Incoterms 2000

HISTORY

In order to avoid problems due to a vague knowledge of the various commercial practices, the International Chamber of Commerce (ICC) published for the first time in 1936 a series of international rules for the commercial terms interpretation. These rules were known as INCOTERMS 1936. They’ve been amended and completed in the years 1953, 1967, 1976, 1980, the penultimate occurred in 1990 and the last update was done in 2000, to cope with the recent commercial international practices.

PURPOSE OF INCOTERMS (ICC)

• Establish a set of international rules for the interpretation of the terms used for international trading. This way, uncertainties derived from the different interpretations of such terms in different countries can be avoided.

• The INCOTERMS and its variety, indicate when starts and finishes the Seller’s responsibility and when the Buyer’s responsibility starts.

• The INCOTERMS determine the transfer point of the responsibility from one to another during the goods transit.

• The INCOTERMS do not determine the property of a good; this point must be specified elsewhere in the Sales contract.

• The INCOTERMS determines the exact transfer point of the risk and responsibility of the goods delivery between the Seller and the Buyer.

The INCOTERMS fell in four categories:

• E: EXW , Unique term for which the seller delivers the goods to the buyer in the seller’s premises.

• F: FCA , FAS and FOB , the seller delivers the goods to carrier chosen by the buyer.

• C: CFR , CIF , CPT and CIP , the seller contracts the carrier without assuming risks of goods loss or damages or any additional costs after the loading and shipping operations.

• D: DAF , DES , DEQ , DDU and DDP , the seller bears all expenses and necessary risks to deliver the goods in the destination country.

Splitting of Buyer/Seller Risks & Charges following the Incoterm