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INCOTERMS 2000 - A REFERENCE GUIDE

With the advent of the millennium, there is a newly issued set of Incoterms now known as Incoterms 2000. INCOTERMS 2000 is an acronym for "International Commercial Terms." Incoterms are the universally accepted trade terms in regards to:

The carriage of goods from the seller to the buyer and
Export and import clearance.

It is recommended to always add Incoterms 2000 in union with the trade term.

There are thirteen Incoterms segmented under four classifications (SEE DEFINITIONS BELOW). The first classification only consists of one Incoterm. The other three have multiple Incoterms and can generally be described as follows:

Group F Incoterms signify that the seller must hand over the goods to a nominated carrier free of risk and expense to the buyer.
Group C Incoterms signify that the seller must bear certain costs even after the critical point for the division of the risk of loss of or damage of the goods has been reached.
Group D Incoterms signify that the goods must arrive at a stated destination.

While there are favorites among the list, such as EXW and FOB, each Incoterm has value depending upon the unique nature of the shipment.

There are three significant differences between Incoterms 1990 and Incoterms 2000.

Under FAS (Free Alongside Ship) the export obligation is now on the seller as opposed to the buyer.
Under FCA (Free Carrier) it is now specified that the seller is obligated to load the goods on the buyer’s collecting vehicle and the buyer is specifically obligated to receive the seller’s arriving vehicle unloaded.
Under DEQ (Delivered Ex Quay) the import clearance obligation is now on the buyer as opposed to the seller.

INCOTERMS 2000 DEFINITIONS:

GROUP E: DEPARTURE

EXW Ex Works (All Modes of Transport)
Seller’s Responsibility Place all the goods at the disposal of the buyer at the named place.	Buyer’s Responsibility Take delivery of the goods when they have been placed at his/her disposal.	Required Documents Commercial invoice Buyer’s receipt

GROUP F: MAIN CARRIAGE UNPAID

FCA Free Carrier (All Modes of Transport)
Seller’s Responsibility Deliver the goods at the named point. Provide evidence of delivery of the goods to the carrier. Arrange export clearance.	Buyer’s Responsibility Nominate carrier. Contract for carriage.	Required Documents Commercial invoice. Usual document evidencing delivery of the good to the carrier. Export license, if necessary.
FAS Free Alongside Ship (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Deliver the goods alongside the ship. Provide an "alongside receipt." Provide export clearance.	Buyer’s Responsibility Nominate carrier. Contract for carriage.	Required Documents Commercial invoice. Customary clean receipt. Export license, if necessary.
FOB Free On Board (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Deliver the goods on board. Provide a clean on board receipt. Pay loading costs not included in the freight. Arrange export clearance.	Buyer’s Responsibility Nominate carrier. Contract for carriage. Pay unloading costs.	Required Documents Commercial invoice. Customary clean receipt. Export license, if necessary.

GROUP C: MAIN CARRIAGE PAID

CFR Cost and Freight (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Contract for carriage. Deliver the goods on board. Provide a clean transport document (bill of lading or sea waybill). Arrange export clearance. Pay unloading costs if for his/her account under the contract of carriage.	Buyer’s Responsibility Accept delivery of the goods upon shipment. Receive the goods from the carrier. Pay such costs as are not for the seller’s account under the contract of carriage.	Required Documents Commercial invoice. Transport document. Export license, if necessary.

CFR Cost and Freight (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Contract for carriage. Deliver the goods on board. Provide a clean transport document (bill of lading or sea waybill). Arrange export clearance. Pay unloading costs if for his/her account under the contract of carriage.	Buyer’s Responsibility Accept delivery of the goods upon shipment. Receive the goods from the carrier. Pay such costs as are not for the seller’s account under the contract of carriage.	Required Documents Commercial invoice. Transport document. Export license, if necessary.
CIF Cost, Insurance and Freight (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Contract for carriage and insurance. Deliver the goods on board. Provide a clean transport document and a cargo insurance policy or certificate. Arrange export clearance. Pay unloading costs if for his/her account under the contract of carriage.	Buyer’s Responsibility Accept delivery of the goods upon shipment. Receive the goods from the carrier. Pay such costs as are not for the seller’s account under the contract of carriage.	Required Documents Commercial invoice. Transport document. Export license, if necessary. Insurance policy (certificate).
CPT Carriage Paid To (All Modes of Transport)
Seller’s Responsibility Contract for carriage. Deliver the goods to the first carrier. Provide a usual and clean transport document. Arrange export clearance. Pay loading costs Pay unloading costs if for his/her account under the contract of carriage.	Buyer’s Responsibility Accept delivery of the goods when they have been delivered to the carrier. Receive the goods from the carrier. Pay such costs as are not for the seller’s account under the contract of carriage.	Required Documents Commercial invoice. Transport document. Export license, if necessary.

CIP Carriage and Insurance Paid To (All Modes of Transport)
Seller’s Responsibility Contract for carriage and insurance. Deliver the goods to the first carrier. Provide a usual and clean transport document (bill of lading or sea waybill) and a cargo insurance policy or certificate. Arrange export clearance. Pay loading costs Pay unloading costs if for his/her account under the contract of carriage.	Buyer’s Responsibility Accept delivery of the goods when they have been delivered to the carrier. Receive the goods from the carrier. Pay such costs as are not for the seller’s account under the contract of carriage.	Required Documents Commercial invoice. Transport document. Export license, if necessary. Insurance policy (certificate).

GROUP C: ARRIVAL

DAF Delivered At Frontier (Mode is Irrespective When Delivered to a Land Frontier)
Seller’s Responsibility Deliver the goods at the named frontier. Provide a document to enable the buyer to take delivery at the frontier or assist him/her to obtain a through transport document. Arrange export clearance.	Buyer’s Responsibility Take delivery of the goods at the named frontier or assume responsibility for on-carriage. Arrange import clearance.	Required Documents Commercial invoice. Transport document or warehouse warrant.
DES Delivered Ex Ship (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Deliver the goods on board the ship at the port of destination. Provide a document to enable the buyer to take delivery from the ship (bill of lading or delivery order). Arrange export clearance.	Buyer’s Responsibility Take delivery of the goods from the ship at the port of destination. Arrange import clearance.	Required Documents Commercial invoice. Bill of lading or delivery order.

DEQ Delivered Ex Quay (Sea and Inland Waterway Transport Only)
Seller’s Responsibility Deliver the goods on the quay at the port of destination. Provide a document to enable the buyer to take delivery from the quay (bill of lading or delivery order). Arrange export clearance.	Buyer’s Responsibility Take delivery of the goods from the quay at the port of destination. Arrange import clearance.	Required Documents Commercial invoice. Bill of lading or delivery order.
DDU Delivered Duty Unpaid (All Modes of Transport)
Seller’s Responsibility Deliver the goods at the named place of destination. Provide a document to enable the buyer to take delivery. Arrange export clearance.	Buyer’s Responsibility Take delivery of the goods from the named place of destination. Arrange import clearance.	Required Documents Commercial invoice. Document needed for taking delivery.
DDP Delivered Duty Paid (All Modes o Transport)
Seller’s Responsibility Deliver the goods at the named place of destination. Provide a document to enable the buyer to take delivery. Arrange export and import clearance.	Buyer’s Responsibility Take delivery of the goods from the named place of destination.	Required Documents Commercial invoice. Document needed for taking delivery. Import license, if necessary.