Incoterms® 2010 A Special Presentation by The Louisiana District Export Council and the U. S....

Incoterms® 2010

A Special Presentation by

The Louisiana District Export Council and the U. S. Export Assistance Center of New

Orleans 1

Incoterms® 2010Presented by:

Bill Cummins

Executive Director

Global Trade Services

J. P. Morgan Chase

2

Who publishes and copyrights Incoterms®?

31 2 3

14%

86%

0%

1. The World Trade Organization

2. The Interstate Commerce Commission

3. The International Chamber of Commerce

Incoterms® address the legal transfer of title for goods.

41 2

43%

57%1. True

2. False

Incoterms can be used for the transfer of both goods and

services?

5

1 2

30%

70%

1. True.

2. False.

How excited are you to be learning about Incoterms 2010?

61 2 3 4

33%

11%

22%

33%

1. Very Excited!

2. Somewhat excited.

3. Just glad to be out of the office.

4. My boss made me do it.

Incoterms® 2010

In today’s presentation, we will address --

The International Chamber of Commerce and its role in international trade.

The significance of the new shipping terms. What the new Incoterm rules are, why some

were changed and what Incoterms are not. What’s the likely future impact of the new

Incoterms on business practices.

7

Incoterms® 2010

DISCLAIMER:

I am Not an Incoterm Expert, A Practitioner Only I am Not an Attorney (no legal advice given!) I am Not a CPA

AND I AM NOT FRANK REYNOLDS!

8

Incoterms® 2010 Who is FRANK J. REYNOLDS?

See page 122 of Incoterms® 2010 (the book) Frank is a long-time international marketer, industry

consultant and (prolific) author on int’l trade Associated with the USCIB and the U. S. rep to the ICC on

Incoterms (2000 and 2010); the only non-lawyer on the ICC committee for shipping terms.

He is the USA “guru” on International Commercial Terms! His seminars are largely sold-out, one day programs (and

expensive); but highly recommended!

9

Incoterms® 2010 Who is FRANK J. REYNOLDS?

President, Int’l Projects, Inc. Tel: 419 865 6201 Email: FJR424@aol.com Based in Toledo, Ohio Does freelance consulting For a listing of his seminars, go to

www.iccincoterms2010.org

10

Incoterms® 2010 Other Resources on Incoterms®

Buy Frank’s book, a great resource --

Incoterms® For Americans®

Also, coming out in early 2011 will be The Guide to Incoterms® by the ICC (very basic, pictorial guide; excellent desk reference book with lots of

pictures!), authored by Jan Ramberg

The ICC Wall Chart for those who need a handy cheat sheet (and see copy at end of this presentation)

The latter two items are ICC publications and available from www.iccbooksusa.com

11

Incoterms® 2010 What is the International Chamber of Commerce (ICC)?

Founded in 1919 (in Paris) Representatives from over 120 countries Represents the views of the Private Sector on the practical elements of

conducting international trade and investment. Very highly regarded and viewed as having legitimacy and authority in most

countries; a knowledgeable and reliable resource on int’l trade. Key services include Int’l Court of Arbitration, ICC Chamber of Commerce

Network. Works closely with the WTO and the U.N., and G20 Has a large framework of working committees that address key sectors and

makes available rules and guidelines in areas as Finance, IT, Transportation and more . . . .

See page 126 of your book

12

Incoterms® 2010What are Incoterms® ?

International Commercial Terms (Incoterms) First formulated by the ICC in 1936 A set of standardized guidelines that parties in different countries (and

different legal environments) use for structuring the logistical elements of selling and buying goods.

The emphasis is on delineating (in a sales transaction of tangible goods) the risks and costs between the seller and the buyer via determining a specific place and time for delivery of the goods.

For decades, the ICC just revised Incoterms as needed (as in early 80’s replacing C& F with CFR ) but has been on a 10 year cycle since 1990, then 2000, and now the 2010 revision.

13

Incoterms® 2010 What are Incoterms® ?

International Commercial Terms (Incoterms)

With the 2010 version, the word “Incoterms” becomes a registered trademark of the International Chamber of Commerce in Paris.

(And I understand they intend to aggressively protect this mark!)

And for the first time these terms are now referred to as RULES

Will be in some 36 (or more) languages

14

Incoterms® 2010What are Incoterms® ?

Abbreviated in a three letter format, and the abbreviations are always in English.

Typically quoted with a specific geographic location of delivery, as Ex Works Seller’s Plant (500 Annunciation Street, New Orleans, LA USA) or can be as simple as FOB Any USA Port (but usually best to be specific as you can).

15

Incoterms® 2010 Why revise Incoterms beginning 2011?

THE TOP TEN REASONS TO REVISE INCOTERMS!

10.Desire by the ICC to have a universal set of shipping terms that could be used for domestic and well as international shipments.

16

17

Incoterms® 2010 Why revise Incoterms beginning 2011?

THE TOP TEN REASONS TO REVISE INCOTERMS!

10. Desire by the ICC to have a universal set of shipping terms that could be used for domestic and well as international shipments.

9. In the USA, the national council that oversees the Uniform Commercial Code recommended the deletion of the section addressing shipping terms (the so-called FOB terms), Article 2.319 through 2.324 (as a part of an overall review of the UCC in 2004). Slowly, states are adopting this change (and some may adopt Incoterms, most have so far done nothing). WHAT HAS LOUISIANA DONE?

18

Incoterms® 2010 Why revise Incoterms beginning 2011?

THE TOP TEN REASONS TO REVISE INCOTERMS!

10. Desire by the ICC to have a universal set of shipping terms that could be used for domestic and well as international shipments.

9. In the USA, the national council that oversees the Uniform Commercial Code recommended the deletion of the section addressing shipping terms (the so-called FOB terms), Article 2.319 through 2.324 (as a part of an overall review of the UCC in 2004). Slowly, states are adopting this change (and some may adopt Incoterms, most have so far done nothing). WHAT HAS ALABAMA DONE?

8. Also in the USA, the adoption of Sarbanes-Oxley requiring greater verification (and liability to senior managers/board of directors) that financial reporting is accurate and in regulatory compliance -- AND INCOTERMS CAN IMPACT REVENUE AND PAYABLES RECOGNITION (WHY?)

Incoterms® 2010 Why revise Incoterms beginning 2011?

7. Desire by the Europeans to modify -- and simplify -- shipping terms reflecting greater trade volumes within the EU.

19

20

Incoterms® 2010 Why revise Incoterms beginning 2011?

7. Desire by the Europeans to modify -- and simplify -- shipping terms reflecting greater trade volumes within the EU.

6. The advent of the Chinese as a major player in world trade, their admission to the WTO and their desire to have input into the ICC overall and, in particular, input into the shaping of shipping terms (although the ICC is still very “euro centric” and the Incoterms® oversight committee members are largely lawyers).

21

Incoterms® 2010 Why revise Incoterms beginning 2011?

7. Desire by the Europeans to modify -- and simplify -- shipping terms reflecting greater trade volumes within the EU.

6. The advent of the Chinese as a major player in world trade, their admission to the WTO and their desire to have input into the ICC overall and, in particular, input into the shaping of shipping terms (although the ICC is still very “euro centric” and the Incoterms® oversight committee members are largely lawyers).

5. Increased inter-modalism in international trade and the need for a broader scope of shipping terms to address land/ocean/air movements.

Incoterms® 2010 Why revise Incoterms® beginning 2011?

4. Advent of International Financial Reporting Standards (IFRS) by European public companies (and many larger private ones) with a corresponding push for a universal standard on revenue and expense recognition primarily tied to point/time of delivery.

22

23

Incoterms® 2010 Why revise Incoterms® beginning 2011?

4. Advent of International Financial Reporting Standards (IFRS) by European public companies (and many larger private ones) with a corresponding push for a universal standard on revenue and expense recognition primarily tied to point/time of delivery.

3. GAAP in the USA is under int’l pressure to be in parallel with the Int’l Financial Reporting Standards (IFRS) -- not in our life times!

24

Incoterms® 2010 Why revise Incoterms® beginning 2011?

4. Advent of International Financial Reporting Standards (IFRS) by European public companies (and many larger private ones) with a corresponding push for a universal standard on revenue and expense recognition primarily tied to point/time of delivery.

3. GAAP in the USA is under int’l pressure to be in parallel with the Int’l Financial Reporting Standards (IFRS) -- not in our life times!

2. Significant desire by many Fortune 500 companies in the USA to have a standardized, universal set of shipping terms for use within the USA (as well as internationally) that is consistent with current business practices and modes of transport.

Incoterms® 2010 Why revise Incoterms® beginning 2011?

THE NUMBER ONE REASON TO REVISE INCOTERMS!

1. To assist the Obama Administration -- and Don van de Werken -- in its Export Initiative to DOUBLE exports in five years (State of the Union Address, February 2010) !

25

Incoterms® 2010

Why are Incoterms relevant (and for whom)?

Determining exactly when and where delivery occurs is important, why?

26

27

Incoterms® 2010 Why are Incoterms relevant (and for whom)?

Delivery is when responsibility (but not necessarily legal title) for the goods transfers from the seller to buyer, and with that event there are material implications for the seller and for buyers regarding the transfer of risk and cost.

28

Incoterms® 2010 Why are Incoterms relevant (and for whom)?

In a typical ocean shipment, such questions are inherent in putting together a sale --

Who shoulders the responsibility (costs & risk) from the seller’s warehouse to the port?

Who handles . . . export clearance & U. S. gov’t compliance requirements (who is the exporter of record)?

Then, who handles the transport from the dock to on board the vessel? As the vessel crosses the ocean to the destination port? Unloading at the destination? Customs clearance at the destination (who is the importer of record)? Who pays any import duties (and in what currency)? Inland transportation to the buyer?

Incoterms® 2010 Why are Incoterms relevant (and for whom)?

Determining exactly when and where delivery occurs is important, why?

Impact on legal contracts --

Level One: Sales Contract / Purchase Order

Sublevel of Impacted by Incoterms: Transport Contract(s) Insurance Policies (Cargo, Liability) Letter of Credit Finance Contracts Other ?

29

Incoterms® 2010 Why are Incoterms relevant (and for whom)?

Provides a clear, universal set of standards for multi-lingual, multi-cultural, “multi-legal” usage -- very practical and based on business practices (not legal principles and abstract ideas)

Specifies which party -- either the seller or the buyer -- has the obligation (to arrange and cover any costs) for (transport) carriage, (cargo) insurance, and (trade) compliance.

30

Incoterms® 2010 Why are Incoterms relevant (and for whom)?

AND NOW . . . a set of rules that are designed for both domestic and international transactions!

31

Incoterms® 2010

For Whom are Incoterms Now Relevant?

NO LONGER relevant for just the import/export logistics department!

32

Incoterms® 2010 For Whom are Incoterms Relevant -- NOT just the import/export logistics department, right?

Salespersons and Sales Support Staff (Domestic & International)

Logistics Staff (Domestic & International) Legal Dept/Outside Counsel Finance Managers Accountants/CPAs Bankers Freight Forwarders Customs House Brokers Other (as Purely Domestic Freight Companies)?

33

Incoterms® 2010

What Incoterm Rules Don’t Do :

As we addressed earlier . . . by themselves, Incoterms do NOT address transfer of legal title of the goods.

Rather, title passage is usually addressed in the sales/purchase contract or, if not, by default it is addressed by sovereign (local) law.

FYI . . . in most transactions, passage of legal ownership from the seller to the buyer usually requires two events:

Delivery + Payment = Title Transfer

34

Incoterms® 2010

What Incoterm Rules Don’t Do (Continued) :

By themselves, Incoterms are not law and do NOT automatically apply to every sales transaction of tangible goods.

The parties must specify that their transaction is subject to Incoterms® 2010.

If silent, the default in the USA is the UCC for domestic transactions (Yipes!).

Or, for cross border transactions, the (USA) default may be the UCC or, in some instances, the UN Convention on the Sale of Goods (CISG) to which the USA is a party (similar to treaty status).

35

Incoterms® 2010 What Incoterm Rules Don’t Do (Continued) :

By themselves, Incoterms do not determine revenue or expense recognition in financial statements.

36

Incoterms® 2010

By themselves, Incoterms do not determine revenue or expense recognition in financial statements . . .

GAAP in the USA, the Int’l Financial Reporting Standards (IFRS) and other national accounting standards address this issue -- - however, when and where delivery occurs is often an integral part of determining revenue/expense recognition in the sale of tangible goods (other elements which may affect revenue recognition include control over the goods, who has ultimate risk for the goods, seller buy-back provisions and such).

37

Incoterms® 2010 What Incoterm Rules Don’t Do :

By themselves, Incoterms do not specify how goods are to be packed for shipment or how the goods are to be loaded and stowed onto transport equipment (as in a container, on a truck, rail car, aircraft, ocean vessel, etc.).

38

Incoterms® 2010 What Incoterm Rules Don’t Do :

Incoterms are not Payment Terms (although payment timing is commonly tied to the event of delivery).

Payment Terms + Incoterms = Terms of Sale

39

Revising Incoterms - the process (don’t look!)

Decision to undertake the revision by the ICC Incoterms oversight committee in November 2007 in Stockholm (too much wine served at dinner?)

Met 11 more times (no alcohol allowed!) 130 countries submitted input with over

2000 individual comments/requests for changes.

40

Revising Incoterms (a camel made by a committee?)

Private sector input, mainly lawyers; government representatives were excluded.

The ICC committee developed a working draft, went through 4 revisions, formal adoption by the full ICC was September 2010

(see pages 119 - 123 for mug shots and bios)

41

Revising Incoterms, the 2010 revision . . .

Result: -- Reduced number from 13 to 11

-- Domestic and Int’l Usage-- Clarified some ambiguities

(e.g. the ship’s rail?)-- A simpler, more user-friendly set of (voluntary) rules.

42

Revising Incoterms, the 2010 revision . . .

Result: Added some specific definitions for clarity --

1. Carrier2. Shipper3. Delivery4. Pre-carriage5. Main Carriage6. On-carriage

See Page 10 of your book . . . . 43

Incoterms® and Sales Contracts -- Key Elements !

-- Full (legal) name and address of parties-- Good, practical description of the goods that can be used to

verify the customs classification-- Shipping Instructions (and packing) & Insurance -- Payment terms and currency-- Incoterms®-- Passing of title (e.g., after delivery and payment)-- Timing for events (latest shipment, etc.)-- Applicable law and dispute resolution (as the ICC)-- Duly signed by authorized parties

44

Incoterms 2010 – What’s New?

New Layout – Divided into two distinct sections– Any Mode Terms: DDP, DAP, DAT, CIP, CPT, FCA, EXW

– Waterway/Maritime Terms: FOB, FAS, CFR, CIF

– As opposed to 2000 version that began with EXW and progressed to DDP – Least to most risk

Includes explanation of terms used in the book 11 Terms (Down from 13)

– DAF, DES, DDU, & DEQ have been removed and replaced by DAP & DAT respectively

Graphics added to illustrate risk and obligation

45

What happened to DAF, DES and DDU?

These three terms have been replaced by one term DAP (Delivered at Place)– DAF (Delivered at Frontier) – Rarely used and limited to ground

transport

– DES (Delivered Ex-Ship) – Limited to water shipments only

– DDU (Delivered Duty Unpaid) – Not appropriate for domestic shipments since duty was implied

DAP can be used with any mode of transport – domestic or international

46

What happened to DEQ?

DEQ (Delivered Ex-Quay) replaced by DAT (Delivered at Terminal)– DEQ required the seller (shipper) to unload at the quay

– DEQ was limited to water transport

DAT– Requires the seller to unload at the quay, terminal, or

warehouse

– Can be used with any mode of transport

47

F Terms – General Considerations

Main Carriage contracted by buyer Less work for seller, but less control over

documents– For documentary payment terms

– For US Exporters, EEI (Electronic Export Information) filings are typically done by forwarder

– Compliance – Documentation required

For US Importers, F Terms facilitate ISF (Importer Security Filing – 10+2) reporting

48

C Terms – General Considerations

Most advantageous for seller Main Carriage contracted by seller

– Most control over documents

– More work for exporter than F Terms

Under C Rules, buyers are responsible for the goods during the main carriage even though the seller has made the arrangements for main carriage

US Importers must rely on their supplier’s forwarder to submit 10+2 documentation and US Importers at risk during main carriage 49

D Terms – General Considerations

“Arrival” Terms Main Carriage contracted by seller Seller responsible for goods until delivered

(“arrived”) to specified location on the buyer’s side– Not particularly advantageous if you’re looking

for early revenue recognition

50

D Terms – General Considerations Continued

For US Exporter – more work than the F Terms and greater risk than the C Terms– Seller agrees to deliver or make arrive at named location on the

buyer’s side

– Potential for demurrage charges

For US Importers, again, the 10+2 filings are handled by the vendor’s forwarder

Not the best term to use for L/C transactions, since the BL or AWB do not show actual arrival 51

Any Mode Terms

EXW FCA CIP and CPT DAP, DAT and DDP

52

EXW (Ex-Works)

Any mode term Least work for exporters/sellers

– Popular among new exporters Seller makes goods available for pickup

(including agreed packaging)– Is the packaging suitable for international

shipments?

53

EXW (Ex-Works) Continued

Buyer responsible for loading goods at EXW place– How often does this actually happen?

– If the seller is loading, who takes responsibility if damage occurs?

– What document evidences of delivery? (No standard)

Buyer responsible for export and compliance documentation– Seller must provide company info to buyer’s forwarder and how does seller

feel about that

All of this makes EXW less desirable

54

EXW and Letters of Credit

What happens if the buyer decides to instruct their forwarder not to pick up the goods?– How irrevocable is your L/C?

– What about custom made goods?

Who’s managing the documentation and presentation process?– Do you want your customer’s forwarder preparing

documents you need to draw on your L/C?

– What is the L/C’s confirmed?

Diversion issues – where will the goods end up?55

FCA (Free Carrier)

Recommended as substitute for EXW Can be used with any mode of transport Seller must deliver the goods to the carrier

provided by the buyer at a named point on the seller’s side– If no point is named the seller can choose a point best suited for

them - the named point can be the seller’s facility

Seller is responsible for:– Packaging, Loading, Pre-carriage (if any – none if at seller’s

dock), Export Clearance, and Compliance Documentation 56

FCA (Free Carrier) Continued

Seller not responsible for unloading on buyer’s side

Buyer responsible for everything else after loading

Insurance not specified Freight Collect – Buyer pays

57

CPT (Carriage Paid To)

Can be used with any mode of transport Well suited for multimodal transport Seller must clear goods for export including

export compliance documentation Seller delivers goods, packaged for

shipment, to carrier for transport to a named destination place on the buyer’s side

58

CPT (Carriage Paid To) Continued

Seller pays all transportation costs to specified delivery destination – main carriage– Risk passes to buyer when goods are delivered to carrier

Buyer typically responsible for unloading at place of destination

Insurance not specified Freight Prepaid – Seller pays – Need to

incorporate freight charges into invoice to buyer59

CIP (Carriage & Insurance Paid to) Same as CPT except Insurance Can be used with any mode of transport Well suited for multimodal transport Seller must clear goods for export including

export compliance documentation Seller delivers goods, packaged for

shipment, to carrier for transport to a named destination place on the buyer’s side

60

CIP (Carriage & Insurance Paid to) Continued

Seller pays all transportation costs to specified delivery destination – main carriage– Risk passes to buyer when goods are delivered to carrier

Buyer typically responsible for unloading at place of destination

Insurance is seller’s obligation (minimum coverage)

Freight Prepaid – Seller pays – Need to incorporate freight and insurance charges into invoice to buyer

61

DAT (Delivered at Terminal)

Any mode (arrival) term – replaces DEQ Seller obtains export clearance and handles

export compliance documentation Seller packages goods for transport and

pays for all transportation costs to a named destination terminal

Seller pays for unloading at the named destination (dock, warehouse, etc.) terminal on buyer’s side 62

DAP (Delivered at Place)

Any mode (arrival) term Seller obtains export clearance and handles

export compliance documentation Seller packages goods for transport and

pays for all transportation costs to a named destination place on the buyer’s side

Buyer responsible for unloading goods at the named place – this is the main difference b/t DAP and DAT 63

DAP (Delivered at Place) Continued

Buyer responsible for import clearance and on carriage (if any)

No insurance specified Freight Prepaid – Seller pays – Need to

incorporate freight charges into invoice to buyer

Seller must provide appropriate documentation for release of goods on buyer side– This is important if on a L/C – flow of documents 64

DDP (Delivered Duty Paid)

Any Mode (arrival) term Not suitable for domestic shipments Seller arranges to pay for:

– Transportation, Foreign duties, Export and Import Licenses, Export Compliance Documentation

Seller clears goods through Customs in foreign country for delivery to a named place on the buyer’s side– May be foreign exchange risk

65

DDP (Delivered Duty Paid) Continued

Risky for exporter – dealing with foreign customs

Buyer typically responsible for unloading at the point of delivery

Insurance not specified Freight Prepaid – Seller pays – Need to incorporate

freight and insurance charges into invoice to buyer An importer under DDP is not necessarily the

importer of record since they are not clearing goods through Customs – this may affect Duty Drawback 66

Sea and Inland Waterway Transport Terms

FAS FOB CFR CIF

67

FAS (Free Alongside Ship)

Sea and Waterway Term Usually used for charter party transactions

(not liner containerized shipments) Seller delivers the goods, commodity, or

product, packaged or prepared for export alongside a vessel designated by the buyer at a named place/port on the seller’s side

Seller responsible for export clearance and export compliance requirements 68

FAS (Free Alongside Ship) Continued

Buyer responsible for:– Loading the vessel, Main carriage, Clearance

through Customs, On-carriage Insurance not specified Freight Collect – Buyer pays

69

FOB (Free on Board)

Sea and Waterway Term (not to be confused with UCC term FOB)– Incoterms 2010 will be used for both domestic and

international transactions

Seller delivers the goods packaged and prepared for export, loaded on-board a vessel chosen by the buyer, at a port on the seller’s side

Seller is responsible for:– Export compliance requirements, Export Clearance,

and Pre-Carriage70

FOB (Free on Board) Continued

“Over the ship’s rail” is no longer used as a point to define transfer of risk from seller to buyer– Buyer and seller should agree on what constitutes loaded on board

– Different products loaded differently

– Seller responsible for performance of carrier loading the ship even though carrier is chosen by the buyer

Buyer responsible for:– Main carriage, Import clearance, and On-Carriage

Freight Collect – Buyer Pays Insurance not specified Common Incoterm for L/C transactions

71

CFR (Cost and Freight)

Sea and Waterway Term Seller delivers goods, packaged for

shipment, to carrier for transportation to a named destination port on the buyer’s side– Risk passes to buyer when goods delivered to carrier

Seller:– Chooses vessel, Pays costs for main carriage, and

handles export clearance and compliance requirements

72

CFR (Cost and Freight) Continued

“Over the ship’s rail” is no longer used as a point to define transfer of risk from seller to buyer– Buyer and seller should agree on what constitutes loaded on board

Buyer responsible for:– Vessel unloading, Import clearance, and On-Carriage

Freight Prepaid – Seller pays – Need to incorporate freight charges into invoice to buyer

Insurance not specified

73

CIF (Cost Insurance and Freight)

Sea and Waterway Term Seller delivers goods, packaged for

shipment, to carrier for transportation to a named destination port on the buyer’s side– Risk passes to buyer when goods delivered to carrier

Seller:– Chooses vessel, Pays costs for main carriage, and

handles export clearance and compliance requirements

74

CIF (Cost Insurance and Freight)

Continued “Over the ship’s rail” is no longer used as a point to define

transfer of risk from seller to buyer– Buyer and seller should agree on what constitutes loaded on board

Buyer responsible for:– Vessel unloading, Import clearance, and On-Carriage

Freight Prepaid – Seller pays – Need to incorporate freight charges into invoice to buyer

Insurance is seller’s obligation (minimum coverage)

75

Incoterms 2010 ChartAny Mode Terms Control of

CostsMain Carriage

CostRisk of Costs

Departure, Freight Collect

EXW (Ex-Works) Buyer Buyer BuyerMain Carriage Freight Collect

FCA (Free Carrier) Buyer Buyer BuyerMain Carriage Freight Prepaid

CIP (Carriage & Insurance Paid To) Seller Seller Buyer

CPT (Carriage Paid To) Seller Seller BuyerArrival, Freight Prepaid

DAT (Delivered at Terminal) Seller Seller Seller

DAP (Delivered at Place) Seller Seller Seller

DDP (Delivered Duty Paid) Seller Seller Seller 76

Incoterms 2010 Chart

Sea, Inland Waterway Transport Terms

Control of Costs

Main Carriage Cost

Risk of Costs

Main Carriage Freight Collect

FAS (Free Alongside Ship) Buyer Buyer Buyer

FOB (Free on Board) Buyer Buyer BuyerMain Carriage Freight Prepaid

CFR (Cost and Freight) Seller Seller Buyer

CIF (Cost, Insurance, and Freight)

Seller Seller Buyer

77

Which of the following are Any Mode Terms?

781 2 3 4 5

0% 0%

86%

0%

14%

1. EXW

2. FCA

3. CIP

4. DDP

5. All of the Above

Which of the following are only Sea and Inland Waterway Terms?

791 2 3 4

0%

89%

0%

11%

1. FAS

2. FOB

3. CIF

4. All of the Above

Which Incoterm is recommended as a substitute for EXW?

801 2 3 4

13%

0%

25%

63%1. FOB

2. FCA

3. FAS

4. SOL

Incoterms are considered as Law and are also used as Payment

Terms.

811 2

78%

22%

1. Very True.

2. Very False.