WHAT ARE THE INTERNATIONAL COMMERCIAL TERMS?

The International Commercial Terms, commonly known as Incoterms, are a standardized set of international trade terms used in international contracts to define the responsibilities and obligations of buyers and sellers regarding the delivery, transportation, and risk allocation for goods. Developed by the International Chamber of Commerce (ICC), Incoterms provide a common language for international trade transactions, ensuring that both parties have a clear understanding of the terms and conditions of a sale. As of my last knowledge update in September 2021, here are the Incoterms in use:

1. EXW - Ex Works: The seller makes the goods available for pick-up at their premises or another named place. The buyer is responsible for all transportation, costs, and risks from that point onward.

2. FCA - Free Carrier: The seller delivers the goods to a named carrier or another person nominated by the buyer at a named place. The buyer bears the risk once the goods are delivered to the carrier.

3. CPT - Carriage Paid To: The seller delivers the goods to a carrier nominated by them to a named place and pays the freight for the carriage. The risk transfers to the buyer once the goods are handed over to the carrier.

4. CIP - Carriage and Insurance Paid To: Similar to CPT, but the seller also arranges and pays for insurance covering the risk during transportation.

5. DAP - Delivered at Place: The seller delivers the goods to the buyer at a named place, ready for unloading. The seller bears all risks and costs until that point.

6. DPU - Delivered at Place Unloaded (formerly DAT - Delivered at Terminal): The seller delivers the goods to the buyer at a named place and is responsible for unloading. The seller bears the risk until the goods are unloaded.

7. DDP - Delivered Duty Paid: The seller is responsible for delivering the goods to the buyer's premises, paying for all costs, including customs duties and taxes, and bearing all risks until the goods are delivered.

8. FAS - Free Alongside Ship: The seller places the goods alongside the ship at the named port of shipment. The buyer is responsible for all costs and risks once the goods are placed alongside the vessel.

9. FOB - Free on Board: The seller is responsible for delivering the goods on board the vessel at the named port of shipment. The risk and costs transfer to the buyer once the goods are on board.

10. CFR - Cost and Freight: The seller delivers the goods on board the vessel and pays for the freight to the named destination port. The risk transfers to the buyer once the goods are on board.

11. CIF - Cost, Insurance, and Freight: Similar to CFR, but the seller also arranges and pays for insurance covering the risk during transportation.

It's important to note that Incoterms are periodically updated by the ICC to reflect changes in international trade practices and regulations. As such, you should always refer to the latest edition of Incoterms to ensure you are using the correct terms for your international trade transactions.