The seller delivers when the goods are placed next to the buyer`s vessel in the designated port of shipment. This means that from that moment on, the buyer must bear all costs and risks of loss or damage to the goods. The FAS clause requires the seller to hold the goods for export, which is a reversal from previous versions of Incoterms where the buyer had to arrange export customs clearance. However, if the parties wish the buyer to maintain the goods for export, this should be clarified by explicit language in the sales contract. This term should only be used for non-containerized sea freight and inland waterway transport. The seller takes care of the transport of the goods to the indicated destination. However, the goods are deemed to be delivered when they have been handed over to the first carrier or the principal carrier, so that the risk passes to the buyer upon delivery of the goods to that carrier at the place of dispatch in the country of export. 10. CFR Incoterms – Cost and Freight (called Port of Destination) Under this agreement (formerly known as C&F), the seller must pay the cost and freight to bring the goods to its port of destination, at which point delivery is reached (but it is not the seller`s job to settle them through customs). The four rules set out in Incoterms 2010 for international trade, where transport is entirely by water, are as follows. It is important to note that these terms are generally not suitable for shipping in shipping containers; The time when the risk and liability of the goods are transferred is when the goods are loaded onto the ship, and if the goods are sealed in a shipping container, it is impossible to check the condition of the goods at that time. The seller has fulfilled its delivery obligations as soon as the goods have been brought on board the vessel to the designated port of dispatch and cleared for export. The transfer of risk takes place as soon as the goods are on board the ship (port transit).
The buyer then bears all risks and costs of the maritime transport of goods. The most important consideration for DDP conditions is that the seller is responsible for clearing the goods in the buyer`s country, including paying duties and taxes and obtaining the necessary permits and registrations from the authorities of that country. If the rules and regulations of the buyer`s country are not well understood, DDP conditions can present a very high risk in terms of delays and unexpected additional costs and should be used with caution. International legal harmonization in trade law was work on which UNCITRAL had been working for many years, with some success, but much remained to be done. The standards to be met by packaging and packaging correspond to normal packing practices for goods of the same type. In the absence of such practices, the ICC refers to customary practice in international trade or, if that is not possible, to that of the place where the seller is established. If there are no standard practices, the packaging must ensure the preservation and protection of the goods until delivery to the buyer; In FOB, the seller clears the goods for export and loads the goods onto the ship and port designated by the buyer. The latest version of the Incoterms, „Incoterms 2020”, entered into force on 1 January 2020. This new version is similar to the previous one („Incoterms 2010”), but updates the rules to make them easier to use. There are 11 Incoterms in Incoterms 2020, several of which can be used for each mode of transport and specific to maritime and inland waterway transport. List of costs.
For quick reference, Incoterms 2020 groups all costs associated with each shipping term under A9/B9 of that term, so sellers and buyers „can now find all the costs they would be responsible for under this particular Incoterms rule®® in one place.” Incoterms® 2020, 14. You can also find the costs under the respective items of the respective shipping method. „Multimodal” Incoterms refer to deliveries that can be made by several different means of transport (road, rail or air). „Incoterms” have become a standard term in the world of international freight. In fact, it is a copyrighted word of the International Chamber of Commerce (ICC). After several years of discussion and elaboration within the ICC, they published the first international trade terms (Inco Terms) in 1936. Since then, there have been 5 revisions, until recently – Incoterms 2010. „Sale on arrival” means sales for which the Seller undertakes to bear the costs and risks associated with international transport to the agreed destination. This type of sale is advantageous for the buyer because he does not have to take care of the transport. In this way, he receives the goods as if he had bought them locally. As soon as the goods are ready to be shipped, the necessary packaging is carried out by the seller at his own expense so that the goods safely reach their final destination. All necessary legal formalities in the exporting country are carried out by the seller at his own expense and risk in order to release the goods for export.
The insurance to be provided under CIF and CIP conditions has also changed from Institute freight clauses (C) to Institute freight clauses (A). Under the CIF Incoterms rule®, which is reserved for maritime trade and is often used in commodity trading, the Institute`s cargo clauses (C) remain the standard level of coverage, giving parties the opportunity to agree on higher insurance coverage. Based on feedback from global users, the CIP Incoterms rule® now requires a higher level of coverage equivalent to the Institute`s freight clauses (A) or similar clauses. [8] Only these rules have the force of law vis-à-vis the ICC in the event of a dispute. In many ways, this Incoterm has replaced FOB in modern usage, although the critical point at which the risk passes shifts from loading on board the ship to the designated location. The chosen place of delivery affects the obligations to load and unload the goods at that place. It is important to respect the limits of Incoterms. They do not replace the various legal systems that apply in the countries and trading blocs of the world: and it is these often boring legal minefields that freight forwarders encounter on a daily basis and thus fully justify their fees. There are 3 Incoterms that are multimodal and apply to „Sale on Arrival”: All companies that buy or sell goods internationally must agree on their respective obligations with their business partners during the transaction. Category E (Start), which contains only one trade term, namely EXW (Ex Works). After the goods arrive in the country of destination, customs clearance in the importing country must be carried out by the buyer, e.g. import permit, documents required by customs, etc., including all duties and taxes.