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International Business Law

International Business Law. International Commercial Terms INCOTERMS. Plan. I. Introduction A. Definition and Role B. 4 groups of INCOTERMS II. Description of the INCOTERMS A. Group E B. Group F C. Group C D. Group D III. Conclusion. I. Introduction. Definition and role

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International Business Law

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  1. International Business Law International Commercial Terms INCOTERMS

  2. Plan I. Introduction A. Definition and Role B. 4 groups of INCOTERMS II. Description of the INCOTERMS A. Group E B. Group F C. Group C D. Group D III. Conclusion

  3. I. Introduction Definition and role The term INCOTERM is an abbreviation of “International Commercial Terms” and it is a term of contract of sales. There are 2 goals for the INCOTERMS: • Carriage of the goods • Export and import clearance

  4. I. Introduction 4 groups of INCOTERMS • Group E: the first group has only one trade term and placing the goods at the disposal of the buyer • Group F: the seller must hand over the goods to a nominated carrier free or risk and expense to the buyer • Group C: the seller must bear certain costs even after the critical point for the division of the risks of or damage to the goods has been reached • Group D: the goods must arrive at a stated destination

  5. I. Introduction Group E : Departure EXW: Ex Works (named place) Group F : Main Carriage Unpaid FCA: Free Carrier FAS: Free Alongside Ship (named loading port) FOB: Free On Board

  6. I. Introduction Group C : Main Carriage Paid CFR: Cost and Freight (named destination port) CIF: Cost, Insurance and Freight CPT: Carriage paid To CIP: Carriage and Insurance paid to Group D : Arrival DAF: Delivered At Frontier (named place) DES: Delivered Ex Ship (named port) DEQ: Delivered Ex Quay DDU: Delivered Duty Unpaid (named destination place) DDP: Delivered Duty Paid

  7. II. Description of the INCOTERMS EXW: Ex Works The seller makes the goods available at his premises

  8. II. Description of the INCOTERMS FCA: Free Carrier The seller hands over the goods, cleared for export, into the custody of the first carrier at the named place

  9. II. Description of the INCOTERMS FAS: Free Alongside Ship Free alongside shhip: the seller must place the goods alongside the ship at the named port

  10. II. Description of the INCOTERMS FOB: Free On Board The classic maritime trade term, Free on Board: seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship’s rail

  11. II. Description of the INCOTERMS CFR: Cost and Freight The seller must pay the costs and freight to bring the goods to the port of destination.

  12. II. Description of the INCOTERMS CIF: Cost, Insurance and Freight The same as CFR excepted that the seller must in addition procure and pay for insurance for the buyer.

  13. II. Description of the INCOTERMS CPT: Carriage paid To The general/ containerised/ multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over the first carrier

  14. II. Description of the INCOTERMS CIP: Carriage and Insurance paid to The containerised/ transport/ multimodal equivalent of CIF. The seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier

  15. II. Description of the INCOTERMS DAF: Delivered At Frontier The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier.

  16. II. Description of the INCOTERMS DES: Delivered Ex Ship Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement

  17. II. Description of the INCOTERMS DEQ: Delivered Ex Quay It means the same as DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination.

  18. II. Description of the INCOTERMS DDU: Delivered Duty Unpaid It means that the seller pays for all transportation costs and bears all risk until the goods have been delivered, but does not pay for the duty.

  19. II. Description of the INCOTERMS DDP: Delivered Duty Paid It means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty.

  20. III. Conclusion • INCOTERMS are very useful to regulate and to put some law on the international trade • Do not confuse with the American INCOTERMS, very different (FOB…). • Still some problems in spite of the new version in 2000

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