Incoterms are the terms used in international trade to establish the obligations and risks they assume the seller and buyer and comprise a series of strict rules that define, for each option, the obligations of the parties.

This word from the name in English, International Commercial Terms, were first established in 1936 by the International Chamber of Commerce and aim to limit the diversity of interpretations that can be in different countries to the terms used in contracts purchase. The international sales terms have been modified and the latest version is Incoterms 2000. This new release introduces significant changes to the 1990 version in two areas:

The obligations to clear the customs and pay duty under FAS and DEQ

The loading and unloading obligations under FAC

This publication is part of the various activities carried out by the Secretariat of Commerce and Integration and the Export Foundation in order to assist the business community in their efforts to effectively market their products in the international market.

It is therefore very important to handle correctly the Incoterms as a simple misunderstanding concerning the conditions or terms of the sale may cause the exporter an obligation to bear costs (transport, insurance, etc.) That he did not want to take the time to recruitment.

For the purpose of presenting an overview of the Incoterms these can be grouped into four different categories, depending on the seller's obligations:

EXW ("Ex Works")

The seller fulfills his obligation to deliver when he places the goods at the disposal of the buyer at the seller's premises or another named place (works, factory, warehouse, etc.) without mailing for export and not loaded onto the means of transport. The buyer bears all costs and risks from the delivery of the goods.

The Group "F" requires the seller to deliver the goods for transport according to the customer's specifications

FCA ("Free Carrier")

The seller fulfills his obligation when he delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place.

If delivery occurs at the seller's premises, it is responsible for loading, however if delivery is made elsewhere, the seller is not responsible for unloading.

FAS ("Free Alongside Ship")

The seller fulfills his obligation to deliver when the goods are placed alongside the vessel at the named port. After delivery, the buyer bears the costs and risks of the goods.

The FAS term requires the seller to clear the goods for export.

FOB ("Free on Board")

The seller fulfills his obligation to deliver when the goods, cleared for export, has passed the ship's rail at the port of shipment. From this point the buyer bears all costs and risks of the goods.

The "Group C", requires the seller to hire and pay main transport, while the risk of loss or damage to the goods and the additional costs occurring after delivery are the buyer.

CFR ("Cost and Freight")

The seller fulfills his obligation to deliver when the goods pass the ship's rail at the port of shipment, assuming the same pay the costs and freight to bring the goods to the port of destination. The cost of insurance is the buyer. The CFR term requires the seller to clear the goods for export.

CIF ("Cost, Insurance and Freight")

Corresponds to the seller the same obligations as the CFR term, including in this case the insurance and pay the premium. The CIF term requires the seller to clear the goods for export.

CPT ("Carriage paid to")

The seller delivers the goods to the carrier nominated by paying the freight for the transportation of the same to the destination. Delivered the goods to the carrier, the buyer assumes all risk of loss or damage to the goods.

The CPT requires the seller to clear the goods for export.

CIP ("Carriage and insurrance paid to")

Corresponds to the seller the same obligations as in CPT term, including in this case the insurance and the payment of the premium, during transport of the goods.

The Group "D" means that the seller bears all risks and costs until delivery of the goods at the place or point of destination at the border or within the country.

DAF ("Delivered at Frontier", in Spanish "Delivered at Frontier")

The seller has fulfilled his obligation to deliver when he places the goods, cleared for export, at the named point and place of frontier, not cleared for import. The seller has to bear the risks of damage and loss of goods until delivery.

DES ("Delivered Ex Ship")

The seller delivers the goods when they are made available to the buyer on board the vessel at the port of destination, not cleared for import. The seller has to bear the costs and risks until the time of delivery. Buyer assumes the cost of unloading.

DEQ ("Delivered Ex Quay")

The seller fulfills his obligation to deliver when he makes the goods available to the buyer, not cleared for import on the quay at the port of destination. The seller has to bear the risks and costs to delivery, including discharge.

The DEQ term requires the buyer to clear the goods for import and to pay for all formalities, duties, taxes and other import charges. The parties may, if they wish, include in the seller's obligations all or part of the costs payable upon import of the goods.

DDU ("Delivered Duty Unpaid")

The seller fulfills his obligation to deliver when the goods placed at the disposal of the buyer at the point of destination of the importing country, without mailing to import. The seller has to bear all risks and costs until delivery is made.

DDP ("Delivery Duty Paid")

Corresponds to the seller the same obligations as in CPT term, including import clearance of the goods. The seller has to bear all costs and risks until the time of delivery.