Incolearn – Learning more about Incoterms 2000

CARRIAGE PAID TO (CPT) PART II –
The Seller’s Obligations
The International Chamber of Commerce (ICC) defines the seventh Incoterm, Carriage Paid To (CPT), at a named place of destination, as “the seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to named destination. This means that the buyer bears all the risks and any other costs occurring after the goods have been so delivered ”. Should more than one “carrier” be used, the risk passes when the goods have been delivered to the first carrier. Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, identified ten obligations that the seller might need to fulfil in terms of Carriage Paid To: (1) the provision of goods in conformity with the contract; (2) licences, authorisations, and formalities; (3) contracts of carriage and insurance; (4) delivery; (5) transfer of risks; (6) division of costs; (7) notice to the buyer; (8) proof of delivery, transport documents or equivalent electronic message; (9) checking, packaging, marking; and (10) other obligations. The provision of goods in conformity with the contract implies that the documents stipulated in the contract of sale must be provided. With regard to the licences, authorisations and formalities, the seller must obtain any export licence or other official authorisation, and where applicable, carry out customs formalities necessary for the export of the goods. The seller must contract the carriage of the goods to the agreed point at the named place of destination. If such point is not agreed the seller may select such point. In respect of the contracts of carriage and insurance the seller has no obligation. The delivery of the goods by the seller must be to the contracted carrier. As for the transfer of risks, the seller bears all risks for the loss of or damage to the goods until such time as they have been delivered. In relation to the division of costs, the seller must pay all the costs relating to the goods up to their delivery, and if applicable also pay all costs in respect of customs formalities necessary for export. The seller must give sufficient notice to the buyer regarding the delivery of the goods. As to the proof of delivery, transport documents or equivalent electronic message, the seller must, at his expense, provide the buyer with the usual transport documents. Depending on the stipulations in the contract of sale the checking, packaging, marking costs are for the seller’s account, and this includes providing the packaging of the goods. As for other obligations, the seller must assist the buyer with information on the import of the goods and for their transit through any country, and where necessary information for procuring insurance. Next week’s issue will focus on the buyer’s obligations under Carriage Paid To (CPT).INCOLEARN is prepared by Riaan de Lange of South African Tariff & Trade Solutions CC (SATTS), a lecturer in Economics at the University of Pretoria.