Incoterms 2000 incoterms 2000 incoterms or international commerce terms is a series of international sales terms that is widely used throughout the world. Some companies may still use the incoterms 2000 rules, so make sure that you and your seller are both working from the same version when entering into a contract. Pdf the link between incoterms 2000 and letter of credit. Incoterms are formulated, revised and classified by the international chamber of commerce. Incoterms 2000 are already used in countless commercial sales contracts. Acp listing incoterms 2000 as international accepted commercial terms defining roles of buyer and seller in the arrangement of transportation and other trading responsibilities exw.
Four incoterms daf, des, deq, ddu have been replaced by two new incoterms dat, dap. If fob is the customs valuation basis of the goods in the country of destination, the transportation and insurance costs from the sellers premises to the port of export must be added to the ex works price. In 2004, the model ucc dropped references to fob and cif. Free on board fob use of this rule is restricted to goods transported by sea or inland waterway. Incoterms citt webinar series this material has been prepared for citt discussion purposes only and is not intended as legal or professional advice regarding selection of fob terms or other issues affecting liability, obligations, or responsibilities, of buyers and sellers regarding the sale of goods. Free on board means that the seller delivers when the goods pass the ships rail at the named port of shipment. In the terms intended to be used exclusively for carriage of goods by seasuch as fas, fob, cfr, cif, des and deqthe expressions port of. The difference between the incoterms 2000 and the 2010 version was the. By using fob the seller must clear the goods for export and delivers when the goods pass the ships rail at the agreed port. Fob rules are used only and exclusively in maritime transport or inland waterway transport. Under the ucc version you could have fob destination, which is not.
The seller delivers when the goods pass the ships rail at the named port of shipment. The word incoterms is the abbreviation for international commercial terms and individual incoterms are delivery clause of a bill of sale not transport contract. Incoterms 2000 have been revised in line with developments in commercial practice taking into account the increased use of intermodal transport. I just read the latest issue of the chaina magazine edited by the supply chain council and i found a very nice explanation of the changes from incoterms 2000 to incoterms 2010. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. Incoterms 2000 should be incorporated into international sales contracts starting january 1, 2000. Fob free on board is one of the 11 delivery methods of incoterms 2010. This term is only used for water transportation either sea or inland water.
In 2010, the icc released 11 incoterms that included carriage and insurance paid to, carriage paid to, cost and freight, cost insurance and freight, delivered at place, delivered duty paid, delivered at terminal, ex works, free alongside ship, free carrier and free on board. Daf, des, ddu and deq as 4 delivery methods were repealed whereas dap. The terms are grouped into four basic different categories. Incoterms 2000 contains delivery methods, but this number was reduced in 2010 version from to 11. Every 10 years the international chamber of commerce icc revises the incoterms in order to correspond and adopt best practices. Fob is often negotiated into international contracts and sales agreements. The difference between the incoterms 2000 and the 2010 version was the reduction in the numbers of incoterms from to 11. Exw ex works named place the seller makes the goods available at his premises. International commercial terms incoterms the incoterms international commercial terms is a universally recognized set of definitions of international trade terms, such as fob, cfr and cif, developed by the international chamber of commerce icc in paris, france. For a more complete description of each of the incoterms, the ibt guide to incoterms 2000 book published by international business training fully and clearly defines each of the new incoterms that became effective january 1, 2000, and includes a number of case studies that demonstrate the use of the different terms in reallife situations. Incoterms 2000 have been released in september 1999 under icc publication reference number 560 and have entered into force on 1 january 2000.
Incoterms 2000 offer a simpler and clearer presentation of the definitions, all of which have been revised. Incoterms 2000 came into effect as of january 2000 and applies to any date thereafter. Always include the words incoterms 2000 in your contracts. The incoterms rules were amended in 1953, 1967, 1976, 1980, 1990, 2000, and 2010 with the ninth version incoterms. These four terms were combined into dat and dap in incoterms 2010, but remain in use by incoterms 2000 traders. The fob term requires the seller to clear the goods for export. Fob free on board named port of shipment deliver the goods on board, i. Fob free on board port of shipment incoterms 2020 explained. Incoterms 2000 incoterms 2000 international commercial terms are a series of international sales terms, published by international chamber of commerce icc and widely used in international commercial transactions.
The first work published by the icc on international trade terms was issued in 1923, with the first edition known as incoterms published in 1936. In practice it should be used for situations where the seller has direct access to the vessel for loading, e. The named terminal in dat maywell be in a port, and dat. Incoterms code fas fob cfr cif des deq exw fca cpt cip daf ddu a ddp l l m o d e s o f t r a n s p o r t s e a a n d i n l a n d w a t e r w a y t r a n s p o r t free alongside ship. Yo still can use these rules but be careful to mentio the version and exact place of delivery.
Thats the difference from incoterms 2000, where fob was also used for container transport. When a seller and buyer wish to cite incoterms as applying to the contract of sale, it is important to cite the term used, title, and date applicable as there have been numerous amendments, eg. Termeni incoterms 2000 exw, fca, fas, fob, cfr, cif, cpt. They are published by the international chamber of commerce icc and are widely used in commercial transactions. An overview incoterms incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts. The passing of risk occurs when the goods have been delivered to the quay at the port of shipment.
Free alongside ship fas the seller transports the goods. Ask for a free evaluation of the online course, without obligation. Incoterms 2000 provides a set of international rules, published by the international chamber of commerce icc effective 1 january 2000, for the interpretation of the most commonly. Incoterms 2000 takes account of the increased use of intermodal. Incoterms and one of the most used delivery methods of. Regardless of the incoterms in use, the seller must supply the goods as agreed in. The new rules make the incoterms 2000 rules des and deq superfluous. Paid ddp, free alongside ship fas, and free on board fob, the named place is the place where delivery takes place and where risk passes from the seller to the buyer. Incoterms explained international commercial terms incoterms or international commercial terms first created in 1936 by the international chamber of commerce, incoterms are uniform, internationally recognized foreign trade terms that refer to the type of agreement for the purchase and shipping of goods internationally. Incoterms are contractual terms, the incorporation of which in sales contracts usefully complements the provisions of the. Regardless of the incoterms in use, the seller must supply. The broad expertise of iccs 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. 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. This brochure is our summary of the contents of the trade terms.
Download this chart as a pdf heres how these incoterms come into play. The incoterms faqs about the basics why incoterms. The link between incoterms 2000 and letter of credit documentation requirement and payment risk article pdf available january 2006 with 2,869 reads how we measure reads. Ex works title and risk pass to buyer including payment of all. They are used to divide transaction costs and responsibilities between buyer and.