Incoterms

Incoterms are a set of international rules, prescribed and reviewed by the International Chamber of Commerce, which serve for the interpretation of trade terms in a contract of international sale of goods.

Is to establish a criteria defined on the distribution of costs and transmission risks.

Incoterms are accepted voluntarily by the parties when stipulating the conditions of sales, Incoterms define the obligations of delivery and distribution of risk between the buyer (importer) and seller (exporter).
Incoterms are terms of price, directly influencing the total cost of the operation.

INCOTERMS DETERMINE

The scope of the price.

In that moment and where there is transfer of risks of the goods from the seller to the buyer.

The place of delivery of the goods.

Who hires and pays transport.

Who hires and pays the insurance

What documents handled each part and its cost.

The latest update of Incoterms is produced in 2010 and came into force on 1st January 2011.

Before there were 13 incoterms last modified:

EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP.

A major change in the last update of 2010 is the elimination of 4 of them:

DAF, DES, DEQ and DDU.

And the creation of 2 new:

DAT and DAP being only 11 INCOTERMS.

Below is a table for easy management of INCOTERMS and ensure efficient implementation in their foreign trade operations.