INCOTERMS 2010




Incoterms are a set of international rules, governed by the International Chamber of Commerce, which determine the scope of trade clauses in the international sales contract.

Incoterms is also denominated price clauses, because each term to determine the elements that compose it. The selection of the Incoterm influences on the cost of the contract.

The purpose of Incoterms is to provide a set of international rules for the interpretation of the terms used in international trade.

Incoterms determine:
  • The scope of the price.
  • In that moment and where the transfer of risk on goods from the seller to the buyer occurs.
  • The place of delivery of the goods.
  • Who hires and pays transportation
  • Who hires and pays the insurance
  • What documents are handled each part and its cost.
CFR - CIF - CIP - CPT - DAF - DDP - DDU - DEQ - DES - EXW - FAS - FCA - FOB


CFR (Cost and Freight) - Costo y Flete (puerto de destino convenido)

For the seller the scope are the same as the price FOB with the only difference that the company should be responsible for hiring the ship´s hold and pay the freight to destination.

The risk of loss or damage to the goods as well as any additional costs due to events occurring after the time of delivery, are transferred from seller to buyer

The CFR term requires the seller to clear the goods for export.

This term can be used for transport by sea or inland waterway.

Seller´s obligations:
  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight (from the place of export to the place of import)
Buyer´s obligations:
  • Payment of the Merchandise
  • Expenditure on imports (maneuvers, storage, agents)
  • Customs (documents, permits, requirements, taxes)
  • Freight and sure (import place to plant)
  • Delays

CIF (Cost, Insurance and Freight)

It means that the seller delivers the goods when it exceeds the ship´s rail at the port of shipment.

The seller must pay the costs and freight necessary to bring the goods to the port of destination.

In CIF the seller also has to take out insurance and pay the premium, to cover the risk of loss or damage that may suffer the merchandise during transport.

The buyer should note that the seller is required to obtain insurance only on minimum cover. If the buyer wants more coverage need expressly agree with the seller or to make his own extra insurance.

The CIF term requires the seller to clear the goods for export.

This term can be used for transport by sea or inland waterway.

Seller´s obligations:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight and insurance (from the place of export to the place of import)

Buyer´s obligations:

  • Payment of the merchandise
  • Expenditure on imports (maneuvers, storage, agents)
  • Customs (documents, permits, requirements, taxes)
  • Freight and sure (import place to plant)
  • Delays

CIP (Carriage and Insurance Paid to)

The seller delivers the goods to the carrier nominated by him but also must pay the costs of carriage necessary to bring the goods to the destination. The seller also has to procure insurance against the risk that the buyer supports, of loss or damage to goods during transportation.

Buyer assumes all risks and any other costs occurring after the goods have been so delivered.

The CPT requires the seller to clear the goods for export.

This term may be used irrespective of the mode of transport, including multimodal transport.

Seller´s obligations:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight and insurance (from the place of export to the place of import)
  • Expenditure on imports (maneuvers, storage, agents) "Partial"

Obligations of the Buyer:

  • Payment of the merchandise
  • Customs (documents, permits, requirements, taxes)
  • Freight and sure (import place to plant)
  • Expenditure on imports (maneuvers, storage, agents) "Partial"
  • Delays

CPT (Carriage Paid To)

The seller delivers the goods to the carrier nominated by him but also must pay the costs of carriage necessary to bring the goods to the destination.

Buyer assumes all risks and any other costs occurring after the goods have been so delivered.

The CPT requires the seller to clear the goods for export.

This term may be used irrespective of the mode of transport, including multimodal transport.

Seller´s obligations:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight (from the place of export to the place of import)
  • Expenditure on imports (maneuvers, storage, agents) "Partial"

Obligations of the Buyer:

  • Payment of the merchandise
  • Customs (documents, permits, requirements, taxes)
  • Freight and sure (import place to plant)
  • Expenditure on imports (maneuvers, storage, agents) "Partial" Delays
  • Demoras

DAF (Delivered At Frontier)

t means that the seller has fulfilled his obligation to deliver when he has made the goods dispatched in the Customs for export at the point and place agreed the border but before the customs border of the buyer country.

This term may be used irrespective of the mode of transport when goods are to be delivered at a land border.

Seller´s obligations:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight (from the place of export to the place of import) (partial)
  • Insurance (partial)

Obligations of the Buyer:

  • Payments of the Merchandise
  • Freight (of export place to the import place) (partial)
  • Insurance (partial)
  • Expenditure on imports (maneuvers, storage, agents)
  • Customs (documents, permits, requirements, taxes)
  • Freight and sure (import place to plant)
  • Delays

DDP (Delivered Duty Paid)

It means that the seller delivers the goods to the buyer, cleared for import, and not unloaded from the means of transport used in the place of destination.

The seller has to bear all costs and risks involved in bringing the goods to the place, including customs formalities, and the payment of formalities, customs duties, taxes and other charges for the import to the destination country.

Obligations of the seller:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Carry (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight (from the place of export to the place of import)
  • Insurance
  • Expenditure on imports (maneuvers, storage, agents)
  • Customs (documents, permits, requirements, taxes)
  • Hauling and insurance (place of import to plant)
  • Delays

Obligation of the purchaser:

  • Pay goods

DDU (Delivered Duty Unpaid)

Means that the seller has fulfilled his obligation to deliver when he has made the goods available to the buyer at the named place in the importing country and the seller has to bear all costs and risks involved in bringing the goods to that place (excluded rights taxes and other official charges payable on imports). And the costs and risks of carrying out customs formalities.

Seller´s obligations:

  • To give the merchandise and necessary documents
  • Packing and crating
  • Freight (of factory to the export place)
  • Customs (documents, permits, requirements, taxes)
  • Export expenses (maneuver, storage, agents)
  • Freight and insurance (from the place of export to the place of import)
  • Obligations of the Buyer:

    • Payment of the merchandise
    • Expenditure on imports (maneuvers, storage, agents)
    • Customs (documents, permits, requirements, taxes)
    • Freight and sure (import place to plant)
    • Delays

    DEQ (delivered Ex-Quay)

    It means that the seller delivers when the goods available to the buyer are made, not cleared for import on the quay (wharf) in the port of destination. The seller has to bear costs and risks involved in bringing the goods to the port of destination and discharging the goods on the quay (wharf). The DEQ term requires the buyer to clear the goods for import and to pay all formalities, duties, taxes and other charges upon import.

    Seller´s obligations:

    • To give the merchandise and necessary documents
    • Packing and crating
    • Freight (of factory to the export place)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)
    • Freight and insurance (from the place of export to the place of import)
    • Customs (documents, permits, requirements, taxes)

    Obligations of the Buyer:

    • Payment of the merchandise
    • Freight and sure (import place to plant)
    • Expenditure on imports (maneuvers, storage, agents)
    • Delays

    This term can be used only for transport by sea or inland waterway or multimodal transport.

    DES (Delivered Ex Ship)

    It means that the seller delivers when the goods available to the buyer on board the ship not cleared for import at the named port of destination are set.

    Seller´s obligations:

    • To give the merchandise and necessary documents
    • Packing and crating
    • Freight (of factory to the export place)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)
    • Freight and insurance (from the place of export to the place of import)

    Obligations of the Buyer:

    • Payment of the merchandise
    • Expenditure on imports (maneuvers, storage, agents)
    • Customs (documents, permits, requirements, taxes)
    • Hauling and insurance (place of import to plant)
    • Delays

    EXW (Ex-Works)

    It means that the seller delivers when the goods available to the buyer at the seller´s premises or another agreed place (ie factory, warehouse, etc.).

    This term thus represents the minimum obligation of the seller, and the buyer has to bear all costs and risks.

    Seller´s obligations:

    • Delivery of the merchandise and necessary documents
    • Packing and crating

    Buyer´s obligations:

    • Payment of the merchandise
    • Internal Freight (factory rather than to export)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)
    • International freight (from the place of export to the place of import)
    • Insurance
    • Expenditure on imports (maneuvers, storage, agents)
    • Transport and insurance (place of import to plant)

    FAS (Free Along Ship)

    It means that the seller´s responsibility ends when the goods are placed alongside the vessel at the port of shipment. This means that the buyer has to bear all costs and risks of loss or damage to the goods from that moment.

    The FAS term requires the seller to clear the goods for export.

    Seller´s obligations:

    • Merchandise and Necessary Documents
    • Packing and crating
    • Freight (of factory to the export place)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)

    Obligations of the Buyer:

    • Payments of the merchandise
    • Freight and insurance (from the place of export to the place of import)
    • Expenditure on imports (maneuvers, storage, agents)
    • Customs (documents, permits, requirements, taxes)
    • Insurance and Freight (import place to plant)
    • Delays

    FCA (Free Carrier)

    It means that the seller delivers the goods for export to that proposed by the buyer, at the agreed place carrier.

    The chosen place of delivery has an impact on the obligations of loading and unloading of parts. If delivery takes place on the premises of the seller is responsible for loading. If delivery occurs elsewhere, the seller is not responsible for unloading.

    This term may be used in any mode of transport including multimodal transport.

    Obligations of the seller:

    • Delivery of the Merchandise and necessary documents
    • Packing and crating
    • Freight (of factory to the export place)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)

    Obligations of the buyer:

    • Payments of the merchandise
    • Freight (from the place of export to the place of import)
    • Insurance
    • Expenditure on imports (maneuvers, storage, agents)
    • Customs (documents, permits, requirements, taxes)
    • Freight and sure (import place to plant)
    • Delays

    FOB (Free On Board)

    The seller´s responsibility ends when the goods exceeds the ship´s rail at the port of shipment.

    The buyer must bear all costs and risks of loss and damage to the goods from that point.

    The term FOB requires the seller to clear the goods for export.

    This term can be used for transport by sea or inland waterway.

    Obligations of the seller:

    • To give the merchandise and necessary documents
    • Packing and crating
    • Freight (of factory to the export place)
    • Customs (documents, permits, requirements, taxes)
    • Export expenses (maneuver, storage, agents)

    Obligations of the Buyer:

    • Payment of the merchandise
    • Freight and insurance (from the place of export to the place of import)
    • Expenditure on imports (maneuvers, storage, agents)
    • Customs (documents, permits, requirements, taxes)
    • Freight (import place to plant)
    • Delays