Learning more about Incoterms 2000

PART I – Introducing Incoterms 2000
INCOTERMS IS the abbreviation for International Commercial Terms, generally known or referred to as trade terms, which are used by parties in international contracts of sale, and not in contracts of carriage. Their application and use in an international contract of sale is to define: • the roles of the contracting parties in respect of the carriage of the goods; • the responsibility for the export and import clearance • and the explanation of the division of costs and risks between the contracting parties. The ICC created Incoterms in 1936, and “this undisputed worldwide contractual standard” has been subject to regular updates over the years in order to take account of developments in international trade. The last update was introduced on January 1, 2000, resulting in the creation of what is known as Incoterms 2000. In essence Incoterms 2000 comprises 13 terms, grouped into four categories or groups also known as E-terms, F-terms, C-terms, and D-terms. The 13 terms, with which readers might be familiar, are Ex Works (EXW), Free Carrier (FCA), Free Alongside Ship (FAS), Free on Board (FOB), Cost and Freight (CFR), Cost, Insurance and Freight (CIF), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered at Frontier (DAF), Delivered Ex Ship (DES), Delivery Ex Quay (DEQ), Delivered Duty Unpaid (DDU), and Delivered Duty Paid (DDP). Over the next few weeks we will deal with each of the Incoterms individually focusing on its definition; nature and application as either a multi-modal transport term or maritime and inland waterway transport term; the seller’s obligations; the buyer’s obligations; and a summary of the Incoterm's use.
• In next week’s issue we will define the first Incoterm – Ex Works (EXW).