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This page is designed to provide a basic level of understanding of Incoterms ® 2020 Rules published by the International Chamber of Commerce (ICC)

Incoterms regulations

Incoterms regulations, first released by the International Chamber of Commerce in 1936 to coordinate the practice of cross-border cargo shipments. Moreover, some terms (such as FOB and CIF) are quite old, and were used in England in the late XVIII century. Incoterms® are adopted by States and businesses globally and are under the TM of the ICC. As such, they play an important role in international law (in particular, in the maritime law) and serve as the basis for determining the liability of commercial parties. To date Incoterms necessarily used in procurement, sales and other international trade transactions.

Each condition has a three-letter designation, that conventionally describes, who of two pays each component of the charges (shipping, customs duties, insurance). Typically, for better comprehension, the terms are arranged in ascending order of seller expenditure (first condition FCA - the seller pays nothing, the last condition DPP - the seller undertakes for all the transportation together with import customs charges, in effect, bringing the goods to the buyer's door and relieving him from all organizational actions).

incoterms2020-order
incoterms2020-plan

Also, the terms necessarily appear in the treaties to deliver clear understanding what is included in the invoice amount subject to specified conditions.

At the same time, it is worth noting that Incoterms do not take precedence over local laws of States and the latter have the advantage in the event of disputes. Also, they do not define where exactly the property rights on cargo change from supplier to buyer, do not consider the sum of the agreement, any debt, currency, credit conditions, etc. The first works with the use of Incoterms have been issued by the ICC in 1923, and the first publication entitled Incoterms was released in 1936. Subsequent changes have been made in and were shown accordingly in 1953, 1967, 1976, 1980, 1990, 2000, 2010 versions. The ninth, Incoterms 2020 were published on Sep 10, 2019, and came into force on Jan 1, 2020.

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FCA

الناقل الحرة

Supplier produced, packed and prepared the cargo to be shipped. Goods are received by the buyer’s carrier, which picks up the load from the seller’s place. You can call FCA conditions “buyer’s pick-up."

CIP

تسليم البضاعة خالصة أجرة النقل والتأمين

Same as CPT but insurance is added for seller’s account on a definite part of the route. The shipping section covered by insurance, can be any.

DTP

تسليمها في محطة مدفوعة

Supplier has organized land delivery, completed port formalities, performed loading on ship’s board, paid freight charges to the port (airport) of destination, discharging, and paid import customs duties in consideration of the cargo value, taking into account transport costs.

CFR

التكلفة والشحن

Supplier has organized land delivery, completed port formalities, performed loading on ship’s board and paid freight charges to the port (airport) of destination.

CPT

دفعت عربة إلى

The seller arranges the delivery to the indicated place and includes it in the goods price. As a rule, such a place is a terminal where ocean carrier (shipping line) can accept cargo for further transportation.

CIF

التكلفة والتأمين والشحن

The same as CFR, but insurance is added for seller’s account on a definite part of the route. The shipping section covered by insurance, can be any.

DAP

سلمت في المكان

Supplier has organized land delivery, completed port formalities, performed loading on ship’s board, paid freight charges to the port (airport) of destination, discharging, completed port formalities, and paid land transport to the address of the consignee for subsequent customs procedures.

FOB

مجانا على متن السفينة

Supplier has organized land delivery, completed port formalities and performed loading on ship’s board.

СNI

التكلفة والتأمين

Same as the FCA, but insurance is added for seller’s account on a definite part of the route. The shipping section covered by insurance, can be any.

DPU

تم تسليم المكان بدون تحميل

Supplier has organized land delivery, completed port formalities, performed loading on ship’s board, paid freight charges to the port (airport) of destination, and discharging.

DPP

تسليمها في مكان مدفوع

Supplier has organized land delivery, completed port formalities, performed loading on ship’s board, paid freight charges to the port (airport) of destination, discharging, completed port formalities, paid land transport to the address of the consignee, along with import customs duties in consideration of the cargo value, taking into account transport costs

incoterms-diagram
الشحن:
التأمين
السلطات