By Maria Livanos Cattaui, Secretary General of ICC

    The global economy has given businesses broader access than ever before

to markets all over the world. Goods are sold in more countries, in larger

quantities, and in greater variety. But as the volume and complexity of

international sales increase, so do possibilities for misunderstandings and

costly disputes when sales contracts are not adequately drafted.

    Incoterms, the official ICC rules for the interpretation of trade terms,

facilitate the conduct of international trade. Reference to Incoterms 2000in

a sales contract defines clearly the parties' respective obligations and

reduces the risk of legal complications.

    Since the creation of Incoterms by ICC in 1936, this undisputed

worldwide contractual standard has been regularly updated to keep pace with

the development of international trade. Incoterms 2000 take account of the

recent spread of customs - free zones, the increased use of electronic

communications in business transactions, and changes in transport practices.

Incoterms 2000 offer a simpler and clearer presentation of the

13definitions, all of which have been revised.

    The broad expertise of ICC's Commission on International Commercial

Practice, whose membership is drawn from all parts of the world and all

trade sectors, ensures that Incoterms 2000 respond to business needs

everywhere.

    ICC would like to express its gratitude to the members of the

commission, chaired by Prof. Fabio Bortolotti (Italy), its Working Party on

Trade Terms, chaired by Prof. Jan Ramberg (Sweden), and to the drafting

group, which comprised Prof. Charles Debattista (Chairman - UK), Robert De

Roy (Belgium), Philippe Rapatout (France), Jens Bredow (Germany) and Frank

Reynolds (US).

     INTRODUCTION

1. PURPOSE AND SCOPE OF INCOTERMS

    The purpose of Incoterms is to provide a set of international rules for

the interpretation of the most commonly used trade terms in foreign trade.

Thus, the uncertainties of different interpretations of such terms in

different countries can be avoided or at least reduced to a considerable

degree. Frequently, parties to a contract are unaware of the different

trading practices in their respective countries. This can give rise to

misunderstandings, disputes and litigation, with all the waste of time and

money that this entails. In order to remedy these problems, the

International Chamber of Commerce first published in 1936 a set of

international rules for the interpretation of trade terms. These rules were

known as "Incoterms 1936". Amendments and additions were later made in 1953,

1967, 1976, 1980, 1990 and presently in 2000 in order to bring the rules in

line with current international trade practices. It should be stressed that

the scope of Incoterms is limited to matters relating to the rights and

obligations of the parties to the contract of sale with respect to the

delivery of goods sold (in the sense of "tangibles", not including

"intangibles" such as computer software).

    It appears that two particular misconceptions about Incoterms are very

common. First, Incoterms are frequently misunderstood as applying to the

contract of carriage rather than to the contract of sale. Second, they are

sometimes wrongly assumed to provide for all the duties which parties may

wish to include in a contract of sale.

    As has always been underlined by ICC, Incoterms deal only with the

relation between sellers and buyers under the contract of sale, and,

moreover, only do so in some very distinct respects.

    While it is essential for exporters and importers to consider the very

practical relationship between the various contracts needed to perform an

international sales transaction - where not only the contract of sale is

required, but also contracts of carriage, insurance and financing -Incoterms

relate to only one of these contracts, namely the contract of sale.

Nevertheless, the parties' agreement to use a particular Incoterms would

necessarily have implications for the other contracts. To mention a few

examples, a seller having agreed to a CFR - or CIF - contract cannot perform

such a contract by any other mode of transport than carriage by sea, since

under these terms he must present a bill of lading or other maritime

document to the buyer which is simply not possible if other modes of

transport are used. Furthermore, the document required under a documentary

credit would necessarily depend upon the means of transport intended to be

used.

    Second, Incoterms deal with a number of identified obligations imposed

on the parties - such as the seller's obligation to place the goods at the

disposal of the buyer or hand them over for carriage or deliver them at

destination - and with the distribution of risk between the parties in these

cases.

    Further, they deal with the obligations to clear the goods for export

and import, the packing of the goods, the buyer's obligation to take

delivery as well as the obligation to provide proof that the respective

obligations have been duly fulfilled. Although Incoterms are extremely

important for the implementation of the contract of sale, a great number of

problems which may occur in such a contract are not dealt with at all, like

transfer of ownership and other property rights, breaches of contract and

the consequences following from such breaches as well as exemptions from

liability in certain situations. It should be stressed that Incoterms are

not intended to replace such contract terms that are needed for a complete

contract of sale either by the incorporation of standard terms or by

individually negotiated terms.

    Generally, Incoterms do not deal with the consequences of breach of

contract and any exemptions from liability owing to various impediments.

These questions must be resolved by other stipulations in the contract of

sale and the applicable law.

    Incoterms have always been primarily intended for use where goods are

sold for delivery across national boundaries: hence, international

commercial terms. However, Incoterms are in practice at times also

incorporated into contracts for the sale of goods within purely domestic

markets. Where Incoterms are so used, the A2 and B2 clauses and any other

stipulation of other articles dealing with export and import do, of course,

become redundant.

2. WHY REVISIONS OF INCOTERMS? The main reason for successive revisions of

Incoterms has been the need to adapt them to contemporary commercial

practice. Thus, in the 1980 revision the term Free Carrier (now FCA) was

introduced in order to deal with the frequent case where the reception point

in maritime trade was no longer the traditional FOB - point (passing of the

ship's rail) but rather a point on land, prior to loading on board a vessel,

where the goods were stowed into a container for subsequent transport by sea

or by different means of transport in combination (so - called combined or

multimodal transport).

    Further, in the 1990 revision of Incoterms, the clauses dealing with the

seller's obligation to provide proof of delivery permitted a replacement of

paper documentation by EDI - messages provided the parties had agreed to

communicate electronically. Needless to say, efforts are constantly made to

improve upon the drafting and presentation of Incoterms in order to

facilitate their practical implementation.

3. INCOTERMS 2000

    During the process of revision, which has taken about two years, ICC has

done its best to invite views and responses to successive drafts from a wide

ranging spectrum of world traders, represented as these various sectors are

on the national committees through which ICC operates. Indeed, it has been

gratifying to see that this revision process has attracted far more reaction

from users around the world than any of the previous revisions of Incoterms.

The result of this dialogue is Incoterms 2000, a version which when compared

with Incoterms 1990may appear to have effected few changes. It is clear,

however, that Incoterms now enjoy world wide recognition and ICC has

therefore decided to consolidate upon that recognition and avoid change for

its own sake. On the other hand, serious efforts have been made to ensure

that the wording used in Incoterms 2000 clearly and accurately reflects

trade practice. Moreover, substantive changes have been made in two areas:

    ● the customs clearance and payment of duty obligations under FAS and

DEQ; and

    ● the loading and unloading obligations under FCA.

    All changes, whether substantive or formal have been made on the basis

of thorough research among users of Incoterms and particular regard has been

given to queries received since 1990 by the Panel of Incoterms Experts, set

up as an additional service to the users of Incoterms.

4. INCORPORATION OF INCOTERMS INTO THE CONTRACT OF SALE

    In view of the changes made to Incoterms from time to time, it is

important to ensure that where the parties intend to incorporate Incoterms

into their contract of sale, an express reference is always made to the

current version of Incoterms. This may easily be overlooked when, for

example, a reference has been made to an earlier version in standard

contract forms or in order forms used by merchants. A failure to refer to

the current version may then result in disputes as to whether the parties

intended to incorporate that version or an earlier version as a part of

their contract. Merchants wishing to use Incoterms 2000should therefore

clearly specify that their contract is governed by "Incoterms 2000".

5. THE STRUCTURE OF INCOTERMS

    In 1990, for ease of understanding, the terms were grouped in four

basically different categories: namely starting with the term whereby the

seller only makes the goods available to the buyer at the seller's own

premises (the "E"- term Ex works); followed by the second group whereby the

seller is called upon to deliver the goods to a carrier appointed by the

buyer (the "F" - terms FCA, FAS and FOB); continuing with the "C" - terms

where the seller has to contract for carriage, but without assuming the risk

of loss of or damage to the goods or additional costs due to events

occurring after shipment and dispatch (CFR, CIF, CPT and CIP); and, finally,

the "D" - terms whereby the seller has to bear all costs and risks needed to

bring the goods to the place of destination (DAF, DES, DEQ, DDU and DDP).

The following chart sets out this classification of the trade terms.

INCOTERMS 2000

 ----------------------------------------------

Group E   Departure

 ----------------------------------------------

           EXW Ex Works

               (... named place)

Group F   Main carriage unpaid

 ----------------------------------------------

           FCA Free Carrier

               (... named place)

           FAS Free Alongside Ship

               (... named port of shipment)

           FOB Free On Board

               (... named port of shipment)

Group C   Main Carriage Paid

 ----------------------------------------------

           CFR Cost and Freight

               (... named port of destination)

           CIF Cost, Insurance and Freight

               (... named port of destination)

           CPT Carriage Paid To

               (... named place of destination)

           CIP Carriage and Insurance Paid To

               (... named place of destination)

Group D   Arrival

 ----------------------------------------------

           DAF Delivered At Frontier

               (... named place)

           DES Delivered Ex Ship

               (... named port of destination)

           DEQ Delivered Ex Quay

               (... named port of destination)

           DDU Delivered Duty Unpaid

               (... named place of destination)

           DDP Delivered Duty Paid

               (... named place of destination)

    Further, under all terms, as in Incoterms 1990, the respective

obligations of the parties have been grouped under 10 headings where each

heading on the seller's side "mirrors" the position of the buyer with

respect to the same subject matter.

6. TERMINOLOGY

    While drafting Incoterms 2000, considerable efforts have been made to

achieve as much consistency as possible and desirable with respect to the

various expressions used throughout the thirteen terms. Thus, the use of

different expressions intended to convey the same meaning has been avoided.

Also, whenever possible, the same expressions as appear in the 1980 UN

Convention on Contracts for the International Sale of Goods (CISG) have been

used.

"Shipper"

    In some cases it has been necessary to use the same term to express two

different meanings simply because there has been no suitable alternative.

Traders will be familiar with this difficulty both in the context of

contracts of sale and also of contracts of carriage. Thus, for example, the

term "shipper" signifies both the person handing over the goods for carriage

and the person who makes the contract with the carrier: however, these two

"shippers" may be different persons, for example under a FOB contract where

the seller would hand over the goods for carriage and the buyer would make

the contract with the carrier.

"Delivery"

    It is particularly important to note that the term "delivery" is used in

two different senses in Incoterms. First, it is used to determine when the

seller has fulfilled his delivery obligation which is specified in the

A4clauses throughout Incoterms. Second, the term "delivery" is also used in

the context of the buyer's obligation to take or accept delivery of the

goods, an obligation which appears in the B4 clauses throughout Incoterms.

Used in this second context, the word "delivery" means first that the buyer

"accepts" the very nature of the "C"- terms, namely that the seller fulfils

his obligations upon the shipment of the goods and, second that the buyer is

obliged to receive the goods. This latter obligation is important so as to

avoid unnecessary charges for storage of the goods until they have been

collected by the buyer. Thus, for example under CFR and CIF contracts, the

buyer is bound to accept delivery of the goods and to receive them from the

carrier and if the buyer fails to do so, he may become liable to pay damages

to the seller who has made the contract of carriage with the carrier or,

alternatively, the buyer might have to pay demurrage charges resting upon

the goods in order to obtain the carrier's release of the goods to him. When

it is said in this context that the buyer must "accept delivery", this does

not mean that the buyer has accepted the goods as conforming with the

contract of sale, but only that he has accepted that the seller has

performed his obligation to hand the goods over for carriage in accordance

with the contract of carriage which he has to make under the A3 a) clauses

of the "C" - terms. So, if the buyer upon receipt of the goods at

destination were to find that the goods did not conform to the stipulations

in the contract of sale, he would be able to use any remedies which the

contract of sale and the applicable law gave him against the seller, matters

which, as has already been mentioned, lie entirely outside the scope of

Incoterms.

    Where appropriate, Incoterms 2000 have used the expression "placing the

goods at the disposal of" the buyer when the goods are made available to the

buyer at a particular place. This expression is intended to bear the same

meaning as that of the phrase "handing over the goods" used in the

1980United Nations Convention on Contracts for the International Sale of

Goods.

"Usual"

    The word "usual" appears in several terms, for example in EXW with

respect to the time of delivery (A4) and in the "C" - terms with respect to

the documents which the seller is obliged to provide and the contract of

carriage which the seller must procure (A8, A3). It can, of course, be

difficult to tell precisely what the word "usual" means, however, in many

cases, it is possible to identify what persons in the trade usually do and

this practice will then be the guiding light. In this sense, the word

"usual" is rather more helpful than the word "reasonable", which requires an

assessment not against the world of practice but against the more difficult

principle of good faith and fair dealing. In some circumstances it may well

be necessary to decide what is "reasonable". However, for the reasons given,

in Incoterms the word "usual" has been generally preferred to the word

"reasonable".

"Charges"

    With respect to the obligation to clear the goods for import it is

important to determine what is meant by "charges" which must be paid upon

import of the goods. In Incoterms 1990 the expression "official charges

payable upon exportation and importation of the goods" was used in DDP A6.

In Incoterms 2000DDP A6 the word "official" has been deleted, the reason

being that this word gave rise to some uncertainty when determining whether

the charge was "official" or not. No change of substantive meaning was

intended through this deletion. The "charges" which must be paid only

concern such charges as are a necessary consequence of the import as such

and which thus have to be paid according to the applicable import

regulations. Any additional charges levied by private parties in connection

with the import are not to be included in these charges, such as charges for

storage unrelated to the clearance obligation. However, the performance of

that obligation may well result in some costs to customs brokers or freight

forwarders if the party bearing the obligation does not do the work himself.

"Ports", "places", "points" and "premises"

    So far as concerns the place at which the goods are to be delivered,

different expressions are used in Incoterms. In the terms intended to be

used exclusively for carriage of goods by sea - such as FAS, FOB, CFR, CIF,

DES and DEQ - the expressions "port of shipment" and "port of

destination" have been used. In all other cases the word "place" has been

used. In some cases, it has been deemed necessary also to indicate a "point"

within the port or place as it may be important for the seller to know not

only that the goods should be delivered in a particular area like a city but

also where within that area the goods should be placed at the disposal of

the buyer. Contracts of sale would frequently lack information in this

respect and Incoterms therefore stipulate that if no specific point has been

agreed within the named place, and if there are several points available,

the seller may select the point which best suits his purpose (as an example

see FCA A4). Where the delivery point is the seller's place the expression

"the seller's premises" (FCA A4) has been used.

"Ship" and "vessel"

    In the terms intended to be used for carriage of goods by sea, the

expressions" ship" and "vessel" are used as synonyms. Needless to say, the

term "ship" would have to be used when it is an ingredient in the trade term

itself such as in "free alongside ship" (FAS) and" delivery ex ship" (DES).

Also, in view of the traditional use of the expression" passed the ship's

rail" in FOB, the word "ship" has had to be used in that connection.

    It appears that in many countries trade terms not included in Incoterms

are used particularly in railway traffic ("franco border", "franco

- frontiere", "Frei Granze"). However, under such terms it is normally not

intended that the seller should assume the risk of loss of or damage to

goods during the transport up to the border. It would be preferable in these

circumstances to use CPT indicating the border. If, on the other hand, the

parties intend that the seller should bear the risk during the transport DAF

indicating the border would be appropriate.

    The DDU term was added in the 1990 version of Incoterms. The term

fulfils an important function whenever the seller is prepared to deliver the

goods in the country of destination without clearing the goods for import

and paying the duty. In countries where import clearance may be difficult

and time consuming, it may be risky for the seller to undertake an

obligation to deliver the goods beyond the customs clearance point.

Although, according to DDU B5 and B6, the buyer would have to bear the

additional risks and costs which might follow from his failure to fulfil his

obligations to clear the goods for import, the seller is advised not to use

the DDU term in countries where difficulties might be expected in clearing

the goods for import.

"Checking" and "inspection" In the A9 and B9 clauses of Incoterms the

headings "checking - packaging and marking" and "inspection of the

goods" respectively have been used. Although the words "checking" and

"inspection" are synonyms, it has been deemed appropriate to use the former

word with respect to the seller's delivery obligation under A4 and to

reserve the latter for the particular case when a "pre - shipment

inspection" is performed, since such inspection normally is only required

when the buyer or the authorities of the export or import country want to

ensure that the goods conform with contractual or official stipulations

before they are shipped.

7. THE SELLER'S DELIVERY OBLIGATIONS

    Incoterms focus on the seller's delivery obligation. The precise

distribution of functions and costs in connection with the seller's

delivery of the goods would normally not cause problems where the parties

have a continuing commercial relationship. They would then establish a

practice between themselves ("course of dealing") which they would follow

in subsequent dealings in the same manner as they have done earlier.

However, if a new commercial relationship is established or if a contract

is made through the medium of brokers - as is common in the sale of

commodities -, one would have to apply the stipulations of the contract of

sale and, whenever Incoterms 2000 have been incorporated into that

contract, apply the division of functions, costs and risks following

therefrom.

    It would, of course, have been desirable if Incoterms could specify in

as detailed a manner as possible the duties of the parties in connection

with the delivery of the goods. Compared with Incoterms 1990, further

efforts have been made in this respect in some specified instances (see

for example FCA A4). But it has not been possible to avoid reference to

customs of the trade in FAS and FOB A4 ("in the manner customary at the

port"), the reason being that particularly in commodity trade the exact

manner in which the goods are delivered for carriage in FAS and FOB

contracts vary in the different sea ports.

8. PASSING OF RISKS AND COSTS RELATING TO THE GOODS

    The risk of loss of or damage to the goods, as well as the obligation

to bear the costs relating to the goods, passes from the seller to the

buyer when the seller has fulfilled his obligation to deliver the goods.

Since the buyer should not be given the possibility to delay the passing

of the risk and costs, all terms stipulate that the passing of risk and

costs may occur even before delivery, if the buyer does not take delivery

as agreed or fails to give such instructions (with respect to time for

shipment and/or place for delivery) as the seller may require in order to

fulfil his obligation to deliver the goods. It is a requirement for such

premature passing of risk and costs that the goods have been identified as

intended for the buyer or, as is stipulated in the terms, set aside for

him (appropriation).

    This requirement is particularly important under EXW, since under all

other terms the goods would normally have been identified as intended for

the buyer when measures have been taken for their shipment or dispatch

("F"-and "C" - terms) or their delivery at destination ("D" - terms). In

exceptional cases, however, the goods may have been sent from the seller

in bulk without identification of the quantity for each buyer and, if so,

passing of risk and cost does not occur before the goods have been

appropriated as aforesaid (cf. also article 69.3 of the 1980 United

Nations Convention on Contracts for the International Sale of Goods).

9. THE TERMS

    9.1. The "E" - term is the term in which the seller's obligation is at

its minimum: the seller has to do no more than place the goods at the

disposal of the buyer at the agreed place - usually at the seller's own

premises. On the other hand, as a matter of practical reality, the seller

would frequently assist the buyer in loading the goods on the latter's

collecting vehicle. Although EXW would better reflect this if the seller's

obligations were to be extended so as to include loading, it was thought

desirable to retain the traditional principle of the seller's minimum

obligation under EXW so that it could be used for cases where the seller

does not wish to assume any obligation whatsoever with respect to the

loading of the goods. If the buyer wants the seller to do more, this

should be made clear in the contract of sale.

    9.2. The "F" - terms require the seller to deliver the goods for

carriage as instructed by the buyer. The point at which the parties intend

delivery to occur in the FCA term has caused difficulty because of the

wide variety of circumstances which may surround contracts covered by this

term. Thus, the goods may be loaded on a collecting vehicle sent by the

buyer to pick them up at the seller's premises; alternatively, the goods

may need to be unloaded from a vehicle sent by the seller to deliver the

goods at a terminal named by the buyer. Incoterms 2000 take account of

these alternatives by stipulating that, when the place named in the

contract as the place of delivery is the seller's premises, delivery is

complete when the goods are loaded on the buyer's collecting vehicle and,

in other cases, delivery is complete when the goods are placed at the

disposal of the buyer not unloaded from the seller's vehicle. The

variations mentioned for different modes of transport in FCA A4of

Incoterms 1990 are not repeated in Incoterms 2000.

    The delivery point under FOB, which is the same under CFR and CIF, has

been left unchanged in Incoterms 2000 in spite of a considerable debate.

Although the notion under FOB to deliver the goods" across the ship's

rail" nowadays may seem inappropriate in many cases, it is nevertheless

understood by merchants and applied in a manner which takes account of the

goods and the available loading facilities. It was felt that a change of

the FOB -point would create unnecessary confusion, particularly with

respect to sale of commodities carried by sea typically under charter

parties. Unfortunately, the word "FOB" is used by some merchants merely to

indicate any point of delivery - such as "FOB factory", "FOB plant", "FOB

Ex seller's works" or other inland points - thereby neglecting what the

abbreviation means: Free On Board. It remains the case that such use of

"FOB" tends to create confusion and should be avoided.

    There is an important change of FAS relating to the obligation to

clear the goods for export, since it appears to be the most common

practice to put this duty on the seller rather than on the buyer. In order

to ensure that this change is duly noted it has been marked with capital

letters in the preamble of FAS.

    9.3. The "C" - terms require the seller to contract for carriage on

usual terms at his own expense. Therefore, a point up to which he would

have to pay transport costs must necessarily be indicated after the

respective "C" term. Under the CIF and CIP terms the seller also has to

take out insurance and bear the insurance cost. Since the point for the

division of costs is fixed at a point in the country of destination, the

"C" - terms are frequently mistakenly believed to be arrival contracts, in

which the seller would bear all risks and costs until the goods have

actually arrived at the agreed point. However, it must be stressed that

the "C" - terms are of the same nature as the "F" - terms in that the

seller fulfils the contract in the country of shipment or dispatch. Thus,

the contracts of sale under the "C" - terms, like the contracts under the

"F" - terms, fall within the category of shipment contracts.

    It is in the nature of shipment contracts that, while the seller is

bound to pay the normal transport cost for the carriage of the goods by a

usual route and in a customary manner to the agreed place, the risk of

loss of or damage to the goods, as well as additional costs resulting from

events occurring after the goods having been appropriately delivered for

carriage, fall upon the buyer. Hence, the "C" - terms are distinguishable

from all other terms in that they contain two "critical" points, one

indicating the point to which the seller is bound to arrange and bear the

costs of a contract of carriage and another one for the allocation of

risk. For this reason, the greatest caution must be observed when adding

obligations of the seller to the "C" - terms which seek to extend the

seller's responsibility beyond the aforementioned "critical" point for the

allocation of risk. It is of the very essence of the "C" - terms that the

seller is relieved of any further risk and cost after he has duly

fulfilled his contract by contracting for carriage and handing over the

goods to the carrier and by providing for insurance under the CIF - and

CIP - terms.

    The essential nature of the "C" - terms as shipment contracts is also

illustrated by the common use of documentary credits as the preferred mode

of payment used in such terms. Where it is agreed by the parties to the

sale contract that the seller will be paid by presenting the agreed

shipping documents to a bank under a documentary credit, it would be quite

contrary to the central purpose of the documentary credit for the seller

to bear further risks and costs after the moment when payment had been

made under documentary credits or otherwise upon shipment and dispatch of

the goods. Of course, the seller would have to bear the cost of the

contract of carriage irrespective of whether freight is pre - paid upon

shipment or is payable at destination (freight collect); however,

additional costs which may result from events occurring subsequent to

shipment and dispatch are necessarily for the account of the buyer.

    If the seller has to provide a contract of carriage which involves

payment of duties, taxes and other charges, such costs will, of course,

fall upon the seller to the extent that they are for his account under

that contract. This is now explicitly set forth in the A6 clause of all

"C"-terms. If it is customary to procure several contracts of carriage

involving transshipment of the goods at intermediate places in order to

reach the agreed destination, the seller would have to pay all these

costs, including any costs incurred when the goods are transshipped from

one means of conveyance to the other. If, however, the carrier exercised

his rights under a transshipment - or similar clause - in order to avoid

unexpected hindrances (such as ice, congestion, labour disturbances,

government orders, war or warlike operations) then any additional cost

resulting therefrom would be for the account of the buyer, since the

seller's obligation is limited to procuring the usual contract of

carriage. It happens quite often that the parties to the contract of sale

wish to clarify the extent to which the seller should procure a contract

of carriage including the costs of discharge. Since such costs are

normally covered by the freight when the goods are carried by regular

shipping lines, the contract of sale will frequently stipulate that the

goods are to be so carried or at least that they are to be carried under

"liner terms". In other cases, the word "landed" is added after CFR or

CIF. However, it is advisable not to use abbreviations added to the "C" -

terms unless, in the relevant trade, the meaning of the abbreviations is

clearly understood and accepted by the contracting parties or under any

applicable law or custom of the trade.

    In particular, the seller should not - and indeed could not, without

changing the very nature of the "C" - terms - undertake any obligation

with respect to the arrival of the goods at destination, since the risk of

any delay during the carriage is borne by the buyer. Thus, any obligation

with respect to time must necessarily refer to the place of shipment or

dispatch, for example," shipment (dispatch) not later than...". An

agreement for example, "CFR Hamburg not later than..." is really a

misnomer and thus open to different possible interpretations. The parties

could be taken to have meant either that the goods must actually arrive at

Hamburg at the specified date, in which case the contract is not a

shipment contract but an arrival contract or, alternatively, that the

seller must ship the goods at such a time that they would normally arrive

at Hamburg before the specified date unless the carriage would have been

delayed because of unforeseen events.

    It happens in commodity trades that goods are bought while they are at

sea and that, in such cases, the word "afloat" is added after the trade

term. Since the risk of loss of or damage to the goods would then, under

the CFR - and CIF - terms, have passed from the seller to the buyer,

difficulties of interpretation might arise. One possibility would be to

maintain the ordinary meaning of the CFR - and CIF - terms with respect to

the allocation of risk between seller and buyer, namely that risk passes

on shipment: this would mean that the buyer might have to assume the

consequences of events having already occurred at the time when the

contract of sale enters into force. The other possibility would be to let

the passing of the risk coincide with the time when the contract of sale

is concluded. The former possibility might well be practical, since it is

usually impossible to ascertain the condition of the goods while they are

being carried. For this reason the 1980 United Nations Convention on

Contracts for the International Sale of Goods article 68 stipulates that

"if the circumstances so indicate, the risk is assumed by the buyer from

the time the goods were handed over to the carrier who issued the

documents embodying the contract of carriage". There is, however, an

exception to this rule when "the seller knew or ought to have known that

the goods had been lost or damaged and did not disclose this to the

buyer". Thus, the interpretation of a CFR - or CIF - term with the

addition of the word "afloat" will depend upon the law applicable to the

contract of sale. The parties are advised to ascertain the applicable law

and any solution which might follow therefrom. In case of doubt, the

parties are advised to clarify the matter in their contract. In practice,

the parties frequently continue to use the traditional expression C & F

(or C and F, C+F). Nevertheless, in most cases it would appear that they

regard these expressions as equivalent to CFR. In order to avoid

difficulties of interpreting their contract the parties should use the

correct Incoterms which is CFR, the only world - wide -accepted standard

abbreviation for the term "Cost and Freight (... named port of

destination)".

    CFR and CIF in A8 of Incoterms 1990 obliged the seller to provide a

copy of the charterparty whenever his transport document (usually the bill

of lading) contained a reference to the charterparty, for example, by the

frequent notation" all other terms and conditions as per charterparty".

Although, of course, a contracting party should always be able to

ascertain all terms of his contract - preferably at the time of the

conclusion of the contract - it appears that the practice to provide the

charterparty as aforesaid has created problems particularly in connection

with documentary credit transactions. The obligation of the seller under

CFR and CIF to provide a copy of the charterparty together with other

transport documents has been deleted in Incoterms 2000.

    Although the A8 clauses of Incoterms seek to ensure that the seller

provides the buyer with "proof of delivery", it should be stressed that

the seller fulfils that requirement when he provides the "usual" proof.

Under CPT and CIP it would be the "usual transport document" and under CFR

and CIF a bill of lading or a sea waybill. The transport documents must be

"clean", meaning that they must not contain clauses or notations expressly

declaring a defective condition of the goods and/or the packaging. If such

clauses or notations appear in the document, it is regarded as "unclean"

and would then not be accepted by banks in documentary credit

transactions. However, it should be noted that a transport document even

without such clauses or notations would usually not provide the buyer with

incontrovertible proof as against the carrier that the goods were shipped

in conformity with the stipulations of the contract of sale. Usually, the

carrier would, in standardized text on the front page of the transport

document, refuse to accept responsibility for information with respect to

the goods by indicating that the particulars inserted in the transport

document constitute the shipper's declarations and therefore that the

information is only" said to be" as inserted in the document. Under most

applicable laws and principles, the carrier must at least use reasonable

means of checking the correctness of the information and his failure to do

so may make him liable to the consignee. However, in container trade, the

carrier's means of checking the contents in the container would not exist

unless he himself was responsible for stowing the container.

    There are only two terms which deal with insurance, namely CIF and

CIP. Under these terms the seller is obliged to procure insurance for the

benefit of the buyer. In other cases it is for the parties themselves to

decide whether and to what extent they want to cover themselves by

insurance. Since the seller takes out insurance for the benefit of the

buyer, he would not know the buyer's precise requirements. Under the

Institute Cargo Clauses drafted by the Institute of London Underwriters,

insurance is available in "minimum cover" under Clause C, "medium cover"

under Clause B and "most extended cover" under Clause A. Since in the sale

of commodities under the CIF term the buyer may wish to sell the goods in

transit to a subsequent buyer who in turn may wish to resell the goods

again, it is impossible to know the insurance cover suitable to such

subsequent buyers and, therefore, the minimum cover under CIF has

traditionally been chosen with the possibility for the buyer to require

the seller to take out additional insurance. Minimum cover is however

unsuitable for sale of manufactured goods where the risk of theft,

pilferage or improper handling or custody of the goods would require more

than the cover available under Clause C. Since CIP, as distinguished from

CIF, would normally not be used for the sale of commodities, it would have

been feasible to adopt the most extended cover under CIP rather than the

minimum cover under CIF. But to vary the seller's insurance obligation

under CIF and CIP would lead to confusion and both terms therefore limit

the seller's insurance obligation to the minimum cover. It is particularly

important for the CIP - buyer to observe this: should additional cover be

required, he should agree with the seller that the latter could take out

additional insurance or, alternatively, arrange for extended insurance

cover himself. There are also particular instances where the buyer may

wish to obtain even more protection than is available under Institute

Clause A, for example insurance against war, riots, civil commotion,

strikes or other labour disturbances. If he wishes the seller to arrange

such insurance he must instruct him accordingly, in which case the seller

would have to provide such insurance if procurable.

    9.4. The "D" - terms are different in nature from the "C" - terms,

since the seller according to the "D" - terms is responsible for the

arrival of the goods at the agreed place or point of destination at the

border or within the country of import. The seller must bear all risks and

costs in bringing the goods thereto. Hence, the "D" - terms signify

arrival contracts, while the "C" - terms evidence departure (shipment)

contracts.

    Under the "D" - terms except DDP the seller does not have to deliver

the goods cleared for import in the country of destination.

    Traditionally, the seller had the obligation to clear the goods for

import under DEQ, since the goods had to be landed on the quay and thus

were brought into the country of import. But owing to changes in customs

clearance procedures in most countries, it is now more appropriate that

the party domiciled in the country concerned undertakes the clearance and

pays the duties and other charges. Thus, a change in DEQ has been made for

the same reason as the change in FAS previously mentioned. As in FAS, in

DEQ the change has been marked with capital letters in the preamble.

10. THE EXPRESSION "NO OBLIGATION"

    As appears from the expressions "the seller must" and "the buyer

must" Incoterms are only concerned with the obligations which the parties owe

to each other. The words "no obligation" have therefore been inserted

whenever one party does not owe an obligation to the other party. Thus, if

for instance according to A3 of the respective term the seller has to

arrange and pay for the contract of carriage we find the words "no

obligation" under the heading "contract of carriage" in B3 a) setting forth

the buyer's position. Again, where neither party owes the other an

obligation, the words "no obligation" will appear with respect to both

parties, for example, with respect to insurance.

    In either case, it is important to point out that even though one party

may be under "no obligation" towards the other to perform a certain task,

this does not mean that it is not in his interest to perform that task.

Thus, for example, just because a CFR buyer owes his seller no duty to make

a contract of insurance under B4, it is clearly in his interest to make such

a contract, the seller being under no such obligation to procure insurance

cover under A4.

11. VARIANTS OF INCOTERMS

    In practice, it frequently happens that the parties themselves by adding

words to an Incoterms seek further precision than the term could offer. It

should be underlined that Incoterms give no guidance whatsoever for such

additions. Thus, if the parties cannot rely on a well - established custom

of the trade for the interpretation of such additions they may encounter

serious problems when no consistent understanding of the additions could be

proven.

    If for instance the common expressions "FOB stowed" or "EXW loaded" are

used, it is impossible to establish a world - wide understanding to the

effect that the seller's obligations are extended not only with respect to

the cost of actually loading the goods in the ship or on the vehicle

respectively but also include the risk of fortuitous loss of or damage to

the goods in the process of stowage and loading. For these reasons, the

parties are strongly advised to clarify whether they only mean that the

function or the cost of the stowage and loading operations should fall upon

the seller or whether he should also bear the risk until the stowage and

loading has actually been completed. These are questions to which Incoterms

do not provide an answer: consequently, if the contract too fails expressly

to describe the parties' intentions, the parties may be put to much

unnecessary trouble and cost.

    Although Incoterms 2000 do not provide for many of these commonly used

variants, the preambles to certain trade terms do alert the parties to the

need for special contractual terms if the parties wish to go beyond the

stipulations of Incoterms.

EXW         the added obligation for the seller to load the goods on the

             buyer's collecting vehicle;

CIF/CIP     the buyer's need for additional insurance;

DEQ         the added obligation for the seller to pay for costs after

             discharge.

    In some cases sellers and buyers refer to commercial practice in liner

and charter party trade. In these circumstances, it is necessary to clearly

distinguish between the obligations of the parties under the contract of

carriage and their obligations to each other under the contract of sale.

Unfortunately, there are no authoritative definitions of expressions such as

"liner terms" and "terminal handling charges" (THC). Distribution of costs

under such terms may differ in different places and change from time to

time. The parties are recommended to clarify in the contract of sale how

such costs should be distributed between themselves.

    Expressions frequently used in charterparties, such as "FOB stowed",

"FOB stowed and trimmed", are sometimes used in contracts of sale in order

to clarify to what extent the seller under FOB has to perform stowage and

trimming of the goods onboard the ship. Where such words are added, it is

necessary to clarify in the contract of sale whether the added obligations

only relate to costs or to both costs and risks.

    As has been said, every effort has been made to ensure that Incoterms

reflect the most common commercial practice. However in some cases -

particularly where Incoterms 2000 differ from Incoterms 1990 - the parties

may wish the trade terms to operate differently. They are reminded of such

options in the preamble of the terms signaled by the word "However".

12. CUSTOMS OF THE PORT OR OF A PARTICULAR TRADE

    Since Incoterms provide a set of terms for use in different trades and

regions it is impossible always to set forth the obligations of the parties

with precision. To some extent it is therefore necessary to refer to the

custom of the port or of the particular trade or to the practices which the

parties themselves may have established in their previous dealings (cf.

article 9 of the 1980 United Nations Convention on Contracts for the

International Sale of Goods). It is of course desirable that sellers and

buyers keep themselves duly informed of such customs when they negotiate

their contract and that, whenever uncertainty arises, they clarify their

legal position by appropriate clauses in their contract of sale. Such

special provisions in the individual contract would supersede or vary

anything that is set forth as a rule of interpretation in the various

Incoterms.

13. THE BUYER'S OPTIONS AS TO THE PLACE OF SHIPMENT

    In some situations, it may not be possible at the time when the contract

of sale is entered into to decide precisely on the exact point or even the

place where the goods should be delivered by the seller for carriage. For

instance reference might have been made at this stage merely to a "range" or

to a rather large place, for example, seaport, and it is then usually

stipulated that the buyer has the right or duty to name later on the more

precise point within the range or the place. If the buyer has a duty to name

the precise point as aforesaid his failure to do so might result in

liability to bear the risks and additional costs resulting from such failure

(B5/B7 of all terms). In addition, the buyer's failure to use his right to

indicate the point may give the seller the right to select the point which

best suits his purpose (FCA A4).

14. CUSTOMS CLEARANCE

    The term "customs clearance" has given rise to misunderstandings. Thus,

whenever reference is made to an obligation of the seller or the buyer to

undertake obligations in connection with passing the goods through customs

of the country of export or import it is now made clear that this obligation

does not only include the payment of duty and other charges but also the

performance and payment of whatever administrative matters are connected

with the passing of the goods through customs and the information to the

authorities in this connection. Further, it has - although quite wrongfully

- been considered in some quarters inappropriate to use terms dealing with

the obligation to clear the goods through customs when, as in intra -

European Union trade or other free trade areas, there is no longer any

obligation to pay duty and no restrictions relating to import or export. In

order to clarify the situation, the words "where applicable" have been added

in the A2 and B2, A6 and B6 clauses of the relevant Incoterms in order for

them to be used without any ambiguity where no customs procedures are

required.

    It is normally desirable that customs clearance is arranged by the party

domiciled in the country where such clearance should take place or at least

by somebody acting there on his behalf. Thus, the exporter should normally

clear the goods for export, while the importer should clear the goods for

import. Incoterms 1990 departed from this under the trade terms EXW and FAS

(export clearance duty on the buyer) and DEQ (import clearance duty on the

seller) but in Incoterms 2000 FAS and DEQ place the duty of clearing the

goods for export on the seller and to clear them for import on the buyer

respectively, while EXW - representing the seller's minimum obligation - has

been left unattended (export clearance duty on the buyer). Under DDP the

seller specifically agrees to do what follows from the very name of the term

- Delivered

    Duty Paid - namely to clear the goods for import and pay any duty as a

consequence thereof.

15. PACKAGING

    In most cases, the parties would know beforehand which packaging is

required for the safe carriage of the goods to destination. However, since

the seller's obligation to pack the goods may well vary according to the

type and duration of the transport envisaged, it has been felt necessary to

stipulate that the seller is obliged to pack the goods in such a manner as

is required for the transport, but only to the extent that the circumstances

relating to the transport are made known to him before the contract of sale

is concluded (cf. articles 35.1. and 35.2.b. of the 1980 United Nations

Convention on Contracts for the International Sale of Goods where the goods,

including packaging, must be "fit for any particular purpose expressly or

impliedly made known to the seller at the time of the conclusion of the

contract, except where the circumstances show that the buyer did not rely,

or that it was unreasonable for him to rely, on the seller's skill and judgement").

16. INSPECTION OF GOODS

    In many cases, the buyer may be well advised to arrange for inspection

of the goods before or at the time they are handed over by the seller for

carriage (so called pre - shipment inspection or PSI). Unless the contract

stipulates otherwise, the buyer would himself have to pay the cost for such

inspection that is arranged in his own interest. However, if the inspection

has been made in order to enable the seller to comply with any mandatory

rules applicable to the export of the goods in his own country, the seller

would have to pay for that inspection, unless the EXW term is used, in which

case the costs of such inspection are for the account of the buyer.

17. MODE OF TRANSPORT AND THE APPROPRIATE INCOTERMS 2000

Any mode of transport

Group E

 ----------------------------------------------

          EXW Ex Works

              (… named place)

  Group F

 ----------------------------------------------

         FCA Free Carrier

              (… named place)

  Group C

 ----------------------------------------------

         CPT Carriage Paid To

              (… named place of destination)

          CIP Carriage and Insurance Paid To

              (… named place of destination)

  Group D

 ----------------------------------------------

         DAF Delivered At Frontier

              (… named place)

          DDU Delivered Duty Unpaid

              (… named place of destination)

          DDP Delivered Duty Paid

              (… named place of destination)

     Maritime and inland waterway transport only

  Group F

 ----------------------------------------------

         FAS Free Alongside Ship

              (… named port of shipment)

          FOB Free On Board

              (… named port of shipment)

  Group C

 ----------------------------------------------

         CFR Cost and Freight

              (… named port of destination)

          CIF Cost, Insurance and Freight

              (… named port of destination)

  Group D

 ----------------------------------------------

         DES Delivered Ex Ship

              (… named port of destination)

          DEQ Delivered Ex Quay

              (… named port of destination)

18. THE RECOMMENDED USE

    In some cases the preamble recommends the use or non - use of a

particular term. This is particularly important with respect to the choice

between FCA and FOB. Regrettably, merchants continue to use FOB when it is

totally out of place thereby causing the seller to incur risks subsequent to

the handing over of the goods to the carrier named by the buyer. FOB is only

appropriate to use where the goods are intended to be delivered "across the

ship's rail" or, in any event, to the ship and not where the goods are

handed over to the carrier for subsequent entry into the ship, for example

stowed in containers or loaded on lorries or wagons in so - called roll on -

roll off traffic. Thus, a strong warning has been made in the preamble of

FOB that the term should not be used when the parties do not intend delivery

across the ship's rail.

    It happens that the parties by mistake use terms intended for carriage

of goods by sea also when another mode of transport is contemplated. This

may put the seller in the unfortunate position that he can not fulfil his

obligation to tender the proper document to the buyer (for example a bill of

lading, sea waybill or the electronic equivalent). The chart printed at

paragraph 17 above makes clear which trade term in Incoterms 2000 it is

appropriate to use for which mode of transport. Also, it is indicated in the

preamble of each term whether it can be used for all modes of transport or

only for carriage of goods by sea.

19. THE BILL OF LADING AND ELECTRONIC COMMERCE

    Traditionally, the on board bill of lading has been the only acceptable

document to be presented by the seller under the CFR and CIF terms. The bill

of lading fulfils three important functions, namely:

  - proof of delivery of the goods on board the vessel;

  - evidence of the contract of carriage; and

  - a means of transferring rights to the goods in transit to another party

by the transfer of the paper document to him.

    Transport documents other than the bill of lading would fulfil the two

first mentioned functions, but would not control the delivery of the goods

at destination or enable a buyer to sell the goods in transit by

surrendering the paper document to his buyer. Instead, other transport

documents would name the party entitled to receive the goods at destination.

The fact that the possession of the bill of lading is required in order to

obtain the goods from the carrier at destination makes it particularly

difficult to replace by electronic means of communication.

    Further, it is customary to issue bills of lading in several originals

but it is, of course, of vital importance for a buyer or a bank acting upon

his instructions in paying the seller to ensure that all originals are

surrendered by the seller (so called "full set"). This is also a requirement

under the ICC Rules for Documentary Credits (the so - called ICC Uniform

Customs and Practice, "UCP"; current version at date of publication of

Incoterms 2000: ICC publication 500).

    The transport document must evidence not only delivery of the goods to

the carrier but also that the goods, as far as could be ascertained by the

carrier, were received in good order and condition. Any notation on the

transport document which would indicate that the goods had not been in such

condition would make the document "unclean" and would thus make it

unacceptable under the UCP. In spite of the particular legal nature of the

bill of lading it is expected that it will be replaced by electronic means

in the near future. The 1990 version of Incoterms had already taken this

expected development into proper account. According to the A8 clauses, paper

documents may be replaced by electronic messages provided the parties have

agreed to communicate electronically. Such messages could be transmitted

directly to the party concerned or through a third party providing added -

value services. One such service that can be usefully provided by a third

party is registration of successive holders of a bill of lading. Systems

providing such services, such as the so - called BOLERO service, may require

further support by appropriate legal norms and principles as evidenced by

the CMI 1990 Rules for Electronic Bills of Lading and articles 1617 of the

1996 UNCITRAL Model Law on Electronic Commerce.

20. NON - NEGOTIABLE TRANSPORT DOCUMENTS INSTEAD OF BILLS OF LADING

    In recent years, a considerable simplification of documentary practices

has been achieved. Bills of lading are frequently replaced by non -

negotiable documents similar to those which are used for other modes of

transport than carriage by sea. These documents are called "sea waybills",

"liner waybills", "freight receipts", or variants of such expressions. Non -

negotiable documents are quite satisfactory to use except where the buyer

wishes to sell the goods in transit by surrendering a paper document to the

new buyer. In order to make this possible, the obligation of the seller to

provide a bill of lading under CFR and CIF must necessarily be retained.

However, when the contracting parties know that the buyer does not

contemplate selling the goods in transit, they may specifically agree to

relieve the seller from the obligation to provide a bill of lading, or,

alternatively, they may use CPT and CIP where there is no requirement to

provide a bill of lading.

21. THE RIGHT TO GIVE INSTRUCTIONS TO THE CARRIER

    A buyer paying for the goods under a "C" - term should ensure that the

seller upon payment is prevented from disposing of the goods by giving new

instructions to the carrier. Some transport documents used for particular

modes of transport (air, road or rail) offer the contracting parties a

possibility to bar the seller from giving such new instructions to the

carrier by providing the buyer with a particular original or duplicate of

the waybill. However, the documents used instead of bills of lading for

maritime carriage do not normally contain such a barring function. The

Comite Maritime International has remedied this shortcoming of the above -

mentioned documents by introducing the 1990"Uniform Rules for Sea Waybills"

enabling the parties to insert a "no - disposal" clause whereby the seller

surrenders the right to dispose of the goods by instructions to the carrier

to deliver the goods to somebody else or at another place than stipulated in

the waybill.

22. ICC ARBITRATION

    Contracting parties who wish to have the possibility of resorting to ICC

Arbitration in the event of a dispute with their contracting partner should

specifically and clearly agree upon ICC Arbitration in their contract or, in

the event that no single contractual document exists, in the exchange of

correspondence which constitutes the agreement between them. The fact of

incorporating one or more Incoterms in a contract or the related

correspondence does NOT by itself constitute an agreement to have resort to

ICC Arbitration.

    The following standard arbitration clause is recommended by ICC:

    "All disputes arising out of or in connection with the present contract

shall be finally settled under the Rules of Arbitration of the International

Chamber of Commerce by one or more arbitrators appointed in accordance with

the said Rules."

EX WORKS

(... named place)

    "Ex works" means that the seller delivers when he places the goods at

the disposal of the buyer at the seller's premises or another named place

(i. e. works, factory, warehouse, etc.) not cleared for export and not

loaded on any collecting vehicle.

    This term thus represents the minimum obligation for the seller, and the

buyer has to bear all costs and risks involved in taking the goods from the

seller's premises.

    However, if the parties wish the seller to be responsible for the

loading of the goods on departure and to bear the risks and all the costs of

such loading, this should be made clear by adding explicit wording to this

effect in the contract of sale1. This term should not be used when the buyer

cannot carry out the export formalities directly or indirectly. In such

circumstances, the FCA term should be used, provided the seller agrees that

he will load at his cost and risk.

    注1 Refer to Introduction Paragraph 11.

A THE SELLER'S OBLIGATIONS

B THE BUYER'S OBLIGATIONS

A1 Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1 Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2 Licenses, authorizations and formalities

    The seller must render the buyer, at the latter's request, risk and

expense, every assistance in obtaining, where applicable2, any export

licence or other official authorization necessary for the export of the

goods.

B2 Licenses, authorizations and formalities

    注2 Refer to Introduction Paragraph 14.

    The buyer must obtain at his own risk and expense any export and import

licence or other official authorization and carry out, where applicable3,

all customs formalities for the export of the goods.

    注3 Refer to Introduction Paragraph 14.

A3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

B3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation6.

    注6 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation7.

    注7 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must place the goods at the disposal of the buyer at the

named place of delivery, not loaded on any collecting vehicle, on the date

or within the period agreed or, if no such time is agreed, at the usual time

for delivery of such goods. If no specific point has been agreed within the

named place, and if there are several points available, the seller may

select the point at the place of delivery which best suits his purpose. B4

Taking delivery

    The buyer must take delivery of the goods when they have been delivered

in accordance with A4 and A7/B7.

A5 Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have been delivered in

accordance with A4.

B5 Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods

    ● from the time they have been delivered in accordance with A4; and

    ● from the agreed date or the expiry date of any period fixed for

taking delivery which arise because he fails to give notice in accordance

with B7, provided, however, that the goods have been duly appropriated to

the contract, that is to say clearly set aside or otherwise identified as

the contract goods.

A6 Division of costs

    The seller must, subject to the provisions of B6, pay all costs relating

to the goods until such time as they have been delivered in accordance with

A4.

B6 Division of costs

    The buyer must pay

    ● all costs relating to the goods from the time they have been

delivered in accordance with A4; and

    ● any additional costs incurred by failing either to take delivery of

the goods when they have been placed at his disposal, or to give appropriate

notice in accordance with B7 provided, however, that the goods have been

duly appropriated to the contract, that is to say, clearly set aside or

otherwise identified as the contract goods; and

    ● where applicable8, all duties, taxes and other charges as well as the

costs of carrying out customs formalities payable upon export.

    注8 Refer to Introduction Paragraph 14.

    The buyer must reimburse all costs and charges incurred by the seller in

rendering assistance in accordance with A2.

A7 Notice to the buyer

    The seller must give the buyer sufficient notice as to when and where

the goods will be placed at his disposal.

B7 Notice to the seller

    The buyer must, whenever he is entitled to determine the time within an

agreed period and/or the place of taking delivery, give the seller

sufficient notice thereof.

A8 Proof of delivery, transport document or equivalent electronic message

    No obligation9.

    注9 Refer to Introduction Paragraph 10.

B8 Proof of delivery, transport document or equivalent electronic message

    The buyer must provide the seller with appropriate evidence of having

taken delivery.

A9 Checking - packaging - marking

    The seller must pay the costs of those checking operations (such as

checking quality, measuring, weighing, counting) which are necessary for the

purpose of placing the goods at the buyer's disposal.

    The seller must provide at his own expense packaging (unless it is usual

for the particular trade to make the goods of the contract description

available unpacked) which is required for the transport of the goods, to the

extent that the circumstances relating to the transport (for example

modalities, destination) are made known to the seller before the contract of

sale is concluded. Packaging is to be marked appropriately.

B9 Inspection of goods

    The buyer must pay the costs of any pre - shipment inspection, including

inspection mandated by the authorities of the country of export.

A10 Other obligations

    The seller must render the buyer at the latter's request, risk and

expense, every assistance in obtaining any documents or equivalent

electronic messages issued or transmitted in the country of delivery and/or

of origin which the buyer may require for the export and/or import of the

goods and, where necessary, for their transit through any country.

    The seller must provide the buyer, upon request, with the necessary

information for procuring insurance.

B10 Other obligations

    The buyer must pay all costs and charges incurred in obtaining the

documents or equivalent electronic messages mentioned in A10 and reimburse

those incurred by the seller in rendering his assistance in accordance

therewith.

     FCA

FREE CARRIER

(... named place)

    "Free Carrier" means that the seller delivers the goods, cleared for

export, to the carrier nominated by the buyer at the named place. It should

be noted that the chosen place of delivery has an impact on the obligations

of loading and unloading the goods at that place. If delivery occurs at the

seller's premises, the seller is responsible for loading. If delivery occurs

at any other place, the seller is not responsible for unloading.

    This term may be used irrespective of the mode of transport, including

multimodal transport.

    "Carrier" means any person who, in a contract of carriage, undertakes to

perform or to procure the performance of transport by rail, road, air, sea,

inland waterway or by a combination of such modes.

    If the buyer nominates a person other than a carrier to receive the

goods, the seller is deemed to have fulfilled his obligation to deliver the

goods when they are delivered to that person.

A THE SELLER'S OBLIGATIONS

B THE BUYER'S OBLIGATIONS

A1 Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1 Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2 Licenses, authorizations and formalities

    The seller must obtain at his own risk and expense any export licence or

other official authorization and carry out, where applicable1, all customs

formalities necessary for the export of the goods.

    注1 Refer to Introduction Paragraph 14.

B2 Licenses, authorizations and formalities

    The buyer must obtain at his own risk and expense any import licence or

other official authorization and carry out, where applicable2, all customs

formalities for the import of the goods and for their transit through any

country.

    注2 Refer to Introduction Paragraph 14.

A3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation3. However, if requested by the buyer or if it is

commercial practice and the buyer does not give an instruction to the

contrary in due time, the seller may contract for carriage on usual terms at

the buyer's risk and expense. In either case, the seller may decline to make

the contract and, if he does, shall promptly notify the buyer accordingly.

    注3 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

B3 Contracts of carriage and insurance

    a) Contract of carriage

    The buyer must contract at his own expense for the carriage of the goods

from the named place, except when the contract of carriage is made by the

seller as provided for in A3 a).

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must deliver the goods to the carrier or another person

nominated by the buyer, or chosen by the seller in accordance with A3 a), at

the named place on the date or within the period agreed for delivery.

    Delivery is completed,

    a) If the named place is the seller's premises, when the goods have been

loaded on the means of transport provided by the carrier nominated by the

buyer or another person acting on his behalf.

    b) If the named place is anywhere other than a), when the goods are

placed at the disposal of the carrier or another person nominated by the

buyer, or chosen by the seller in accordance with A3 a) on the seller's

means of transport not unloaded.

    If no specific point has been agreed within the named place, and if

there are several points available, the seller may select the point at the

place of delivery which best suits his purpose.

    Failing precise instructions from the buyer, the seller may deliver the

goods for carriage in such a manner as the transport mode and/or the

quantity and/or nature of the goods may require.

B4 Taking delivery

    The buyer must take delivery of the goods when they have been delivered

in accordance with A4.

A5 Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have been delivered in

accordance with A4.

B5 Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods

    ● from the time they have been delivered in accordance with A4; and

    ● from the agreed date or the expiry date of any agreed period for

delivery which arise either because he fails to nominate the carrier or

another person in accordance with A4, or because the carrier or the party

nominated by the buyer fails to take the goods into his charge at the agreed

time, or because the buyer fails to give appropriate notice in accordance

with B7, provided, however, that the goods have been duly appropriated to

the contract, that is to say, clearly set aside or otherwise identified as

the contract goods.

A6 Division of costs

    The seller must, subject to the provisions of B6, pay

    ● all costs relating to the goods until such time as they have been

delivered in accordance with A4; and

    ● where applicable6, the costs of customs formalities as well as all

duties, taxes, and other charges payable upon export.

    注6 Refer to Introduction Paragraph 14.

B6 Division of costs

    The buyer must pay

    ● all costs relating to the goods from the time they have been

delivered in accordance with A4; and

    ● any additional costs incurred, either because he fails to nominate

the carrier or another person in accordance with A4 or because the party

nominated by the buyer fails to take the goods into his charge at the agreed

time, or because he has failed to give appropriate notice in accordance with

B7, provided, however, that the goods have been duly appropriated to the

contract, that is to say, clearly set aside or otherwise identified as the

contract goods; and

    ● where applicable7, all duties, taxes and other charges as well as the

costs of carrying out customs formalities payable upon import of the goods

and for their transit through any country.

    注7 Refer to Introduction Paragraph 14.

A7 Notice to the buyer

    The seller must give the buyer sufficient notice that the goods have

been delivered in accordance with A4. Should the carrier fail to take

delivery in accordance with A4 at the time agreed, the seller must notify

the buyer accordingly.

B7 Notice to the seller

    The buyer must give the seller sufficient notice of the name of the

party designated in A4 and, where necessary, specify the mode of transport,

as well as the date or period for delivering the goods to him and, as the

case may be, the point within the place where the goods should be delivered

to that party.

A8 Proof of delivery, transport document or equivalent electronic message

    The seller must provide the buyer at the seller's expense with the usual

proof of delivery of the goods in accordance with A4.

    Unless the document referred to in the preceding paragraph is the

transport document, the seller must render the buyer at the latter's

request, risk and expense, every assistance in obtaining a transport

document for the contract of carriage (for example a negotiable bill of

lading, a non negotiable sea waybill, an inland waterway document, an air

waybill, a railway consignment note, a road consignment note, or a

multimodal transport document).

    When the seller and the buyer have agreed to communicate electronically,

the document referred to in the preceding paragraph may be replaced by an

equivalent electronic data interchange (EDI) message.

B8 Proof of delivery, transport document or equivalent electronic message

    The buyer must accept the proof of delivery in accordance with A8.

A9 Checking - packaging - marking

    The seller must pay the costs of those checking operations (such as

checking quality, measuring, weighing, counting) which are necessary for the

purpose of delivering the goods in accordance with A4.

    The seller must provide at his own expense packaging (unless it is usual

for the particular trade to send the goods of the contract description

unpacked) which is required for the transport of the goods, to the extent

that the circumstances relating to the transport (for example modalities,

destination) are made known to the seller before the contract of sale is

concluded. Packaging is to be marked appropriately.

B9 Inspection of goods

    The buyer must pay the costs of any pre - shipment inspection except

when such inspection is mandated by the authorities of the country of

export.

A10 Other obligations

    The seller must render the buyer at the latter's request, risk and

expense, every assistance in obtaining any documents or equivalent

electronic messages (other than those mentioned in A8) issued or transmitted

in the country of delivery and/or of origin which the buyer may require for

the import of the goods and, where necessary, for their transit through any

country.

    The seller must provide the buyer, upon request, with the necessary

information for procuring insurance.

B10 Other obligations

    The buyer must pay all costs and charges incurred in obtaining the

documents or equivalent electronic messages mentioned in A10 and reimburse

those incurred by the seller in rendering his assistance in accordance

therewith and in contracting for carriage in accordance with A3 a).

    The buyer must give the seller appropriate instructions whenever the

seller's assistance in contracting for carriage is required in accordance

with A3 a).

     FAS

FREE ALONGSIDE SHIP

(... named port of shipment)

    "Free Alongside Ship" means that the seller delivers when the goods are

placed alongside the vessel at the named port of shipment. This means that

the buyer has to bear all costs and risks of loss of or damage to the goods

from that moment.

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

    THIS IS A REVERSAL FROM PREVIOUS INCOTERMS VERSIONS WHICH REQUIRED THE

BUYER TO ARRANGE FOR EXPORT CLEARANCE.

    However, if the parties wish the buyer to clear the goods for export,

this should be made clear by adding explicit wording to this effect in the

contract of sale1.

    注1 Refer to Introduction Paragraph 11.

    This term can be used only for sea or inland waterway transport.

A THE SELLER'S OBLIGATIONS

B THE BUYER'S OBLIGATIONS

A1 Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1 Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2 Licenses, authorizations and formalities

    The seller must obtain at his own risk and expense any export licence or

other official authorization and carry out, where applicable2, all customs

formalities necessary for the export of the goods.

    注2 Refer to Introduction Paragraph 14.

B2 Licenses, authorizations and formalities

    The buyer must obtain at his own risk and expense any import licence or

other official authorization and carry out, where applicable3, all customs

formalities for the import of the goods and for their transit through any

country.

    注3 Refer to Introduction Paragraph 14.

A3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

B3 Contracts of carriage and insurance

    a) Contract of carriage

    The buyer must contract at his own expense for the carriage of the goods

from the named port of shipment.

    b) Contract of insurance

    No obligation6.

    注6 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must place the goods alongside the vessel nominated by the

buyer at the loading place named by the buyer at the named port of shipment

on the date or within the agreed period and in the manner customary at the

port.

B4 Taking delivery

    The buyer must take delivery of the goods when they have been delivered

in accordance with A4.

A5 Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have been delivered in

accordance with A4.

B5 Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods

    ● from the time they have been delivered in accordance with A4; and

    ● from the agreed date or the expiry date of the agreed period for

delivery which arise because he fails to give notice in accordance with B7,

or because the vessel nominated by him fails to arrive on time, or is unable

to take the goods, or closes for cargo earlier than the time notified in

accordance with B7, provided, however, that the goods have been duly

appropriated to the contract, that is to say, clearly set aside or otherwise

identified as the contract goods.

A6 Division of costs

    The seller must, subject to the provisions of B6, pay

    ● all costs relating to the goods until such time as they have been

delivered in accordance with A4; and

    ● where applicable7, the costs of customs formalities as well as all

duties, taxes, and other charges payable upon export.

    注7 Refer to Introduction Paragraph 14.

B6 Division of costs

    The buyer must pay

    ● all costs relating to the goods from the time they have been

delivered in accordance with A4; and

    ● any additional costs incurred, either because the vessel nominated by

him has failed to arrive on time, or is unable to take the goods, or closes

for cargo earlier than the time notified in accordance with B7, or because

the buyer has failed to give appropriate notice in accordance with B7

provided, however, that the goods have been duly appropriated to the

contract, that is to say, clearly set aside or otherwise identified as the

contract goods; and

    ● where applicable8, all duties, taxes and other charges as well as the

costs of carrying out customs formalities payable upon import of the goods

and for their transit through any country.

    注8 Refer to Introduction Paragraph 14.

A7 Notice to the buyer

    The seller must give the buyer sufficient notice that the goods have

been delivered alongside the nominated vessel.

B7 Notice to the seller

    The buyer must give the seller sufficient notice of the vessel name,

loading point and required delivery time.

A8 Proof of delivery, transport document or equivalent electronic message

    The seller must provide the buyer at the seller's expense with the usual

proof of delivery of the goods in accordance with A4.

    Unless the document referred to in the preceding paragraph is the

transport document, the seller must render the buyer at the latter's

request, risk and expense, every assistance in obtaining a transport

document (for example a negotiable bill of lading, a non - negotiable sea

waybill, an inland waterway document).

    When the seller and the buyer have agreed to communicate electronically,

the document referred to in the preceding paragraphs may be replaced by an

equivalent electronic data interchange (EDI) message.

B8  Proof of delivery, transport document or equivalent electronic message

    The buyer must accept the proof of delivery in accordance with A8.

A9  Checking - packaging - marking

    The seller must pay the costs of those checking operations (such as

checking quality, measuring, weighing, counting) which are necessary for the

purpose of delivering the goods in accordance with A4.

    The seller must provide at his own expense packaging (unless it is usual

for the particular trade to ship the goods of the contract description

unpacked) which is required for the transport of the goods, to the extent

that the circumstances relating to the transport (for example modalities,

destination) are made known to the seller before the contract of sale is

concluded. Packaging is to be marked appropriately.

B9  Inspection of goods

    The buyer must pay the costs of any pre - shipment inspection, except

when such inspection is mandated by the authorities of the country of

export.

A10  Other obligations

    The seller must render the buyer at the latter's request, risk and

expense, every assistance in obtaining any documents or equivalent

electronic messages (other than those mentioned in A8) issued or transmitted

in the country of shipment and/or of origin which the buyer may require for

the import of the goods and, where necessary, for their transit through any

country.

    The seller must provide the buyer, upon request, with the necessary

information for procuring insurance.

B10 Other obligations

    The buyer must pay all costs and charges incurred in obtaining the

documents or equivalent electronic messages mentioned in A10 and reimburse

those incurred by the seller in rendering his assistance in accordance

therewith.

     FOB

FREE ON BOARD

(... named port of shipment)

    "Free on Board" means that the seller delivers when the goods pass the

ship's rail at the named port of shipment. This means that the buyer has to

bear all costs and risks of loss of or damage to the goods from that point.

The FOB term requires the seller to clear the goods for export. This term

can be used only for sea or inland waterway transport. If the parties do not

intend to deliver the goods across the ship's rail, the FCA term should be

used.

A  THE SELLER'S OBLIGATIONS

B  THE BUYER'S OBLIGATIONS

A1  Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1  Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2  Licenses, authorizations and formalities

    The seller must obtain at his own risk and expense any export licence or

other official authorization and carry out, where applicable1, all customs

formalities necessary for the export of the goods.

    注1 Refer to Introduction Paragraph 14.

B2  Licenses, authorizations and formalities

    The buyer must obtain at his own risk and expense any import licence or

other official authorization and carry out, where applicable2, all customs

formalities for the import of the goods and, where necessary, for their

transit through any country.

    注2 Refer to Introduction Paragraph 14.

A3  Contracts of carriage and insurance

    a) Contract of carriage

    No obligation3.

    注3 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

B3  Contracts of carriage and insurance

    a) Contract of carriage

    The buyer must contract at his own expense for the carriage of the goods

from the named port of shipment.

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must deliver the goods on the date or within the agreed

period at the named port of shipment and in the manner customary at the port

on board the vessel nominated by the buyer.

B4  Taking delivery

    The buyer must take delivery of the goods when they have been delivered

in accordance with A4.

A5  Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have passed the ship's

rail at the named port of shipment.

B5  Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods

    ● from the time they have passed the ship's rail at the named port of

shipment; and

    ● from the agreed date or the expiry date of the agreed period for

delivery which arise because he fails to give notice in accordance with B7,

or because the vessel nominated by him fails to arrive on time, or is unable

to take the goods, or closes for cargo earlier than the time notified in

accordance with B7, provided, however, that the goods have been duly

appropriated to the contract, that is to say, clearly set aside or otherwise

identified as the contract goods.

A6  Division of costs

    The seller must, subject to the provisions of B6, pay

    ● all costs relating to the goods until such time as they have passed

the ship's rail at the named port of shipment; and

    ● where applicable6, the costs of customs formalities necessary for

export as well as all duties, taxes and other charges payable upon export.

    注6 Refer to Introduction Paragraph 14.

B6  Division of costs

    The buyer must pay

    ● all costs relating to the goods from the time they have passed the

ship's rail at the named port of shipment; and

    ● any additional costs incurred, either because the vessel nominated by

him fails to arrive on time, or is unable to take the goods, or closes for

cargo earlier than the time notified in accordance with B7, or because the

buyer has failed to give appropriate notice in accordance with B7, provided,

however, that the goods have been duly appropriated to the contract, that is

to say, clearly set aside or otherwise identified as the contract goods; and

    ● where applicable7, all duties, taxes and other charges as well as the

costs of carrying out customs formalities payable upon import of the goods

and for their transit through any country.

    注7 Refer to Introduction paragraph 14.

A7  Notice to the buyer

     The seller must give the buyer sufficient notice that the goods have

been delivered in accordance with A4.

B7  Notice to the seller

     The buyer must give the seller sufficient notice of the vessel name,

loading point and required delivery time. A8  Proof of delivery, transport

document or equivalent electronic message

    The seller must provide the buyer at the seller's expense with the usual

proof of delivery in accordance with A4.

    Unless the document referred to in the preceding paragraph is the

transport document, the seller must render the buyer, at the latter's

request, risk and expense, every assistance in obtaining a transport

document for the contract of carriage (for example, a negotiable bill of

lading, a non negotiable sea waybill, an inland waterway document, or a

multimodal transport document).

    Where the seller and the buyer have agreed to communicate

electronically, the document referred to in the preceding paragraph may be

replaced by an equivalent electronic data interchange (EDI) message.

B8  Proof of delivery, transport document or equivalent electronic message

    The buyer must accept the proof of delivery in accordance with A8.

A9  Checking - packaging - marking

    The seller must pay the costs of those checking operations (such as

checking quality, measuring, weighing, counting) which are necessary for the

purpose of delivering the goods in accordance with A4.

    The seller must provide at his own expense packaging (unless it is usual

for the particular trade to ship the goods of the contract description

unpacked) which is required for the transport of the goods, to the extent

that the circumstances relating to the transport (for example modalities,

destination) are made known to the seller before the contract of sale is

concluded. Packaging is to be marked appropriately.

B9  Inspection of goods

    The buyer must pay the costs of any pre-shipment inspection except when

such inspection is mandated by the authorities of the country of export.

A10  Other obligations

    The seller must render the buyer at the latter's request, risk and

expense, every assistance in obtaining any documents or equivalent

electronic messages (other than those mentioned in A8) issued or transmitted

in the country of shipment and/or of origin which the buyer may require for

the import of the goods and, where necessary, for their transit through any

country.

    The seller must provide the buyer, upon request, with the necessary

information for procuring insurance.

B10  Other obligations

    The buyer must pay all costs and charges incurred in obtaining the

documents or equivalent electronic messages mentioned in A10 and reimburse

those incurred by the seller in rendering his assistance in accordance

therewith.

     CFR

COST AND FREIGHT

(... named port of destination)

    "Cost and Freight" means that the seller delivers when the goods pass

the ship's rail in the port of shipment.

    The seller must pay the costs and freight necessary to bring the goods

to the named port of destination BUT the risk of loss of or damage to the

goods, as well as any additional costs due to events occurring after the

time of delivery, are transferred from the seller to the buyer.

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

    This term can be used only for sea and inland waterway transport. If the

parties do not intend to deliver the goods across the ship's rail, the CPT

term should be used.

A  THE SELLER'S OBLIGATIONS

B  THE BUYER'S OBLIGATIONS

A1  Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1  Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2  Licenses, authorizations and formalities

    The seller must obtain at his own risk and expense any export licence or

other official authorization and carry out, where applicable1, all customs

formalities necessary for the export of the goods.

    注1 Refer to Introduction Paragraph 14.

B2  Licenses, authorizations and formalities

    The buyer must obtain at his own risk and expense any import licence or

other official authorization and carry out, where applicable2, all customs

formalities for the import of the goods and for their transit through any

country.

    注2 Refer to Introduction Paragraph 14.

A3  Contracts of carriage and insurance

    a) Contract of carriage

    The seller must contract on usual terms at his own expense for the

carriage of the goods to the named port of destination by the usual route in

a seagoing vessel (or inland waterway vessel as the case may be) of the type

normally used for the transport of goods of the contract description.

    b) Contract of insurance

    No obligation3.

    注3 Refer to Introduction Paragraph 10.

B3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must deliver the goods on board the vessel at the port of

shipment on the date or within the agreed period.

B4 Taking delivery

    The buyer must accept delivery of the goods when they have been

delivered in accordance with A4 and receive them from the carrier at the

named port of destination.

A5 Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have passed the ship's

rail at the port of shipment.

B5 Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods from the

time they have passed the ship's rail at the port of shipment.

    The buyer must, should he fail to give notice in accordance with B7,

bear all risks of loss of or damage to the goods from the agreed date or the

expiry date of the period fixed for shipment provided, however, that the

goods have been duly appropriated to the contract, that is to say, clearly

set aside or otherwise identified as the contract goods.

A6 Division of costs

    The seller must, subject to the provisions of B6, pay

    ● all costs relating to the goods until such time as they have been

delivered in accordance with A4; and

    ● the freight and all other costs resulting from A3 a), including the

costs of loading the goods on board and any charges for unloading at the

agreed port of discharge which were for the seller's account under the

contract of carriage; and, where applicable6, the costs of customs

formalities necessary for export as well as all duties, taxes and other

charges payable upon export, and for their transit through any country if

they were for the seller's account under the contract of carriage.

    注6 Refer to Introduction Paragraph 14.

B6 Division of costs

    The buyer must, subject to the provisions of A3 a), pay

    ● all costs relating to the goods from the time they have been

delivered in accordance with A4; and

    ● all costs and charges relating to the goods whilst in transit until

their arrival at the port of destination, unless such costs and charges were

for the seller's account under the contract of carriage; and

    ● unloading costs including lighterage and wharfage charges, unless

such costs and charges were for the seller's account under the contract of

carriage; and

    ● all additional costs incurred if he fails to give notice in

accordance with B7, for the goods from the agreed date or the expiry date of

the period fixed for shipment, provided, however, that the goods have been

duly appropriated to the contract, that is to say, clearly set aside or

otherwise identified as the contract goods; and

    ● where applicable7, all duties, taxes and other charges as well as the

costs of carrying out customs formalities payable upon import of the goods

and, where necessary, for their transit through any country unless included

within the cost of the contract of carriage.

    注7 Refer to Introduction Paragraph 14.

A7 Notice to the buyer

    The seller must give the buyer sufficient notice that the goods have

been delivered in accordance with A4 as well as any other notice required in

order to allow the buyer to take measures which are normally necessary to

enable him to take the goods.

B7 Notice to the seller

    The buyer must, whenever he is entitled to determine the time for

shipping the goods and/or the port of destination, give the seller

sufficient notice thereof.

A8 Proof of delivery, transport document or equivalent electronic message

    The seller must at his own expense provide the buyer without delay with

the usual transport document for the agreed port of destination.

    This document (for example a negotiable bill of lading, a non-negotiable

sea waybill or an inland waterway document) must cover the contract goods,

be dated within the period agreed for shipment, enable the buyer to claim

the goods from the carrier at the port of destination and, unless otherwise

agreed, enable the buyer to sell the goods in transit by the transfer of the

document to a subsequent buyer (the negotiable bill of lading) or by

notification to the carrier.

    When such a transport document is issued in several originals, a full

set of originals must be presented to the buyer.

    Where the seller and the buyer have agreed to communicate

electronically, the document referred to in the preceding paragraphs may be

replaced by an equivalent electronic data interchange (EDI) message.

B8 Proof of delivery, transport document or equivalent electronic message

    The buyer must accept the transport document in accordance with A8 if it

is in conformity with the contract.

A9 Checking - packaging - marking

    The seller must pay the costs of those checking operations (such as

checking quality, measuring, weighing, counting) which are necessary for the

purpose of delivering the goods in accordance with A4.

    The seller must provide at his own expense packaging (unless it is usual

for the particular trade to ship the goods of the contract description

unpacked) which is required for the transport of the goods arranged by him.

Packaging is to be marked appropriately.

B9 Inspection of goods

    The buyer must pay the costs of any pre - shipment inspection except

when such inspection is mandated by the authorities of the country of

export.

A10 Other obligations

    The seller must render the buyer at the latter's request, risk and

expense, every assistance in obtaining any documents or equivalent

electronic messages (other than those mentioned in A8) issued or transmitted

in the country of shipment and/or of origin which the buyer may require for

the import of the goods and, where necessary, for their transit through any

country.

    The seller must provide the buyer, upon request, with the necessary

information for procuring insurance.

B10 Other obligations

    The buyer must pay all costs and charges incurred in obtaining the

documents or equivalent electronic messages mentioned in A10 and reimburse

those incurred by the seller in rendering his assistance in accordance

therewith.

     CIF

COST, INSURANCE AND FREIGHT

(... named port of destination)

    "Cost, Insurance and Freight" means that the seller delivers when the

goods pass the ship's rail in the port of shipment.

    The seller must pay the costs and freight necessary to bring the goods

to the named port of destination BUT the risk of loss of or damage to the

goods, as well as any additional costs due to events occurring after the

time of delivery, are transferred from the seller to the buyer. However, in

CIF the seller also has to procure marine insurance against the buyer's risk

of loss of or damage to the goods during the carriage.

    Consequently, the seller contracts for insurance and pays the insurance

premium. The buyer should note that under the CIF term the seller is

required to obtain insurance only on minimum cover1. Should the buyer wish

to have the protection of greater cover, he would either need to agree as

such expressly with the seller or to make his own extra insurance

arrangements.

    注1 Refer to Introduction Paragraph 9.3.

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

    This term can be used only for sea and inland waterway transport. If the

parties do not intend to deliver the goods across the ship's rail, the CIP

term should be used.

A THE SELLER'S OBLIGATIONS

B THE BUYER'S OBLIGATIONS

A1 Provision of goods in conformity with the contract

    The seller must provide the goods and the commercial invoice, or its

equivalent electronic message, in conformity with the contract of sale and

any other evidence of conformity which may be required by the contract.

B1 Payment of the price

    The buyer must pay the price as provided in the contract of sale.

A2 Licenses, authorizations and formalities

    The seller must obtain at his own risk and expense any export licence or

other official authorization and carry out, where applicable2, all customs

formalities necessary for the export of the goods.

    注2 Refer to Introduction Paragraph 14.

B2 Licenses, authorizations and formalities

    The buyer must obtain at his own risk and expense any import licence or

other official authorization and carry out, where applicable3, all customs

formalities for the import of the goods and for their transit through any

country.

    注3 Refer to Introduction Paragraph 14.

A3 Contracts of carriage and insurance

    a) Contract of carriage

    The seller must contract on usual terms at his own expense for the

carriage of the goods to the named port of destination by the usual route in

a seagoing vessel (or inland waterway vessel as the case may be) of the type

normally used for the transport of goods of the contract description.

    b) Contract of insurance

    The seller must obtain at his own expense cargo insurance as agreed in

the contract, such that the buyer, or any other person having an insurable

interest in the goods, shall be entitled to claim directly from the insurer

and provide the buyer with the insurance policy or other evidence of

insurance cover.

    The insurance shall be contracted with underwriters or an insurance

company of good repute and, failing express agreement to the contrary, be in

accordance with minimum cover of the Institute Cargo Clauses (Institute of

London Underwriters) or any similar set of clauses. The duration of

insurance cover shall be in accordance with B5 and B4. When required by the

buyer, the seller shall provide at the buyer's expense war, strikes, riots

and civil commotion risk insurance if procurable. The minimum insurance

shall cover the price provided in the contract plus ten per cent (i.e. 110%)

and shall be provided in the currency of the contract.

B3 Contracts of carriage and insurance

    a) Contract of carriage

    No obligation4.

    注4 Refer to Introduction Paragraph 10.

    b) Contract of insurance

    No obligation5.

    注5 Refer to Introduction Paragraph 10.

A4 Delivery

    The seller must deliver the goods on board the vessel at the port of

shipment on the date or within the agreed period.

B4 Taking delivery

    The buyer must accept delivery of the goods when they have been

delivered in accordance with A4 and receive them from the carrier at the

named port of destination.

A5 Transfer of risks

    The seller must, subject to the provisions of B5, bear all risks of loss

of or damage to the goods until such time as they have passed the ship's

rail at the port of shipment.

B5 Transfer of risks

    The buyer must bear all risks of loss of or damage to the goods from the

time they have passed the ship's rail at the port of shipment.

    The buyer must, should he fail to give notice in accordance with B7,

bear all risks of loss of or damage to the goods from the agreed date or the

expiry date of the period fixed for shipment provided, however, that the

goods have been duly appropriated to the contract, that is to say, clearly

set aside or otherwise identified as the contract goods.

A6 Division of costs

    The seller must, subject to the provisions of B6, pay

    ● all costs relating to the goods until such time as they have been

delivered in accordance with A4; and

    ● the freight and all other costs resulting from A3 a), including the

costs of loading the goods on board;

    ● and the costs of insurance resulting from A3 b); and

    ● any charges for unloading at the agreed port of discharge which were

for the seller's account under the contract of carriage; and

    ● where applicable6, the costs of customs formalities necessary for

export as well as all duties, taxes and other charges payable upon export,

and for their transit through any country if they were for the seller's

account under the contract of carriage.

    注6 Refer to Introduction Paragraph 14.

B6 Divisions of costs

    The buyer must, subject to the provisions of A3, pay

    ● all costs relating to the goods from the time they have been

delivered in accordance with A4; and

    ● all costs and charges relating to the goods whilst in transit until

their arrival at the port of destination, unless such costs and charges were