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Incoterms

This is an English expression meaning international trade terms. Incoterms are the result of a codification of the terms of a commercial transaction set up by the International Chamber of Commerce. In French "CIV": international conditions of sale.

The delivery conditions are codified by three alphabetical characters followed by the name of the city mentioned in the contract. Incoterms define the obligations of the seller and the buyer during an international transaction..

The purpose of Incoterms is to provide a series of international rules for the interpretation of the most commonly used commercial terms in foreign trade. Incoterms only cover the rights and obligations of the parties to a sales contract, with regard to the delivery of the goods sold.

Incoterms for transport by sea and inland waterways

• FAS or Free Alongside Ship: The seller pays the transport costs to the port of shipment. The goods are delivered alongside the ship at the port of shipment. Export formalities are the responsibility of the seller. The buyer bears the loading costs, maritime transport, unloading and transport costs from the port of destination to its factory. The transfer of risks is materialized when the goods have been handed over to the quay of the port of shipment.
• FOB or Free On Board: the goods are delivered customs cleared on the ship designated by the buyer.
• CFR or Cost and Freight: The seller bears the costs of transport to the port of destination, loading and sea transport. The transfer of risk occurs when the goods are loaded on board the vessel at the port of shipment. The buyer must pay the costs of insurance and transport from the port of destination to the place of delivery.
• CIF or Cost, Insurance and Freight: The seller bears the shipping costs and insurance costs.

Incoterms for multimodal transport

• DES or Delivered Ex Ship (Delivered ex-ship… named port of destination): The seller bears the risks and costs of the main transport. The goods are delivered when they are placed at the disposal of the buyer on board the vessel at the named port of destination. The goods are not yet cleared for import.
• DEQ or Delivered Ex Quay (Delivered at the quay… named destination port): This is the same Incoterm as DES, the difference is only related to the transfer of risks. Thus, this is effective when the goods have been unloaded at the port of destination. It is important not to forget to mention the place of passage of responsibility.

Incoterms usable for all types of transport

• EXW or Ex-Works (at the factory): the goods are available at the seller's premises on a fixed date. The buyer pays for and chooses the transport. He also bears the risks up to the final destination of the goods. Export formalities are also his responsibility. He pays customs fees.
• FCA or Free Carrier: The seller delivers the goods to the carrier designated and paid by the buyer. The transfer of risks is materialized during this operation. Export formalities and customs fees are the responsibility of the seller.
• CPT or Carriage Paid To: The seller bears the costs of maritime transport to the port of destination. The transfer of risk is established when the goods are placed at the disposal of the first carrier. Thus, the insurance costs are the responsibility of the buyer.
• 
CIP or Carriage and Insurance Paid To: The conditions are the same as for CPT. The seller must provide insurance covering for the buyer, the risk of loss or damage that the goods may incur during transport.
• DDU means Delivered Duty Unpaid: The seller bears all costs related to transport. He also bears all risks until the goods have arrived at their destination but not unloaded. Generally, the payment of taxes is made by the buyer.
• DDP or Delivered Duty Paid: The seller shall bear all costs related to transport. He shall also bear all risks until the goods are unloaded. He shall also pay all duties and taxes.

Incoterms specific to land transport

• DAF or Delivered At Frontier: The seller bears the risks and costs of the main transport (by road or rail). The goods are delivered when they are placed at the buyer's disposal at the agreed border point. The goods are not unloaded or cleared for import. These costs are borne by the buyer.