| ign="center"> | | | | where responsibility changes hands geographically, |
| Can't understand Chinese and you can't remember | | | | please note that they do not deal with ownership of |
| your basic school French? No problem, you'll have no | | | | the goods being sold. |
| trouble understanding traders around the world once | | | | The terms range from EXW (Ex Works) which is the |
| you've got your head around Incoterms. | | | | case where the buyer pays for insurance, shipment |
| If you've ever wondered about those 3 letter | | | | and all fees to the other extreme - DDP (Delivery Duty |
| abbreviations - FPB, CIF Manchester,FAS Mumbai - | | | | Paid) where the seller takes on all the costs of |
| then continue reading. | | | | delivery. |
| Incoterms are used by import-export traders globally | | | | Copyright of the 13 abbreviated terms belongs to the |
| to specify the terms of their sales contracts, so it | | | | ICC. |
| would be worth your while understanding what they | | | | Strict rules exist to govern how they are used and |
| mean. | | | | what they mean. The International Chamber of |
| Traders the world over find that communicating with | | | | Commerce, ICC, recommends that ' Incoterms 2000' |
| each other is made much easier once Incoterms | | | | be referred to whenever the terms are used and it is |
| (International Commercial Terms) are used. | | | | generally recommended that the actual place where |
| So that buyers and sellers can work out exactly what | | | | the handover of responsibilities takes place is included |
| their costs and responsibilities are during any trade | | | | with the Incoterms. |
| deal, both parties need to be clear about what the | | | | So a correct use would be: CPT Tokyo Incoterms |
| terms of the deal are. Points of great interest in any | | | | 2000. |
| transaction occur when ownership and payment | | | | Although they are not legally binding, their universal |
| responsiblities transfer from one party to the other. | | | | acceptance means they should be mentioned as early |
| Incoterms make it clear when these points are | | | | as possible in any negotiation and should definitely be |
| reached. So the system allows all parties to easily | | | | written into the contracts to avoid misunderstandings |
| determine which of them is charged for what aspect | | | | later on. |
| of the trade and who takes on certain risks at | | | | A thorough understanding of how to use Incoterms |
| particular points during the trade. | | | | should ensure you avoid most of the major problems |
| A standardised set of abbreviations was compiled by | | | | connected with international trade. |
| the Paris based International Chamber of Commerce | | | | And here they all are: |
| (ICC) in 1936. | | | | EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, |
| The definitions were established from the point of | | | | DEQ, DDU, DDP. |
| view of the seller. Whilst they are used to agree | | | | |