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Incoterm

When the commercial contract (purchase / sale, ) is concluded, it is important to know who the buyer or seller will be responsible for transport. 
  •  Who will assume encountered risks of goods during the transport?
  •  Who will provide the transport documents?
  •  Where buyer will take delivery?
It is important that both sides know which services will be included in the "price".
The purpose of Incoterms is to establish a set of international rules for the interpretation of the terms most used in international trade.
 

 


The main documents of international trade are:

Commercial Invoice: A document required in all transactions. It accompanies the goods when crossing the border. It must include all mandatory under French law (including the No. SIREN) and all information normally required for an invoice (name and address of the contracting parties, terms and conditions of the contract, transport arrangements, payment terms, Origin and destination of the goods, description of the goods, weight, volume or number of items, unit price, amount of the transaction).

Customs documents: Customs declaration, export license (for sensitive products) and import documents if Incoterm foresees a take in charge of formalities by the exporter.

The certificate of origin: it could be required when the origin of the goods can benefit from exceptional derogations and is important for the importer. This form is then certified, usually by a chamber of commerce and returned to the respective official to be stamped and signed.
Various certificates such as health certificates or analysis is required in the case of certain products, notably food.
In the case of consolidated shipments of similar boxes, it is common to make a packing list indicating the contents of each package.
Customs Handles Certificates by freight forwarders and / or transport documents corresponding to  used transport mode CMR (road) air waybill AWB (air) or bill of lading (sea) generally also joined the documentary record.

Notions of the 11 Incoterms (Incoterms 2010)

When international traders enter into negotiations for the purchase and sale of goods, they are free to choose the specific terms of their contract. These terms include the price, quantity, and characteristics of the goods. Every international contract will also contain what is known as "Incoterms". The Incoterm selected will determine the different responsibilities of payment, loading and unloading of goods, transfer of risk at any time during an international transaction. Incoterms also influence Customs valuation basis of imported goods.

“Incoterms” are managed by the International Chamber of Commerce and are used by major trading nations of the world. From 1 January 2011, there are 11 Incoterms in use that are described below.

The 11 INCOTERMS 2010 are divided into two families

The multimodal

• Ex Works - (EXW) - Ex Works

The seller (exporter) makes the goods available to the buyer on the premises of the seller. The buyer is responsible for all shipping costs, payment of customs duties and insurance policy, and accept the responsibilities of risk of loss once the goods purchased and placed at the gates of the factory.

The price "Ex-Works" does not include the cost of loading the goods in the vehicle and no allowance is made for customs clearance. To be avoided when there is an export customs clearance. To be used primarily in intra-Community trade.

• Free Carrier - (FCA) -

The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

• Carriage Paid To - (CPT)

The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.

• Cost, Insurance and Freight (CIP)

The seller (exporter) transports the goods to the place of destination and performs the customs formalities for export. The seller is responsible for transportation and insurance costs to the place of destination. The buyer assumes all costs and risks of loss.

• Delivered At Terminal (DAT)

The seller (exporter) delivers the goods, discharge and makes it available to the buyer designated terminal at the port or other terminal of destination.

• Delivered at Place (DAP)

The seller (exporter) delivers and makes it available to the buyer on the means of transport is ready for unloading at the place of destination.

• Delivered Duty Paid (DDP)

The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or buyer's premises. The seller may opt not to insure the goods at his/her own risks.