need to be unloaded.

Conditions "DDP Incoterms 2010 were adopted in 2000. They involve the delivery of goods to the place indicated by the buyer. The seller pays the duty, provides the buyer with the goods cleared at customs, but not unloaded at the place of unloading. In this case, the seller bears all risks, as well as the costs of delivery of the goods, including duties, taxes, and so on, responsibility for damage and loss of goods. The seller is also engaged in import clearance, pays all costs associated with this. Provisions may be added that will exempt the seller from paying certain additional formalities. This division of responsibility applies regardless of the type of delivery.

The term "DDP Incoterms" does not apply if the seller cannot obtain papers to import the goods. From the contract, on the terms of mutual agreement, certain obligations of the seller may be excluded. This will require an additional agreement or a separate clause in the document.

Delivery condition	Meaning	Responsibilities of the Seller	Buyer Responsibilities
	Delivery of goods is carried out in the specified terminal. The seller's obligations are terminated when he has delivered the unloaded goods to the terminal. A terminal can mean a warehouse, a pier, a railway station, and so on.	1. Provide the goods and all accompanying documents for it, including in electronic form, to the Buyer under the terms of the contract; 2. If necessary, then obtain all export documents, carry out all customs procedures related to the export of goods, as well as its transportation through another country; 3. Conclude a contract of carriage to the specified terminal at your own expense. If a specific terminal is not specified in the contract, the Seller has the right to choose the most suitable terminal for him; 4. Pay for the unloading of goods from the vehicle that arrived at the terminal at the specified location; 5. Bear all risks of loss or damage until delivery and unloading; 6. Pay for the costs of checking the weight, quality, size, quantity of goods, deal with its packaging and labeling, if necessary.	1. Pay the price of the goods specified in the contract; 2. Get all documents related to the import. Handle customs clearance of imports; 3. From the moment of delivery of the goods, take all risks of loss and damage to the goods; 4. From the moment of delivery of the goods, take all costs for it, as well as additional costs for the Seller caused by the fact that the Buyer did not fulfill his obligations;
	Delivery is carried out at the specified point. The obligations of the Seller are considered fulfilled at the moment of providing the Buyer with the goods ready for unloading from the transport	1. Provide the goods and all documents for it to the Buyer; 2. Complete all customs formalities and obtain a license for export and transportation through another country; 3. Pay for and provide transportation to the specified destination. If a specific point of delivery is not specified in the contract of carriage, the Seller may choose any convenient point at the place of destination; 4. Deliver the goods to the Buyer for vehicle prepared for unloading at the named point or place of destination; 6. Bear all costs of unloading at the destination, if the contract of carriage so provides; 7. Pay for the cost of checking the quality, size, weight, quantity of the product, pack it and label it properly, if necessary.	1. Pay for the goods at the price specified in the contract; 2. Complete customs formalities and obtain an import license; 3. Bear all risks of loss or damage to the goods from the time of delivery; 4. Pay for the unloading of goods at the destination, unless otherwise specified by the contract; 5. From the moment of delivery, bear all the costs of the goods, as well as pay the costs incurred by the Seller due to the Buyer's failure to fulfill his obligations; 6. Notify the Seller about the acceptance of the goods.
	The goods are delivered to the customer cleared of all risks and duties and risks. The seller is engaged in customs clearance of the goods, his duties end at the time of delivery of the goods to the specified place.	1. Transfer the goods and documents to the Buyer, as required by the contract; 2. Obtain a license and all other documents for export, go through all customs formalities related to export; 3. At his own expense, provide transportation to the specified destination. If a specific point of delivery has not been specified in the contract, if there are several such points, the Seller may deliver the goods to the most suitable point at the specified destination; 4. Deliver the goods to the Buyer on a vehicle already prepared for unloading at the specified point or place of destination; 5. Until delivery, bear all risks of loss or damage to the goods; 6. If necessary, pay fees, taxes when importing / exporting, incur similar costs when transiting through a third country; 7. Take the cost of checking the quantity, weight, quality and size of the goods, pack them in labeled containers, if necessary.	1. Pay for the goods the amount specified in the contract; 2. Engage in customs clearance of imports, obtain an import license and other necessary documents in this case; 3. Since the delivery of the goods, take all bear all the risks of loss or damage to the goods; 4. Pay the costs of unloading the goods from the arrived vehicle at the specified destination, if the contract does not impose such costs on the Seller; 5. From the moment of delivery of the goods, bear all costs for it, as well as pay the costs incurred by the Seller due to the fact that the Buyer did not fulfill his obligations; 6. Notify the Seller that the goods have been accepted.

Incoterms 2010

1 Purpose and scope of Incoterms 2 Why are Incoterms revised? 3 Incoterms 2010 (Incoterms 2010) 4 Incoterms 2010 classification 5 Rules for intranational and international trade 6 Explanations 7 Electronic Communications 8 Insurance Coverage 9 Security Controls and Required Information 10 Terminal Processing Costs 11 Subsequent Sales 12 Changes to Incoterms 13 Terms 14 Incoterms 2010 Structure 15 How to Use Incoterms 2010 Rules

Purpose and scope of Incoterms

The purpose of Incoterms is to provide a set of international rules for the interpretation of the most widely used trade terms in the field of foreign trade. In this way, the ambiguity of different interpretations of such terms in different countries can be avoided or at least greatly reduced.

Often the contracting parties are not familiar with the different trading practices in their respective countries. This can lead to misunderstandings, disagreements and litigation with the resultant waste of time and money. To solve all these problems, the International Chamber of Commerce published for the first time in 1936 a set of international rules for exact definition trade terms. These rules are known as Incoterms 1936.

Amendments and additions were later made in 1953, 1967, 1976, 1980, 1990, 2000 and now, in 2010 (in force - from January 01, 2011) to bring these rules in line with modern international trade practice.

It should be emphasized that the scope of Incoterms is limited to issues related to the rights and obligations of the parties to the contract of sale in relation to the supply of goods sold (the word "goods" here means tangible goods, excluding intangible goods such as computer software).

Incoterms are not an international treaty. But in case of reference to the Incoterms delivery basis in the contract, various state authorities, primarily customs, as well as state courts considering foreign economic disputes, are required to take into account the provisions of Incoterms. In some countries, Incoterms has the force of law, and this is especially important when concluding supply contracts with residents of these countries, in terms of determining the applicable law to the transaction.

Having concluded a deal with partners from other countries and not wanting to be guided by Incoterms, this circumstance should be specifically stipulated. In our Russia, Incoterms is advisory in nature, and only the provisions of the contract that have a link to Incoterms have legal force. But, if the contract refers to the delivery basis according to Incoterms, but other clauses of the contract contradict the terms of delivery used according to Incoterms, then the relevant clauses of the contract, and not Incoterms, should be applied: it is considered that the parties have established certain exceptions from Incoterms in the interpretation of individual delivery bases.

When choosing one or another basis of delivery, it is necessary to strictly adhere to the terminology of Incoterms. It is better to specify the specific term in English language(as in Incoterms). When using this or that term, it is necessary to indicate a specific geographical location (and sometimes the exact place, as, for example, in the case of delivery under the ExWorks basis), in which the seller is considered to have fulfilled his obligations to transport the goods, bear the risk of accidental loss or damage to the goods, etc. d.

Be sure to refer to the edition of Incoterms. When concluding a foreign economic contract, it is necessary to clearly define the details of the basic terms of delivery. That is, before specifying the delivery basis in the contract, for example, FOB, it is necessary to carefully study the customs of the port indicated in the basis, the charter agreement, in order to accurately allocate costs between the buyer and the seller. All delivery bases that require the seller to provide insurance in the event of insured events are covered by insurers on minimum terms (goods cost + 10%).

Incoterms rules are trade terms abbreviated by the first three letters, reflecting entrepreneurial practice in contracts for the international sale of goods. Incoterms rules define mainly the obligations, costs and risks involved in the delivery of goods from sellers to buyers.

Why are Incoterms being revised?

The main reason for successive revisions of Incoterms was the need to adapt them to modern commercial practice. Thus, in the 1980 revision, the term Free Carrier (now FCA) was introduced to address the frequent cases where the point of receipt of goods in maritime trade was no longer the traditional FOB (passing the ship's rail) point, but a point on land before loading on board the ship, where the goods were packed in a container for subsequent transportation by sea or by a combination of different vehicles (so-called multimodal or multimodal transport).

Further, with the revision of Incoterms in 1990, the articles relating to the obligation of the seller to provide proof of delivery made it possible to replace paper documentation with EDI messages, provided that the parties agreed in advance to communicate by e-mail. Needless to say, efforts are constantly being made to improve the drafting and presentation of Incoterms in order to facilitate their practical implementation. For example, in the 2000 amendments, significant changes were made to the area of customs clearance and customs payments under the FAS and DEQ terms; and in 2010, the terms: DDU, DAF, DEQ, DES, are excluded from Incoterms 2010 altogether.

Incoterms 2010 (Incoterms 2010)

Updated international rules for the interpretation of the most commonly used trade terms in international trade

Incoterms 2010 came into force on January 1, 2011. The advantage of Incoterms 2010 rules is that they have a wider scope. The version of the Incoterms Rules in the 2000 edition of Incoterms was used when concluding a foreign trade contract, while the 2010 edition will allow these Rules to be applied in international and domestic trade within one state or integration associations, such as the EU, the CIS and others.

Two new rules in Incoterms 2010 (Incoterms 2010) - DAT and DAP - replaced the rules DAF, DES, DEQ, DDU in Incoterms 2000 (Incoterms 2000) Thus, the number of rules in Incoterms 2010 was reduced from 13 to 11. This was achieved the introduction of two new rules that can be used regardless of the agreed modes of transport - DAT - delivered to the terminal, and DAP - delivered to the place - for Incoterms 2010. In both new rules, delivery is made to a named destination: at DAT, at the disposal of the buyer unloaded from arriving vehicles (as in DEQ 2000) and in DAP, at the disposal of the buyer, but ready for unloading (as with DAF - Delivery at Frontier, DES, DDU - Delivery Duty Free - Incoterms 2000 rules). These new rules made Incoterms 2000 DES and DEQ redundant. The reference to the terminal in the term DAT (Delivered at Terminal) may be in a port, and therefore the term DAT can be safely used where the term Incoterms 2000 DEQ (Delivered from Quay) has been applied.

Likewise, the arrived "vehicle" in DAP (Delivered at Destination) could be the vessel and the agreed destination the port of destination: therefore DAP (Delivered at Destination) could safely be used where Incoterms were applied. 2000 DES (Delivery Ex Ship). These new rules, like their predecessors, are "delivered terms", i.e. the seller bears all costs (other than import clearance costs, if applicable) and risks associated with bringing the goods to the agreed destination.

The new rules take into account the requirements of modern container transport, additions have been made to the terms FOB, CFR and CIF - now Incoterms can choose the correct term for a trade contract by introducing new rules for each term.

Classification Incoterms 2010

11 Incoterms 2010 rules were divided into two groups (there were 4 groups in Incoterms 2000):

Incoterms 2010 rules for any mode of transport

EXW - Ex factory

FCA - Free carrier

CPT - Carriage Paid To

CIP - Carriage and insurance paid up to

DAT - Supplied in the Terminal

DAP - Delivery on site

DDP - Delivered Duty Paid

Incoterms 2010 rules for sea and inland water transport

FAS - Free along the ship's side

FOB - Free on board

CFR - Cost and Freight

CIF - Cost, insurance and freight

Incoterms 2010 rules for any mode of transport includes seven rules that can be used regardless of the chosen mode of transport and regardless of whether one or more than one mode of transport is used for transportation, this type includes: EXW, FCA, CPT, CIP, DAT, DAP and DDP. They can be used even in the absence sea view transportation. It is important to remember, however, that these rules may be used in cases where the vessel is used for part of the carriage. Incoterms 2010 rules for sea and inland water transport are used when the place of dispatch and the place to which the goods are transported to the buyer are both ports. FAS, FOB, CFR and CIF rules belong to this type of delivery. Also, in the last three rules, the editors of Incoterms 2010, amended, all references to the ship's rails as a point of delivery were omitted in favor of the term "on board" the ship. This more accurately reflects today's commercial realities.

Rules for domestic and international trade

Incoterms have traditionally been used in international sales contracts when the goods crossed the border. In various parts of the world, the creation of trade alliances, such as European Union made less important visible control of the goods as they passed through the borders of the respective parties. Therefore, in the subheadings of the Incoterms 2010 rules, it is explicitly stated that these rules can be used both in contracts for the international sale of goods and in domestic contracts for the sale. As a result, the Incoterms 2010 rules in a number of paragraphs clearly emphasize that the obligation to carry out export-import formalities exists only when applicable. Two developments convinced the ICC that it was timely to move in this direction. First, merchants make extensive use of Incoterms rules in domestic sales contracts. Secondly, there is a growing desire in the US to use Incoterms in domestic trade instead of the shipping and delivery terms previously enshrined in the US Uniform Commercial Code.

Explanations

Before each term Incoterms 2010 you will find explanations. They highlight the main points for each Incoterm term, for example: when they should be applied, when the risk passes, how the costs are distributed between the seller and the buyer. These clarifications do not form part of the current Incoterms 2010 rules, but are intended to assist the user in the careful and efficient selection of the appropriate international trade term for a particular transaction.

Electronic communications

Previous versions of the Incoterms rules defined documents that could be replaced by electronic messages (EDI messages). The new edition of the rules provides for the possibility of replacing all paper documents with electronic forms of documents and electronic records, if agreed by the parties. At the same time, electronic forms of documents and electronic records will have the same legal value as paper documents. This formula facilitates the evolution to new electronic procedures during the period of validity of Incoterms 2010.

Insurance cover

The Incoterms 2010 Rules represent the first version of Incoterms since the revision of the London Underwriters Rules (the Institute Cargo Clauses) and take into account the changes made to these Rules. In Incoterms 2010, information relating to insurance obligations is placed in articles A3/B3, which deal with contracts of carriage and insurance. These provisions have been moved from articles A10 / B10 of Incoterms 2000, which were of a general nature. The wording of the AZ/BZ articles on insurance has also been amended to clarify the obligations of the parties in this regard.

Security control and necessary information for this

Currently, there is increasing concern for the safety of the movement of goods, requiring verification that the goods do not pose a threat to people's lives or their property for reasons not related to its natural properties. Therefore, in articles A2 / B2 and A10 / B10 of Incoterms 2010, the issues of cargo safety are covered as much as possible, taking into account the difference in legal systems. Responsibilities are shared between the seller and the buyer to implement or assist in the implementation of security control formalities, such as, for example, a seizure information system. In particular, the rules provide for mandatory minimum insurance coverage when using the terms CIP and CIF, which does not include coverage for risks arising from a piracy attack. The seller and the buyer will be forced to cooperate, which was not the case before. This is due to the fact that Incoterms 2010 establishes the obligation to provide information in order to achieve export-import clearance (for example, information regarding the supply chain).

Terminal processing costs

Under the terms of Incoterms CPT, CIP, CFR, CIF, DAT, DAP and DDP, the seller is obliged to take all necessary measures to ensure that the goods are transported to the agreed destination. When the freight is paid by the seller, it is in essence paid by the buyer, since freight charges are usually included by the seller in the total price of the goods. Freight costs sometimes include the costs of handling and moving the goods at the port or container terminal, and the carrier or terminal operator may charge these costs to the buyer receiving the goods. In such circumstances, the buyer is interested in avoiding double payment for the same service - once to the seller as part of the total price of the goods and the second time separately to the carrier or terminal operator. Incoterms 2010 managed to avoid this by clearly allocating such costs in articles Ab/Bb of the respective terms.

Subsequent sales

In the commodity trade, unlike in the finished goods trade, the goods are often sold several times consecutively during the transit period. If this is the case, the seller in the middle of the chain "does not ship" the goods, because the goods have already been shipped by the first seller in this chain. Therefore, the seller in the middle of the chain fulfills his obligations towards the buyer, not by shipping the goods, but by providing the shipped goods. For the purpose of clarification, the obligation to “deliver goods shipped” has been included in the relevant Incoterms 2010 as an alternative to the obligation to ship goods in the relevant Incoterms.

Changes to Incoterms

Sometimes the parties wish to supplement any Incoterms rule. Incoterms 2010 does not prohibit such an addition, but there is a danger regarding this. In order to avoid unwanted surprises, it is advisable for the parties in their contract to provide as accurately as possible the effect expected from such additions. For example, if the contract changes the distribution of costs compared to Incoterms 2010 rules, the parties need to make it clear whether they intend to change the point at which the risk passes from the seller to the buyer.

Terms

As in Incoterms 2000, the obligations of the seller and the buyer are presented in a mirror image, column A contains the obligations of the seller, and column B contains the obligations of the buyer. These obligations may be performed directly by the seller or buyer, or sometimes, in accordance with the terms of the contract or under applicable law, through intermediaries such as carriers, freight forwarders, or other persons nominated by the seller or buyer for a specific purpose.

The text of Incoterms 2010 is self-sufficient. However, to assist users, the contents of the symbols used throughout the text are given below.

Carrier: for the purposes of Incoterms 2010, the carrier is the party with whom the contract of carriage is concluded.

Customs formalities: requirements that must be completed in accordance with applicable customs regulations and may include obligations regarding documents, security, information, or actual inspection of the goods.

Delivery: This concept is multifaceted in commercial law and practice, but Incoterms 2010 uses it to denote the moment when the risk of loss or damage to the goods passes from the seller to the buyer.

Shipping documents: this concept is used in the heading of paragraph A8. It means a document confirming the delivery (transfer) of goods. For many Incoterms 2010 terms, a shipping document is a transport document or a corresponding electronic record. However, according to the terms EXW, FCA, FAS, FOB, a receipt can also be a shipping document. The shipping document may also have other functions, such as being part of the payment mechanism.

Electronic record or procedure: A set of information consisting of one or more electronic messages and, when applicable, functionally performing the same function as a paper document.

Packaging: this concept is used for several purposes:

1. The packaging of the goods must comply with the requirements of the sales contract

2. The packaging of the goods means that the goods are suitable for transportation.

3. Storage of packaged goods in a container or other means of transport.

In Incoterms 2010, the concept of packaging includes both the first and second specified meaning. Incoterms 2010 does not regulate the obligations of the parties to stow the goods in a container, and, moreover, if necessary, it is advisable for the parties to provide for this in the sales contract.

Structure of Incoterms 2010

The following table is a classification of trade terms.

STRUCTURE OF INCOTERMS 2010

EXW Any mode of transport Ex factory (... name of place)

FCA Any modes of transport Free carrier(... named place of destination)

FAS Maritime and inland waterway transport Free alongside ship (... name of port of shipment)

FOB Maritime and inland waterways Free on board (...named port of shipment)

CFR Maritime and Inland Waterway Cost and Freight(... named port of destination)

CIF Maritime and Inland Water Transport Cost, Insurance and Freight (... named port of destination)

CPT Any mode of transport Carriage paid to (... named place of destination)

CIP Any mode of transport Carriage and insurance paid to (... named place of destination)

DAT Any modes of transport new!!! Delivery to terminal (...terminal name)

DAP Any modes of transport new!!! Delivery at location (... name of location)

DDP Any mode of transport Delivered Duty Paid (...named place of destination)

How to use Incoterms 2010 rules

If you wish to apply Incoterms® 2010 (Incoterms 2010), you must clearly indicate this in the contract in the following way: "[selected Incoterms, including named place, in accordance with] Incoterms® 2010" / Incoterms 2010.

The chosen Incoterm should be appropriate to the goods, the mode of transportation and, in addition, reflect the extent to which the parties intend to make additional obligations, for example, the seller's or buyer's obligation to arrange transportation or insurance. The explanations for each term provide information useful in making this choice. Whichever term is chosen, the parties should bear in mind that the interpretation of their contract may be affected by the customs of ports or other places.

The chosen Incoterm can only work if the parties have specified a point or port, and even better if the parties have specified such a point or port as precisely as possible.

A good example of such a clarification is the following: "FCA 38 Cours Albert ler, Paris, France Incoterms® 2010". According to the terms of Incoterms Ex Works (EXW, Free Factory), Free Carrier (FCA, Free Carrier), Delivered at Terminal (DAT, Delivery at the Terminal), Delivered at Place (DAP, Delivery to Destination), Delivered Duty Paid (DDP, Delivery Duty Paid), Free Alongside Ship (FAS) and Free on Board (FOB), the named point represents the place where delivery takes place and the risk passes to the buyer. According to Incoterms Carriage Paid To (CPT, Carriage Paid To), Carriage and Insurance Paid To (CIP, Carriage and Insurance Paid To), Cost and Freight (CIF, Cost and Freight) and Cost, Insurance and Freight (CIF, Cost, insurance and freight), the named point differs from the place of delivery. According to these four Incoterms, a named place means a place of destination to which carriage is paid. For the avoidance of doubt or dispute, references to such a place as a point or destination may be further defined by referring to the exact point at that point or destination.

It should be remembered that Incoterms do not represent a complete contract of sale

Incoterms rules only specify which of the parties to the contract of sale must carry out the necessary actions for transportation and insurance when the seller hands over the goods to the buyer, and what costs each of the parties bears. Incoterms rules do not indicate the price to be paid or the method of payment. They also do not regulate the transfer of ownership of the goods or the consequences of a breach of contract. These matters are usually set out in express terms in the contract of sale or in the law applicable to such contract. The parties, however, should be aware that a strictly binding national law (mandatory local law) may take precedence with respect to any aspect of the contract of sale, including the chosen term Incoterms.

Incoterms rules have become an important part of everyday language trade. The terms are included in contracts for the sale of goods around the world, define the rules and provide guidance for importers, exporters, lawyers, carriers, insurers and students of international trade.

REGULATIONS FOR ANY TYPE OR MODES OF TRANSPORT

EXW Ex Works / Ex Works

"Ex Works / Free Works" means that the seller delivers when he places the goods at the disposal of the buyer at his premises or at another agreed place (ie factory, warehouse, etc.). The seller is not required to load the goods onto any means of transport, nor is he required to carry out the formalities required for export, if any.

FCA Free Carrier / Free carrier

"Free Carrier / Free Carrier" means that the seller delivers the goods to the carrier or another person nominated by the buyer at his premises or in another specified place. The parties are strongly advised to identify as clearly as possible the point at the named place of delivery, as the risk passes to the buyer at that point.

CPT Carriage Paid to

"Carriage Paid to" means that the seller delivers the goods to the carrier or another person nominated by the seller at the agreed place (if such place is agreed by the parties) and that the seller is obliged to conclude a contract of carriage and bear the costs of carriage necessary to deliver the goods to the agreed destination.

CIP Carriage and Insurance Paid to

"Carriage and Insurance Paid to" means that the seller delivers the goods to the carrier or another person nominated by the seller at the agreed place (if such place is agreed by the parties) and that the seller is obliged to conclude a contract of carriage and bear the costs of carriage necessary to deliver the goods to the agreed destination. The seller also concludes an insurance contract covering the risk of loss or damage to the goods during transport.

DAT Delivered at Terminal

"Delivered at Terminal" means that the seller delivers when the goods, unloaded from the arriving means of transport, are placed at the disposal of the buyer at the agreed terminal at the named port or place of destination. "Terminal" includes any place, closed or not, such as a wharf, warehouse, container yard, or road, rail or air cargo terminal. The seller bears all risks associated with the delivery of the goods and their unloading at the terminal at the named port or place of destination.

DAP Delivered at Place

"Delivered at Place" means that the seller delivers when the goods are placed at the disposal of the buyer on an arriving vehicle ready for unloading at the agreed destination. The seller bears all risks associated with the delivery of the goods to the named place.

DDP Delivered Duty Paid

"Delivered Duty Paid" means that the seller delivers when the goods are placed at the disposal of the buyer, cleared of customs duties required for importation, on the arrived means of transport, ready for unloading at the named place of destination. The seller bears all costs and the risks associated with the delivery of the goods to the place of destination, and is obliged to carry out the customs formalities necessary not only for export, but also for import, pay any fees levied on export and import, and complete all customs formalities.

REGULATIONS FOR MARITIME AND INLAND WATER TRANSPORT

FAS Free Alongside Ship

"Free Alongside Ship" means that the seller is deemed to have fulfilled his obligation to deliver when the goods are placed along the side of the buyer's nominated vessel (i.e. on a quay or barge) at the agreed port of shipment. The risk of loss or damage to the goods passes when the goods are placed along the side of the vessel and from that moment the buyer bears all costs.

FOB Free on Board

"Free on Board" means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, or procure the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board the ship and from that moment the buyer bears all costs.

CFR Cost and Freight / Cost and Freight

"Cost and Freight" means that the seller delivers the goods on board or delivers the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller must contract and pay all costs and freight necessary to bring the goods to the named port of destination.

CIFCostInsurance and Freight /Cost, insurance and freight

"CostInsurance and Freight / Cost, Insurance and Freight" means that the seller delivers the goods on board the ship or delivers the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller must contract and pay all costs and freight necessary to bring the goods to the named port of destination.The seller also concludes an insurance contract covering the risk of loss or damage to the goods during transport.

It sometimes creates an unequal understanding in different legislations of the same legal terms and definitions. In today's world, where everything is interconnected and integrated, this is unacceptable. Different content of the same legal term in different legislations can lead to misunderstandings and disputes. However, global world requires unified approaches to the same issues and processes.

All states, including their individual private companies, interact with each other in one way or another. As a rule, this happens within the legal framework, in the scope of the agreements concluded between them. However, in different countries the approach to law is also different, as sometimes evidenced by the above difference in the content of the same concepts. At the same time, it is important that this difference does not affect the efficiency and stability of transactions. As you know, the most frequent and natural interaction of various legislations is manifested primarily in the field of international trade. Here, an unequal approach to the same terms can lead to losses, which, of course, is unacceptable.

To address these issues, the idea arose to develop unified terms that would be interpreted in the same way by all participants, regardless of national legislation. As a result of hard work a large number experts in the field of international trade law, the business community was presented with international rules (in the form of terms) that provide unambiguous interpretations of the most widely used terms in the field of foreign trade. The development of such terms was undertaken by the International Chamber of Commerce - an independent non-profit organization founded in 1919. The first edition of such rules appeared in 1936 and was subsequently constantly improved. These rules are called Incoterms ("International Commercial Terms", i.e. "terms of international trade").

Incoterms rules are essentially terms that impose a certain amount of rights and obligations on the parties to the contract, provided, of course, that these parties voluntarily wish to use them in their transaction (carried out by indicating in the contract itself that they apply Incoterms rules). This volume of rights and obligations, hidden under the abbreviation (terms) of Incoterms, is commonly referred to as the "delivery basis", which determines the most important (but not all) points of the transaction.

Please note that Incoterms are not intended to complete replacement terms of the contract, which is concluded in any case. Many issues remain outside the "delivery basis" agreed upon by the parties. Incoterms conditions do not indicate for the parties the price payable for the goods or the method of payment and do not regulate the transfer of ownership of it, as well as the consequences of breach of contractual obligations, the parties to the contract must take care of this on their own.

The "delivery basis", roughly speaking, only determines which of the parties to the transaction performs the actions necessary for transportation and insurance, when exactly the seller transfers the goods to the buyer, and also what costs each of the parties bears.

Today, Incoterms rules are an internationally recognized standard and are used throughout the world in international and domestic contracts for the sale of goods. On the territory of Russia, they fall under the definition of custom, that is, a custom that has developed and is widely used in any area of business or other activities, a rule of conduct not provided for by law, regardless of whether it is recorded in any document. At the same time, according to part 11 of Art. 1211 of the Civil Code of the Russian Federation

If the contract uses trade terms accepted in international circulation, in the absence of other indications in the contract, it is considered that the parties have agreed on the application to their relations of customs denoted by the corresponding trade terms.

The content of Incoterms terms is voluntarily recognized by the parties to the transaction unambiguously and, what is important, binding. All 11 Incoterms 2010 terms (currently last edition) are grouped into 4 groups and outwardly represents an abbreviation of three letters. The first of which indicates the place of transfer of obligations from the Seller to the Buyer.

E- at the place of departure
F- at the terminals of departure of the main carriage, the main carriage is not paid
C- at the arrival terminals of the main transportation, the main transportation is paid
D- at the buyer, full delivery

In a legal sense, this means:

group E - the obligations of the seller are minimal and limited to the provision of goods at the disposal of the buyer
group F - the seller's obligations are limited to the dispatch of goods, the main carriage is not paid by the seller;
group C - the seller organizes and pays for the transportation of goods, but does not assume the risks associated with transportation
group D - the costs and risks of the seller are maximum (the seller places the goods at the disposal of the buyer at the agreed destination and ensures the arrival of the goods).

Within the groups themselves, the obligations of the parties differ slightly, for example, in group C, according to the CIF and CIP bases, the seller is obliged to additionally insure the goods, and in group D, for example, according to the DDP condition, he must pay import duties.

The use of Incoterms in contracts is very convenient and effective for the parties to the transaction, as it makes it possible to avoid the costly consequences of accidental misunderstandings by clearly explaining the obligations of the parties, distributing the costs and risks associated with the supply of goods. Most importantly, the Incoterms rules allow the parties to achieve a uniform commercial understanding of the essence of the transaction, specifying a whole set of dispositive norms in the Civil Code of the Russian Federation, such as, for example,

Article 457
Article 458
Article 459. Transfer of risk of accidental loss of goods
Article 490. Insurance of goods
Article 510. Delivery of goods

Seven of the eleven Incoterms are applicable to any mode of transport of the main carriage:

EXW- EX WORKS / EXW	The seller delivers by placing the goods at the disposal of the buyer at his premises or at another agreed place (i.e. at the plant, warehouse, etc.). All responsibilities, such as transportation, or customs clearance, are entirely the responsibility of the buyer.
FCA- FREE CFRRIER / FREE CARRIER (with named place of delivery)	The seller delivers the goods to the carrier or another person nominated by the buyer at his premises or at another agreed place. At the same time, the seller is not obliged to carry out customs formalities for import, pay import duties or perform other customs formalities upon import.
CPT- Carriage paid to (with named place of destination)	The seller delivers the goods to the carrier or another person nominated by the seller at the agreed place (if such place is agreed by the parties) and that the seller must conclude a contract of carriage and bear the costs of carriage necessary to deliver the goods to the agreed destination. The seller fulfills his obligation to deliver when he hands over the goods to the carrier and not when the goods have reached their destination.
C.I.P. Carriage and Insurance Paid to (with named place of destination)	The seller delivers the goods to the carrier or another person nominated by the seller at the agreed place (if such place is agreed by the parties) and that the seller must conclude a contract of carriage and bear the costs of carriage necessary to deliver the goods to the agreed destination. The seller also concludes an insurance contract covering the risk of loss or damage to the goods during transport. The seller fulfills his obligation to deliver when he hands over the goods to the carrier and not when the goods have reached their destination.
DAT- Delivered at terminal (indicating the terminal at the port or destination)	The seller delivers when the goods, unloaded from the arriving means of transport, are placed at the disposal of the buyer at the agreed terminal at the named port or place of destination. The term "terminal" includes any place, closed or not, such as a wharf, warehouse, container yard, or road, rail or air cargo terminal. The seller bears all risks associated with the delivery of the goods and their unloading at the terminal at the named port or place of destination. DAT requires the seller to complete customs formalities for export, if applicable. However, the seller is not required to carry out import customs formalities, pay import duties or carry out other import customs formalities.
DAP- Delivered at place (with named place of destination)	The seller delivers when the goods are placed at the disposal of the buyer on an arriving vehicle ready for unloading at the agreed destination. The seller bears all risks associated with the delivery of the goods to the named place. DAP requires the seller to complete customs formalities for export, if applicable. However, the seller is not required to carry out import customs formalities, pay import duties or carry out other import customs formalities.
DDP- Delivered Duty Paid (with destination)	The seller delivers when the goods are placed at the buyer's disposal, cleared of customs duties required for importation, on the arriving means of transport, ready for unloading at the named place of destination. The seller bears all costs and risks involved in bringing the goods to the place of destination, and is obliged to carry out the customs formalities necessary not only for export, but also for import, pay any fees levied on export and import, and complete all customs formalities.

4 Incoterms apply exclusively to maritime transport and the transport of territorial waters

FAS- Free alongside ship	The seller is deemed to have fulfilled his obligation to deliver when the goods have been placed alongside the ship nominated by the buyer (ie on the quay or barge) at the agreed port of shipment. The risk of loss or damage to the goods passes when the goods are placed along the side of the vessel and from that moment the buyer bears all costs.
FOB- Free on Board (indicating port of shipment)	The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or arranges for the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board the ship and from that moment the buyer bears all costs.
CFR- Cost and Freight	The seller delivers the goods on board the ship or provides the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller must contract and pay all costs and freight necessary to bring the goods to the named port of destination. The seller fulfills his obligation to deliver when he hands over the goods to the carrier and not when the goods have reached their destination.
CIF- Cost, Insurance and Freight / Cost, insurance and freight (indicating port of destination)	The seller delivers the goods on board the ship or provides the goods so delivered. The risk of loss or damage to the goods passes when the goods are on board. The seller must contract and pay all costs and freight necessary to bring the goods to the named port of destination. The seller also concludes an insurance contract covering the risk of loss or damage to the goods during transport. The seller fulfills his obligation to deliver when he delivers the goods to the carrier in the manner specified in the chosen term, but not when the goods have reached their destination.

Let's summarize.

Incoterms rules are an internationally recognized standard and are used throughout the world in international and domestic contracts for the sale of goods. 11 terms "Incoterms 2010" are grouped into 4 groups (E, F, C, D) and outwardly it is an abbreviation of three letters, the first of which indicates the place of transfer of obligations from the Seller to the Buyer.

The use of Incoterms is expedient and justified if the parties to the transaction wish to standardize the most significant terms of the contract.

Incoterms governs the three most important issues:

Sharing shipping costs between seller and buyer. That is, the rules determine the specific place when the change of funding occurs
The moment is determined when the buyer replaces the seller in bearing responsibility for the risk of loss, damage or accidental destruction of the goods being moved.
The date of delivery of the goods is determined, that is, the specific moment when the seller actually must fulfill his obligations to transfer the goods to either the seller or the representative of the transport company.