INCOTERMS ® 2010

1. INCOTERMS® 2010 American Institute for International Steel Webinar January 14, 2011 Presenters: Mary Jo Muoio, OHL Diane Raffle, OHL Moderator: Steven W. Baker, Esq.

2. What INCOTERMS ® are not: • Terms of Sale or Passage of Title • Legally required • Universal or exclusive

3. What INCOTERMS ® are: • Privately developed by the ICC • Internationally understood • Different than UCC or other terminologies • Shipping terms

4. INCOTERMS ® Should be Identified • Cite specifically • By version • Clearly spell out any modifications or variations

5. Incoterms® 2010 What to Know About Which To Use

6. Incoterms® 2010 • Series of internationally-recognized, standardized trade terms published by the International Chamber of Commerce • INternational COmmercial TERMS • Used for international and domestic transactions • Accepted by governments, legal authorities, and business

7. On sale now! • Published in book format available from the ICC at: www.iccbooks.com Incoterms® 2010 By the International Chamber of Commerce (ICC) ICC Publication No.715   2010 Edition

8. Also available as an attractive wall hanging. Suitable for framing! • Incoterms® 2010 Wallchart International Chamber of Commerce (ICC) ICC Publication No. 716 , 2010 Edition

9. Practical Impact of Change • New terms were effective January 1, 2011 • Old terms may apply to previously issued contracts • Make any necessary changes to standard contract language and forms • Inform colleagues

10. Changes—The Basics • Two Categories of Terms • Rules for any mode(s) of transportation • Rules for sea and inland waterway • Removal of 4 terms • DAF, DES, DEQ, and DDU • Inclusion of 2 new terms • DAP and DAT

11. Changes—The Basics • Documentation requirements can be met with “equivalent electronic records” • Provides for security-related requirements • Specifically addresses responsibility for terminal handling charges • Allows for sellers in-transit sales to procure goods shipped

12. Changes—The Terms • Simplification • Four categories reduced to two • 13 terms consolidated to 11

13. Incoterms® 2000 That was Then • EXW Ex Works • FCA Free Carrier • FAS Free Alongside Ship • FOB Free On Board • CRF Cost And Freight • CIF Cost, Insurance and Freight • CPT Carriage Paid To • CIP Carriage and Insurance Paid To • DAF Delivered at Frontier • DES Delivered EX Ship • DEQ Delivered EX Quay • DDU Delivered Duty Unpaid • DDP Delivered Duty Paid

14. Removed four and added two • REMOVED • DAF Delivered at Frontier • DES Delivered EX Ship • DEQ Delivered EX Quay • DDU Delivered Duty Unpaid • ADDED • DAT Delivered at Terminal • DAP Delivered at Place

15. Incoterms® 2010 This is Now • EXW Ex Works • FCA Free Carrier • FAS Free Alongside Ship • FOB Free On Board • CFR Cost and Freight • CIF Cost, Insurance and Freight • CPT Carriage Paid To • CIP Carriage and Insurance Paid To • DAT Delivered at Terminal • DAP Delivered at Place • DDP Delivered Duty Paid

16. Incoterms® USED FOR ALL MODES OF TRANSPORTATION • EX Ex Works • FCA Free Carrier • CPT Carriage Paid To • CIP Carriage and Insurance Paid To • DAT Delivered at Terminal • DAP Delivered at Place • DDP Delivered Duty Paid

17. Incoterms® 2010 USED ONLY FOR MARINE • FAS Free Alongside Ship • FOB Free On Board • CFR Cost and Freight • CIF Cost, Insurance and Freight

18. EX WORKS (EXW) (named place) • Named place is where the shipment originates – usually the seller’s premises • Seller must have goods available and packaged when promised • Buyer must arrange pre-carriage, export clearance, main carriage, import clearance and on carriage • Neither party is required to insure • Transport Mode: All

19. Free Carrier (FCA)(named place) • Named place is either the place where the shipment originates such as the seller’s premises or another place agreed within the seller’s country • Seller is to have goods available and packaged when promised, load collecting vehicle, pre-carriage and export clearance • Buyer must unload delivering vehicle, main carriage, import clearance and on carriage • Neither party is required to insure • Transport mode: All modes

20. Free Alongside Ship (FAS)(named port) • Named port is alongside a vessel at port on the seller’s side • Seller is to deliver goods, export packed alongside the buyer-designated vessel at the port on the seller’s side along with export clearance • Buyer loads vessel, arranges main carriage, import clearance and on carriage • Neither party is required to insure • Transport Mode: Vessel Only

21. Free on Board (FOB)(named port) • Named port is loaded on a vessel at a port on the seller’s side • Seller delivers the goods on board the buyer-designated vessel at the port on the seller’s side along with export clearance • Buyer arranges main carriage, import clearance and on carriage • Neither party is required to insure • Transport mode: Vessel Only

22. Cost & Freight (CFR)(named port) • Named port is on the buyer’s side • Seller delivers goods export packed on board the seller’s designated vessel at the port on the seller’s side, pays transportation costs to the agreed port on buyer’s side, and arranges export clearance • Buyer arranges vessel unloading, import clearance and on carriage • Neither party is required to insure • Transport Mode: Vessel Only

23. Carriage Paid To (CPT)(named place) • Named place on buyer’s side • Seller delivers goods export packed to the carrier for transportation to the named place of destination and will pay all transportation costs thereto along with arranging export clearance • Buyer arranges import clearance and on carriage • Neither party is required to insure • Transport mode: All modes

24. Cost, Insurance and Freight (CIF)(named port) • Named port is on buyer’s side • Seller delivers goods export packed on board the seller’s-designated vessel at port on seller’s side, pays all transportation costs to agreed port on the buyer’s side and arranges export clearance • Buyer arranges import clearance and on carriage • Seller must provide at least minimum coverage • Transport Mode: Vessel Only

25. Cost, Insurance Paid (CIP)(named place) • Named place on buyer’s side • Seller delivers goods export packed to the carrier for transportation to the named place of destination and pays all transport costs thereto along with arranging export clearance • Buyer arranges import clearance and on carriage • Seller must provide at least minimum insurance coverage • Transport Mode: All Modes

26. Delivered at Terminal (DAT)(named place) • Named place at terminal on buyer’s side (a terminal at the destination port or a terminal not far beyond the destination port where it’s yet to be cleared by Customs) • Seller arranges export clearance and delivers goods export packed to the named destination terminal, pays all transport costs thereto and unloads • Buyer arranges import clearance and on carriage • Neither party is required to insure • Transport Mode: All Modes

27. Delivered at Place (DAP)(named place) • Named place on buyer’s side • Seller arranges export clearance, delivers export packed goods to the named place of destination and pays all transportation costs thereto • Buyer arranges import clearance and on carriage • Neither party is required to insure • Transport mode: All Modes

28. Delivered Duty Paid (DDP)(named place) • Named place is on buyer’s side • Seller arranges export clearance, delivers export packed goods cleared for import at the named destination and pays all transportation costs thereto • Buyer possibly responsible for unloading, on carriage • Neither party is required to insure • Transport Mode: All Modes

29. For more information contact: Mary Jo Muoio Senior Vice President, Trade Services mjmuoio@ohl.com 973 402 8300 Diane Raffle Drawback and Export Compliance Manager draffle@ohl.com 267 570 2850