1INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000 - In contextINCOTERMS 2000 - In contextINCOTERMS 2000 - In contextINCOTERMS 2000 - In context
ICC IcelandICC Iceland
Legal Director Søren TheilgaardLegal Director Søren Theilgaard
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 2
INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000
Welcome and IntroductionWelcome and Introduction 55
Presentation of INCOTERMSPresentation of INCOTERMS 2525
INCOTERMS and Contract of CarriageINCOTERMS and Contract of Carriage 2020
INCOTERMS, Delivery and PaymentINCOTERMS, Delivery and Payment 2020
INCOTERMS and InsuranceINCOTERMS and Insurance 1515
Problem areas in INCOTERMS 2000Problem areas in INCOTERMS 2000 6060
Questions and AnswersQuestions and Answers 1010
ClosingClosing
3INCOTERMS 2000 - Søren Theilgaard24 March 2004
PRESENTATION OF INCOTERMSPRESENTATION OF INCOTERMSPRESENTATION OF INCOTERMSPRESENTATION OF INCOTERMS
Supplement to Sale-Purchase Agreement
Record of international customs and usage
1. version 1936. Updates 1953 - 1980 - 1990
What is new in INCOTERMS 2000
History - What is INCOTERMSHistory - What is INCOTERMS
No obligation - Where applicableNo obligation - Where applicable
13 Clauses and 4 categories13 Clauses and 4 categories
10 obligations10 obligations
Variants of INCOTERMSVariants of INCOTERMS
4INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
What is new ?What is new ?
INCOTERMS 2000INCOTERMS 2000
What is new ?What is new ?
EXPORT / IMPORT CLEARANCE IN ONES OWN EXPORT / IMPORT CLEARANCE IN ONES OWN
COUNTRYCOUNTRY
- NOW ALSO FAS OG DEQ
LOADING ON AND UNLOADING FROM VEHICLELOADING ON AND UNLOADING FROM VEHICLE
- FCA: At Seller’s premises Seller must load
At terminal carrier must unload
- DAF:
- DDU: Goods arriving at destination without
- DDP: being unloaded from vehicle
5INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
What is new ?What is new ?
INCOTERMS 2000INCOTERMS 2000
What is new ?What is new ?
FCA - CLAUSE HAS BEEN SIMPLIFIED AGAINFCA - CLAUSE HAS BEEN SIMPLIFIED AGAIN
- No distinction between different means of
transportation, full container load or consolidated
goods
GREATER CONSISTENCY IN TERMINOLOGYGREATER CONSISTENCY IN TERMINOLOGY
More places indicate: NO OBLIGATIONMore places indicate: NO OBLIGATION
6INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
What is newWhat is new ? ?
INCOTERMS 2000INCOTERMS 2000
What is newWhat is new ? ?
EXPORT / IMPORT CLEARANCE:EXPORT / IMPORT CLEARANCE:
- Only WHERE REQUIRED
CFR/CIF A8 - CHARTER PARTIESCFR/CIF A8 - CHARTER PARTIES
- Unlike Incoterms 1990 no requirement that the
Charter Party must be presented when transport document
refers to the Charter Party
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 7
INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000
44 CATEGORIESCATEGORIES
Group EGroup E Departure DepartureEXWEXW
Group FGroup F Main carriage unpaid Main carriage unpaidFCAFCA - - FASFAS - - FOBFOB
Group CGroup C Main carriage paid Main carriage paidCFRCFR - - CIFCIF - - CPTCPT - - CIPCIP
Group DGroup D Arrival ArrivalDAF - DAF - DESDES - - DEQDEQ - - DDUDDU - DDP - DDP
< 1953< 1953 19671967 19801980 19901990
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 8
INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000
MODE OF TRANSPORT AND THE APPROPRIATE MODE OF TRANSPORT AND THE APPROPRIATE INCOTERM 2000 INCOTERM 2000 Any mode of transportAny mode of transport
Group EGroup E EXWEXW
Group FGroup F FCAFCA
Group CGroup C CPTCPT - CIP - CIP
Group DGroup D DAFDAF - DDU - DDP - DDU - DDP
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 9
INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000INCOTERMS 2000
MODE OF TRANSPORT AND THE APPROPRIATE MODE OF TRANSPORT AND THE APPROPRIATE INCOTERM 2000INCOTERM 2000
Maritime transport onlyMaritime transport only
Group FGroup F FAS - FOBFAS - FOB
Group CGroup C CFR - CIFCFR - CIF
Group DGroup D DES - DEQDES - DEQ
- or in combination with a different mode of - or in combination with a different mode of transporttransport
10INCOTERMS 2000 - Søren Theilgaard24 March 2004
10 MIRRORED OBLIGATIONS10 MIRRORED OBLIGATIONS10 MIRRORED OBLIGATIONS10 MIRRORED OBLIGATIONS
1)1) PROVIDE GOODS - PAYMENT OF PRICEPROVIDE GOODS - PAYMENT OF PRICE
2) 2) LICENSES, AUTHORIZATIONS AND FORMALITIESLICENSES, AUTHORIZATIONS AND FORMALITIES
3)3) CONTRACT OF CARRIAGE AND INSURANCECONTRACT OF CARRIAGE AND INSURANCE
4) 4) DELIVERY - TAKING DELIVERYDELIVERY - TAKING DELIVERY
5)5) TRANSFER OF RISKSTRANSFER OF RISKS
6)6) DIVISION OF COSTSDIVISION OF COSTS
7)7) NOTICE TO BUYER AND SELLERNOTICE TO BUYER AND SELLER
8)8) PROOF OF DELIVERY, TRANSPORT DOCUMENT OR PROOF OF DELIVERY, TRANSPORT DOCUMENT OR
EQUIVALENT ELECTRONIC MESSAGE - EDIEQUIVALENT ELECTRONIC MESSAGE - EDI
9)9) INSPECTION OF GOODS, PACKAGING AND MARKING INSPECTION OF GOODS, PACKAGING AND MARKING
10)10) OTHER OBLIGATIONSOTHER OBLIGATIONS
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 11
INCOTERMS 2000INCOTERMS 2000
Welcome and IntroductionWelcome and Introduction Presentation of INCOTERMSPresentation of INCOTERMS INCOTERMS and Contract of CarriageINCOTERMS and Contract of Carriage INCOTERMS, Delivery and PaymentINCOTERMS, Delivery and Payment INCOTERMS and InsuranceINCOTERMS and Insurance Problem areas in INCOTERMS 2000Problem areas in INCOTERMS 2000 Questions and AnswersQuestions and Answers ClosingClosing
12INCOTERMS 2000 - Søren Theilgaard24 March 2004
CONTRACT OF CARRIAGECONTRACT OF CARRIAGE
Rules regulating international transportation:Rules regulating international transportation: Road - CMR Geneva Convention 1956Road - CMR Geneva Convention 1956
Rail - COTIF Berne Convention + CIMRail - COTIF Berne Convention + CIM
Air - Warszaw and Montreal Convention)Air - Warszaw and Montreal Convention)
Marine - Merchant Shipping Act Marine - Merchant Shipping Act Carriage of Goods by Sea (Haag-Visby Carriage of Goods by Sea (Haag-Visby and Hamburg Rules) and Hamburg Rules)
Freight Forwarder - NSAB 2000Freight Forwarder - NSAB 2000
13INCOTERMS 2000 - Søren Theilgaard24 March 2004
CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY
LiabilityLiability Road:Road: ControlControl
Rail:Rail: Act of GodAct of God
Air Way:Air Way: Act of God Act of God
delay delay - Burden of proof- Burden of proof
Marine:Marine: Negligence - reverse burden of Negligence - reverse burden of proofproof
Freight Forwarder:Freight Forwarder: ControlControl
14INCOTERMS 2000 - Søren Theilgaard24 March 2004
CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY
Limit to liabilityLimit to liability Road:Road: 8,33 SDR pr. kilo8,33 SDR pr. kilo
Rail:Rail: 17 SDR pr. kilo17 SDR pr. kilo
Air Way:Air Way: 17 SDR pr. kilo17 SDR pr. kilo
Marine:Marine: 667 SDR pr. kollo667 SDR pr. kolloor 2 SDR pr. kiloor 2 SDR pr. kilo
Freight Forwarder:Freight Forwarder: 8,33 SDR pr. kilo 8,33 SDR pr. kilo
1 SDR = app. 1.20 EURO1 SDR = app. 1.20 EURO
15INCOTERMS 2000 - Søren Theilgaard24 March 2004
CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY CARRIER’S LIABILITY
Limit to loss in case of delayLimit to loss in case of delay Road:Road: freight freight
Rail:Rail: 3 x freight 3 x freight
Air Way:Air Way: 17 SDR pr. kilo17 SDR pr. kilo
Marine:Marine: 2½ x freight 2½ x freight
Freight Forwarder:Freight Forwarder: freight freight
16INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS INCOTERMS
and CONTRACT OF CARRIAGEand CONTRACT OF CARRIAGE
CARRIERCARRIER
Receives Goods from SellerReceives Goods from Seller
Issues Transport DocumentIssues Transport Document
Responsible for the Goods during Responsible for the Goods during
transportation transportation
Hands over Goods to Consignee / Hands over Goods to Consignee /
Purchaser Purchaser
17INCOTERMS 2000 - Søren Theilgaard24 March 2004
CONTRACT OF CARRIAGE CONTRACT OF CARRIAGE
3 Functions3 Functions
Receipt for the Goods
Contract for carriage of the goods
Authority to hand over the goods
Freight receipt - Sea Waybill / Non negotiableFreight receipt - Sea Waybill / Non negotiable
Bill of LadingBill of Lading
CharterpartyCharterparty
18INCOTERMS 2000 - Søren Theilgaard24 March 2004
CONTRACT OF CARRIAGE CONTRACT OF CARRIAGE
In accordance with Sales ContractIn accordance with Sales Contract
Division of costs
Risk - Interest
Liner Terms or Tramp Terms
Cargo InsuranceCargo Insurance
Basis for payment through Documentary CreditBasis for payment through Documentary Credit
Contracting or performing carrierContracting or performing carrier
19INCOTERMS 2000 - Søren Theilgaard24 March 2004
COSTS COSTS COSTS COSTS
In accordance with Sales ContractIn accordance with Sales Contract
INCOTERMS Item A.6 and B.6.INCOTERMS Item A.6 and B.6. Passing upon delivery exemption: C-Clauses
In accordance with Contract of CarriageIn accordance with Contract of Carriage
In particular loading costs
Transit costs
Terminal Handling Costs
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 20
INCOTERMS 2000INCOTERMS 2000
Welcome and IntroductionWelcome and Introduction Presentation of INCOTERMSPresentation of INCOTERMS INCOTERMS and Contract of CarriageINCOTERMS and Contract of Carriage INCOTERMS, Delivery and PaymentINCOTERMS, Delivery and Payment INCOTERMS and InsuranceINCOTERMS and Insurance Problem areas in INCOTERMS 2000Problem areas in INCOTERMS 2000 Questions and AnswersQuestions and Answers ClosingClosing
21INCOTERMS 2000 - Søren Theilgaard24 March 2004
DELIVERYDELIVERYDELIVERYDELIVERY
What is deliveryWhat is delivery
Consequences of deliveryConsequences of delivery
What happens is delivery does not occurWhat happens is delivery does not occurpassing of risk - A5 / B5costs - A6 / B6
Where does delivery occur - INCOTERMS A4Where does delivery occur - INCOTERMS A4
Choice of INCOTERM Clause has an impact on delivery, Choice of INCOTERM Clause has an impact on delivery,
passing of risk and costspassing of risk and costs
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 22
DELIVERYDELIVERYDELIVERYDELIVERY
EXWDES - D
EQ
DAF
||| |
FAS - FOB
CFR - CIF
|
DDU
|
DDP
|
FCA - CPT - C
IP
Marine transportMarine transport
DepartureDeparture ArrivalArrival
Seller’splace
Buyer’splace
BorderBorderCarrierCarrier
23INCOTERMS 2000 - Søren Theilgaard24 March 2004
PAYMENTPAYMENTPAYMENTPAYMENT
WHEN MUST PAYMENT BE MADEWHEN MUST PAYMENT BE MADE
WHERE MUST PAYMENT BE MADEWHERE MUST PAYMENT BE MADE
PAYMENT IF GOODS ARE NOT RECEIVEDPAYMENT IF GOODS ARE NOT RECEIVED
INSURANCE MAY REPLACE PAYMENTINSURANCE MAY REPLACE PAYMENT Cargo Insurance Credit Insurance Documentary Credit
WHEN MUST PAYMENT BE MADEWHEN MUST PAYMENT BE MADE
WHERE MUST PAYMENT BE MADEWHERE MUST PAYMENT BE MADE
PAYMENT IF GOODS ARE NOT RECEIVEDPAYMENT IF GOODS ARE NOT RECEIVED
INSURANCE MAY REPLACE PAYMENTINSURANCE MAY REPLACE PAYMENT Cargo Insurance Credit Insurance Documentary Credit
24INCOTERMS 2000 - Søren Theilgaard24 March 2004
PAYMENTPAYMENTPAYMENTPAYMENT
When must payment be made ?When must payment be made ? CISG Art. 58CISG Art. 58
(1) If the buyer is not bound to pay the price at any other specific time he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and this Convention. The seller may make such payment a condition for handing over the goods or documents.
- Cf. however CISG Art. 57 (1) - Payment when - Cf. however CISG Art. 57 (1) - Payment when documents are handed over to buyer.documents are handed over to buyer.
25INCOTERMS 2000 - Søren Theilgaard24 March 2004
PAYMENTPAYMENTPAYMENTPAYMENT
When must payment be made ?When must payment be made ? CISG Art. 58CISG Art. 58
(2) If the contract involves carriage of the goods, the seller may dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against payment of the price.
(3) The buyer is not bound to pay the price until he has had an opportunity to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are inconsistent with his having such an opportunity.
- E.g. Cash against Documents or FOB / CIF INCOTERMS 2000- E.g. Cash against Documents or FOB / CIF INCOTERMS 2000
26INCOTERMS 2000 - Søren Theilgaard24 March 2004
PAYMENTPAYMENTPAYMENTPAYMENT
Where must payment be made ?Where must payment be made ? CISG Art. 57CISG Art. 57
(1) If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller:
(a) at the seller's place of business; or
(b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place..
Payment against documentsPayment against documents- Where and when documents are presented ..
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 27
CISG LANDECISG LANDE
CISG landeCISG lande
Ikke CISG landeIkke CISG lande
28INCOTERMS 2000 - Søren Theilgaard24 March 2004
PAYMENT AGAINST DOCUMENTSPAYMENT AGAINST DOCUMENTSPAYMENT AGAINST DOCUMENTSPAYMENT AGAINST DOCUMENTS
Which documents Which documents
Certainty that agreed documents are preparedCertainty that agreed documents are prepared
Payment before Delivery / Passing of RiskPayment before Delivery / Passing of Risk
Seller’s comfortSeller’s comfort
Buyer’s comfortBuyer’s comfort
No guarantee that payment is made / only retention rightNo guarantee that payment is made / only retention right
Which documents Which documents
Certainty that agreed documents are preparedCertainty that agreed documents are prepared
Payment before Delivery / Passing of RiskPayment before Delivery / Passing of Risk
Seller’s comfortSeller’s comfort
Buyer’s comfortBuyer’s comfort
No guarantee that payment is made / only retention rightNo guarantee that payment is made / only retention right
29INCOTERMS 2000 - Søren Theilgaard24 March 2004
LETTER OF CREDITLETTER OF CREDITLETTER OF CREDITLETTER OF CREDIT
Agreement on payment guarantee and terms of Agreement on payment guarantee and terms of
paymentpayment
Agreement between buyer and issuing bankAgreement between buyer and issuing bank
Honouring bank - Confirmed L/CHonouring bank - Confirmed L/C
Satisfying Documentary Credit conditionsSatisfying Documentary Credit conditions
L/C Rules between banks / ICC 500L/C Rules between banks / ICC 500
Agreement on payment guarantee and terms of Agreement on payment guarantee and terms of
paymentpayment
Agreement between buyer and issuing bankAgreement between buyer and issuing bank
Honouring bank - Confirmed L/CHonouring bank - Confirmed L/C
Satisfying Documentary Credit conditionsSatisfying Documentary Credit conditions
L/C Rules between banks / ICC 500L/C Rules between banks / ICC 500
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 30
INCOTERMS 2000INCOTERMS 2000
Welcome and IntroductionWelcome and Introduction Presentation of INCOTERMSPresentation of INCOTERMS INCOTERMS and Contract of CarriageINCOTERMS and Contract of Carriage INCOTERMS, Delivery and PaymentINCOTERMS, Delivery and Payment INCOTERMS and InsuranceINCOTERMS and Insurance Problem areas in INCOTERMS 2000Problem areas in INCOTERMS 2000 Questions and AnswersQuestions and Answers ClosingClosing
31INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCE
Insurance for own interest / Who is at risk ?Insurance for own interest / Who is at risk ?
Seller insuring buyer’s riskSeller insuring buyer’s risk
CIF / CIP:CIF / CIP: from delivery to destinationcontract price + 10%
minimum conditions
direct claim against insurance company
Additional insurance required Additional insurance required theft, jettison, water damage, strikes, wartheft, jettison, water damage, strikes, warhigher insurance sum, redestination, higher insurance sum, redestination, subsequent transportation, sale in transit subsequent transportation, sale in transit
32INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCE
Institute Cargo Clauses CInstitute Cargo Clauses C
Covers named eventsCovers named events
Institute Cargo Clauses AInstitute Cargo Clauses A
All risk insurance exceptAll risk insurance except
- strikes, war, inherent vice, deficiency in packaging, ordinary leakage, delay
Certain events are not insurableCertain events are not insurable
Who carries the risk for the goods ?Who carries the risk for the goods ?
33INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCEINCOTERMS and INSURANCE
Insurance InterestInsurance Interest
Who carries the risk for the goods ?Who carries the risk for the goods ?
Insurance of subsequent interestInsurance of subsequent interest
Sale of goods in transitSale of goods in transit
Claim against insurerClaim against insurer
Who carries insurance interestWho carries insurance interest
Assignment of insurance interestAssignment of insurance interest
Recourse against carrierRecourse against carrier
24 March 2004 INCOTERMS 2000 - Søren Theilgaard 34
INCOTERMS 2000INCOTERMS 2000
Welcome and IntroductionWelcome and Introduction Presentation of INCOTERMSPresentation of INCOTERMS INCOTERMS and Contract of CarriageINCOTERMS and Contract of Carriage INCOTERMS, Delivery and PaymentINCOTERMS, Delivery and Payment INCOTERMS and InsuranceINCOTERMS and Insurance Problem areas in INCOTERMS 2000Problem areas in INCOTERMS 2000 Questions and AnswersQuestions and Answers ClosingClosing
35INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
Problem AreasProblem Areas
Frequently Asked QuestionsFrequently Asked Questions
36INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Delivery upon loading on / unloading from carrier’s vehicle.Delivery upon loading on / unloading from carrier’s vehicle.
- must loading/unloading be completed for delivery to happen ?- must loading/unloading be completed for delivery to happen ?
- who pays the cost and carries risk of loading / unloading ?- who pays the cost and carries risk of loading / unloading ?
EXW - Not loaded on collecting vehicle arrival
FCA - Loaded on vehicle at Seller’s place, but not unloaded at carrier’s
place
DAF - not unloaded at border
DDU/
DDP - not unloaded at place of destination
NB difference between FCA and FAS:NB difference between FCA and FAS:
FAS - Delivery only when goods are placed on quay alongside
vessel
37INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
When delivery is effected without loading (EXW) or unloading When delivery is effected without loading (EXW) or unloading
(FCA), what is the legal effect of Seller assists Buyer to do so ?(FCA), what is the legal effect of Seller assists Buyer to do so ?
- Reimbursement of costs ?
- Risk ?
- Is delivery postponed until loading / unloading is completed ?
Similarly in DAF, DDU and DDP when carrier assists in unloading.
What is the meaning of EXW loaded / FCA unloaded ?What is the meaning of EXW loaded / FCA unloaded ?
- Does not intend to change the passing of risk
38INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
FCA - Delivery when carrier arrives at Seller’s place with a FCA - Delivery when carrier arrives at Seller’s place with a
container instead of a truck. Is Seller obliged to stowe goods container instead of a truck. Is Seller obliged to stowe goods
in container ?in container ?
Yes, if carrier so requests and it is not unusual (cf. Seller
must load on carrier’s collecting vehicle)
Does Seller not wish to assume that obligation he should
have contracted EXW.
39INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Terminal Handling Charges - FCATerminal Handling Charges - FCA Export clearance - Seller’s cost
Cost of carriage, Warehouse storage after buyer’s receipt of goods
- Buyer’s cost
Wharfage and Airport charges - Not export taxes that Seller must
pay. Depends on whether charge is triggered before or after
delivery.
Air transport security fee - similar
- Possible clause- Possible clause THC for Seller’s expense
Customs and practice between parties may shift THC
40INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ Terminal Handling Charges - FOBTerminal Handling Charges - FOB
Seller’s cost until delivery when goods pass ship’s rail
Similarly according to FAS until ”alongside ship” (on quay or in
barge)
If Seller wishes to avoid costs in port of shipment he must choose
FCA
Costs relating to marine transportation, including quay charges and
transshipment in subsequent port must always be paid by Buyer.
Terminal Handling Charges for container loadTerminal Handling Charges for container load Seller has effectively done what he is supposed to do when
container has been loaded, whereas delivery and division of costs
and risk does not occur until goods pass ship’s rail.
- Not appropriate - Choose FCA instead.
41INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
FOB - What is ship’s rail ?FOB - What is ship’s rail ?
Shall be understood literally - subject to interpretation
FOB - Passing of Risk in case of transshipmentFOB - Passing of Risk in case of transshipment
FOB Helsingborg, transshipment to Ocean Vessel in Hamburg.
Delivery and Passing of Risk at Helsingborg.
FOB - Pre Transportation ?FOB - Pre Transportation ?
FOB Helsingborg. Truck to Hamburg.
- Wrong use of FOB Incoterms.
FOB Airport destination Japan ?FOB Airport destination Japan ?
Air forwarder receives goods at Danish airport, carries goods
to Frankfurt. Accident on the road. Who carries risk ?
- Not an approved Incoterms.
42INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
FOB - Does Seller have the obligation to ensure thatFOB - Does Seller have the obligation to ensure that
Goods are Stowed / Trimmed ?Goods are Stowed / Trimmed ? Only where agreed to - (Handling after delivery)
FOB Rotterdam Incoterms 2000 Stowed and Trimmed is
merely a cost clause and does not change delivery or
passing of risk.
43INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Place of Delivery ?Place of Delivery ?
Seller’s place or when Seller is handing over the goods:
At Seller’s: EXW At Carrier’s: FCA, FAS, FOB, CFR, CIF, CPT, CIP
Buyer’s place or Buyer’s carrier:
Port of
Destination: DES, DEQ At Border: DAF At Buyer’s: DDU, DDP
Specifying point at the named place of delivery ?Specifying point at the named place of delivery ?
Seller’s interest. We pays costs and carries risk until that
point. - Right to elect point within named place.
44INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Place of delivery in EXW-ClausePlace of delivery in EXW-Clause
EXW agreed, but Seller contracts on behalf of Buyer for transportation
and insurance and invoices EXW-price + freight and insurance. Invoice
reads: CIF Port of destination. Freight and insurance prepaid.
Are the two Clauses identical ?
- Cost and freight ?
- Risk ?
EXW Amsterdam, to be shipped to Buyer’s address Sacramento CA
arrival 20 April 2004.
Where does delivery take place ?
- Cost / Risk ?
- Delay ?
45INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Place of delivery in C-ClausesPlace of delivery in C-Clauses
CIP Johannesburg by air from Frankfurt. Goods are lost after storage
with Air Carrier in Johannesburg before handed over to buyer.
Where must the goods be delivered ?
- Johannesburg Airport ?
- At Buyer’s in Johannesburg area ? (Choice of destination) Who carries risk for the loss in Johannesburg ? Where does delivery take place ?
CIP Durban (SA) or DDU Durban (SA).
Costs until place of destination ?
- Buyer pays transit costs and possible unloading costs
according to CIP ?
Place of delivery and passing of risk ?
46INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Place of delivery in D-ClausesPlace of delivery in D-Clauses
DDU Buyer’s place by air from New York to Paris. Buyer has 3
different places of business in France, which is reported to Seller only
after contract is executed.
Where must goods be handed over ?
- Paris Airport ?
- With Buyer in France, 1 point or 3 different points ?
- Costs by delivering 3 places instead of 1 ? Who carries risk of goods being lost in Paris ? Where does delivery take place ?
DDP Hong Kong by Air.
Delivery at air carrier’s warehouse or at buyer’s ? (Choice of
place of delivery)
47INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Eksport ClearanceEksport Clearance Seller, except in EXW
Import ClearanceImport Clearance Buyer, except in DDP
Transit ClearanceTransit Clearance Seller until delivery, thereafter Buyer.
Costs in transit, including permissions in C-Clauses must also
be paid by Buyer, cf. Item B6, 2.part.
- unless transit costs are included in the cost of carriage that
Seller shall pay.
48INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Passing of Property in Scandinavian LawPassing of Property in Scandinavian Law Protection against Seller’s creditors when contract has been
made and the goods have been duly appropriated to buyer.
- Swedish Law: - goods have arrived in Buyer’s possession
Protection against Buyer’s creditor when goods have arrived
in Buyer’s possession
Not important whether or not goods have been delivered or
who carries the risk.
Not settled in INCOTERMSNot settled in INCOTERMS
Other jurisdictions may view this issue differentlyOther jurisdictions may view this issue differently Matter of contract.
Subject to bankruptcy rules.
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INCOTERMS 2000INCOTERMS 2000
FAQFAQ
CFR - Loading- and unloading costsCFR - Loading- and unloading costs
Seller pays loading costs.
Unloading costs ? - see B6, 3.part
costs of loading, including lighterage and wharfage
charges, unless such costs and charges were for the
Seller’s account under the contract of carriage;
”Liner Terms” imply that the vessel takes care of both loading
and unloading and is reimbursed therefore as part of the cost
of carriage.
”Tramp Terms” or specific agreement of ”free in/free out”
implies that the carrier does not take care of loading and/or
unloading as part of the cost of carriage, e.g.
- Seller pays for loading
- Buyer pays for unloading
50INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
Unloading costs in D-ClausesUnloading costs in D-Clauses
DAF, DDU and DDP Buyer pays unloading
costs at destination
DES Buyer pays unloading costs
DEQ Seller pays unloading costs
(Seller pays transit costs until this place)
51INCOTERMS 2000 - Søren Theilgaard24 March 2004
INCOTERMS 2000INCOTERMS 2000
FAQFAQ
WharfageWharfage
The charges paid to the port by the vessel for berthing and laytime at
quay. Port of departure
- FAS and FOB Buyer- CFR, CIF, DES and DEQ Seller- FCA transport by sea Buyer- Other C- and D-Clauses by sea Seller until named place
Port of destination- FAS and FOB Buyer- CFR, CIF Seller, if wharfage is part of the cost of carriage, otherwise Buyer - DES og DEQ Seller- FCA transport by sea Buyer- Other C- and D-Clauses by sea Seller until named place
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FAQFAQ
CIF - What is the meaning of CIF-Landed ?CIF - What is the meaning of CIF-Landed ?
Not an authentic Incoterms Clause.
May imply that Seller must contract vessel on Liner Terms.
May imply that the parties intended to contract according to the
DEQ Clause.
CIF - Duties and taxes (except export)CIF - Duties and taxes (except export) Buyer’s costs since they are not part of the cost of carriage.
CIP - Named place Dallas, delivery CopenhagenCIP - Named place Dallas, delivery Copenhagen Sea transport to Houston, unloading and transshipment to haulage
by vehicle to Dallas.
- Irrespective how contract is made with Carrier Seller must
pay unloading costs since this part of the costs accrue before
named place (Dallas).
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FAQFAQ
CFR - Delivery and contract of carriageCFR - Delivery and contract of carriage
- CFR Rotterdam, shipment from New York. Seller instructs carrier to
unload at Le Havre to haul goods by land to Rotterdam.
Is carrier entitled to change place of discharge ?
What happens if goods do not arrive on time in Rotterdam.
Additional costs by transshipment at Le Havre and land transport.
Risk of damage during land transportation.
CFR - Risk attached to the goods ?CFR - Risk attached to the goods ? Buyer claims that goods are not according to contract by arrival but
transport documents have no note that this should be the case upon
delivery.
- Clam against Seller or Carrier ?
- Cashing documents (Documentary Credit)
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FAQFAQ CIF - Damage during transportationCIF - Damage during transportation
Covered by insurance. Seller delivers again for own account and
reports damage to insurance company.
Carrier responsible for the damage.
- Insurance claim
- Insurance company recourse
- Carrier responsibility
Relationship between Seller and Buyer
- Insurance control
CIF - Defect before passing of risk - Buyer rescinds contractCIF - Defect before passing of risk - Buyer rescinds contract Purchase price already paid ? (Documentary Credit)
Who ”owns” the goods ?
Who must tend to the goods ? Return / Auction Sale
55INCOTERMS 2000 - Søren Theilgaard24 March 2004
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FAQFAQ
DDU - CostsDDU - Costs
Seller pays” all costs relating to the goods until such time as they have been delivered in
accordance with A4; and
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 prior
to delivery in accordance with A4.”
Health certificate in port of destination ? Seller pays until delivery. Wharfage ? Seller Returning Seller’s packing material (pallets, container) - Buyer must pay
his own costs to empty pallets / container
Buyer pays
”costs of customs formalities as well as all duties, taxes and other charges
payable upon import of the goods.”
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SLUT