The Incoterms (International Commercial Terms) were created in 1963, when the International Chamber of Commerce (ICC), based in Paris, interpreted consolidated the different contractual forms that were being used in the international trade.
The Incoterms are used to define, within the structure of an international procurement sales contract, the rights obligations from the exporter importer, stablishing a standard of definitions, determining neutral rules practices, : the exporter is supposed to deliver the commodity, who pays the shipping who is responsible for hiring the insurance.
There are 11 Incoterms, represented by acronyms standardized by the ICC (International Chamber of Commerce) used in the trades (grouped in four categories by ascendant order of vendor obligation):
Any Transport Mode | Sea / Inland Waterway Transport |
Any Transport Mode |
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EXW | FCA | FAS | FOB | CFR | CIF | CPT | CIP | DPU | DAP | DDP | |
Charges / Fees | Ex Works | Free Carrier | Free Alongside Ship | Free On Board | Cost & Freight | Cost Insurance & Freight | Carriage Paid To | Carriage Insurance Paid To | Delivered at Terminal | Delivered at Place | Delivered Duty Paid |
Packaging | Buyer or Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Loading Charges | Buyer | Seller* | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Delivery to Port / Place | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Export Duty & Taxes | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Origin Terminal Charges | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Loading on Carriage | Buyer | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Carriage Charges | Buyer | Buyer | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
Insurance | Seller | Seller | |||||||||
Destination Terminal Charges | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller | Seller | Seller | Seller | Seller |
Delivery to Destination | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller | Seller |
Import Duty & Taxes | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Seller |