Terms of delivery (Incoterms).
Vocabulary:
Passing risk – переход риска
To send the goods – отправлять груз
To bear the costs – нести расходы
To avoid disagreements – избегать разногласий
Obligation - обязательство
To cover all costs– покрыть все расходы
Title – право собственности
Ship’s rail – леер судна
EXW – франко-завод
FAS – франко вдоль борта
FOB – франко борт
CFR – стоимость и фрахт
CIF – стоимость, страховка и фрахт
DES – доставлено на борт
DEQ – доставлено к причалу
When the goods are sent from a Seller to a Buyer each party has to know exactly which of the costs and risks of transportation he has to bear. In order to avoid disagreements, the Sales Contract usually stipulates one of the thirteen terms of delivery drawn up by the Chamber of Commerce. These are known as Incoterms (International Commercial Terms). They determine which party is to bear the various costs involved in transportation and the point at which the risks are to pass from the Seller to the Buyer. It is known as the passing risk.
All Incorterms are divided into 4 groups:
EXW.
F (FCA, FAS, FOB)
C (CFR, CIF, CPT, CIP)
D (DAF, DES, DEQ, DDU, DDP)
EXW (Ex works) represents the maximum obligation for the Buyer. The Seller takes the least responsibilities. The Buyer has to cover all costs and bear all risks until the goods reach his warehouse, i.e. title and risk pass to the Buyer including payment of all transportation and insurance cost from the Seller’s door. It can be used for all forms of transport.
FAS, FOB, CFR, CIF, DES and DEQ are used for sea and inland waterways.
FAS (Free Alongside Ship). The Seller pays for transportation of the goods to the port of shipment. The Buyer pays for everything else (loading, freight, insurance, unloading and transportation from the port of destination to his warehouse). The passing of risk occurs when the goods have been delivered to the quay at the port of shipment.
FOB (Free on Board). The Seller pays for the transportation of the goods to the port of shipment and the loading costs. The Buyer pays for everything else (freight, insurance, unloading and transportation from the port of destination to his warehouse). The passing risk occurs when the goods have passed the ship’s rail at the port of shipment.
CFR (Cost and Freight). The Seller pays for the transportation of the goods to the port of shipment, loading costs and freight. The Buyer pays for insurance, unloading and for the goods to be transported from the port of destination to his warehouse. The passing risk is the same as for FOB (when the goods pass the ship’s rail at the port of shipment).
CIF (Cost, Insurance and Freight). The Seller pays for the transportation to the port of shipment, loading costs, freight and insurance. The Buyer pays the unloading costs and for the goods to be transported from the port of destination to his warehouses. The passing risk is the same as for FOB and CFR (when the goods pass the ship’s rail at the port of shipment).
DES (Delivered ex Ship). The Seller and the Buyer share the costs exactly as described under CIF.
The difference is in the passing of risk; this occurs after the ship has arrived at the port of destination but before the goods are unloaded.
DEQ (Delivered ex Quay). The Seller pays for the goods to be transported to the port f shipment, loading, freight, insurance and unloading. The Buyer only has to pay for the goods to be transported from the port of destination to his warehouse. The passing risk occurs after the goods have been unloaded at the port of destination.
Do this test, check your knowledge!
In order to avoid disagreements, the Sales Contract usually …
a) stipulates one of the 13 Incoterms; b) changes terms of payment; c) cancels all formalities.
The point at which the costs and risks are to pass from the Seller to the Buyer is known as …
a) passing costs; b) passing risks; c) delivering risks.
Ex works represents maximum obligation for the …
a) Buyer; b) Seller; c) Carrier
The Seller pays for transportation of the goods to the port of shipment under ….
a) FOB; b)CIF; c) FAS
The Buyer pays for insurance, unloading, and for transportation of the goods from the port of …. to his warehouse under CFR.
a) shipment; b)destination; c)call
The Buyer only has to pay for transportation of the goods from the port of destination to his warehouse under ….
a) DEQ; b) DES; c) CIF
The passing risk is the same under FOB, CFR and….
a) FAS; b) DES; c)CIF
The passing risk occurs when the goods have passed the ship’s rail at the port of shipment under….
EXW; b) FOB; c) DEQ
Incoterms are terms of….
payment; b) transportation; c) delivery
… can be used for all forms of transport.
EXW; b)FAS; c)FOB
Goods are sent from the…..
port of shipment; b) port of destination; c) port of call
The idea of insurance is to obtain … in case of damage or loss.
information; b) official document; c) indemnity
Goods are delivered to the….
port of shipment; b) port of destination; c) port of call
The charge made for carrying the goods on the ship is ….
transportation costs; b) freight costs; c) carrying costs.
Incoterms are adopted by the….
Maritime Arbitration; b) IMO; c) Chamber of Commerce
|
|