Basic trade terms

EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP

From left to right, the seller's obligations are growing. Buyer's vice versa. Therefore, in the above trade terms, the seller bears the minimum responsibility under EXW term, while the seller bears the maximum responsibility under DDP term.

EXW ex works... (designated location)

"Ex works (... "Designated place" means when the seller places the goods at his place or at another designated place (such as a workshop, factory or warehouse) for the disposal of the buyer, the delivery is completed and the seller does not clear the customs for export or load the goods on any means of transport. This term is the term for which the seller assumes the least liability. The buyer must bear all costs and risks of taking delivery of the goods at the seller's location. However, if the parties wish the seller to be responsible for loading the goods at the time of shipment and bear all the costs and risks of loading the goods, it shall be expressly stated in the sales contract. The term shall not be used when the buyer is unable to go through the export formalities directly or indirectly, but rather FCA, if the seller agrees to load the goods at its own expense and risk.

FCA FCA (FCA FCA) Designated location)

"Free carrier (... Named place) means that the seller shall complete the delivery of the goods as long as it delivers the goods to the carrier named by the buyer at the named place and goes through the export customs clearance procedures. It should be noted that the choice of place of delivery affects the obligation to load and unload at that place. If the seller makes delivery at his place, the seller shall be responsible for loading, and if the seller makes delivery at any other place, the seller shall not be responsible for unloading. The term can be used for any mode of transport, including multimodal transport. FCA risk transfer is generally transferred at the time of delivery, but there are exceptions, generally because the buyer did not receive the goods on time, or because the buyer did not give timely notice to the seller when the risk transfer is not transferred in the exchange of fire, from the date of the agreed delivery date the buyer must bear all the risks. In addition, attention should be paid to the FCA's delivery point. There are four situations:

1. The designated place is the location of the seller. When the goods are loaded onto the carrier designated by the buyer or the means of transport of others on behalf of the buyer, the goods are deemed to be delivered.

2. Delivery shall be deemed to be made when the goods are on the seller's means of transport, provided that the named place is not the above mentioned place (except where the seller is located).

3. If the named place does not have a specific place of delivery, the seller may choose the most suitable place of delivery.

Iv. If the buyer does not clearly indicate the place of delivery, the seller may deliver the goods according to the mode of transportation and the quantitative nature of the goods

FAS free alongside ship (... Designated port of loading)

"Free alongside ship (... Named port of shipment) means that the seller delivers the goods to the ship at the named port of shipment. The e buyer shall bear all risks of loss or damage to the goods from then on.

The FAS term requires the seller to clear the customs for export.

Free on FOB basis (... The designated port of loading is commonly used in our country

"Free on board (... Named port of loading) is when the goods pass over the ship's rail at the named port of loading, the seller completes the delivery. This means that the buyer must bear all risks of loss or damage of the goods from that point on. The FOB term requires the seller to clear the goods for export. The term applies only to sea or inland water transport. If the parties have no intention of delivering the goods over the ship's rail, the FCA term shall be used.

FOB terms: name of goods + quantity of goods + unit price +FOB+ port of shipment for example: grade I wool of Angola 3000 tons, 980 yuan/ton new port

The transfer of risk is over the side of the ship. For example, India buys cement from Britain and signs FOB terms. When the British company loads the cement at the loading port, the boom of lifting cement breaks and the cement falls into the sea and is lost. The liability for goods not crossing the ship's rail shall be borne by the seller's British company. If, in the course of further lifting, the boom breaks and the cement falls onto the ship board instead of into the sea, the risk is transferred to the buyer and this responsibility shall be borne by the buyer's Indian company.

CFR (cost and freight)... Designated port of destination (commonly used in China

"C&f (... "Named port of destination" means that the seller completes the delivery of the goods after they pass the ship's rail at the port of shipment, and the seller must pay the freight and expenses incurred in transporting the goods to the named port of destination. However, the risk of loss or damage to the goods after delivery and any additional costs arising from any event shall pass from the seller to the buyer.

The CFR term requires the seller to clear the customs for export.

The term applies only to sea or inland water transport. If the parties do not intend to deliver the goods over the ship's rail, the term CPT shall be used.

CIF cost, insurance and freight (...... Designated port of destination (commonly used in China

"Cost, insurance and freight" means that the seller delivers the goods when they cross the ship's rail at the port of loading.

The seller shall pay the freight and expenses incurred in transporting the goods to the named port of destination, provided that the risk of loss or damage of the goods after delivery and any additional costs arising from various events shall pass from the seller to the buyer. However, under CIF terms, the seller must also insure the buyer against the risk of loss or damage in transit.

Therefore, the seller enters into an insurance contract and pays the premium. The buyer should note that the CIF term only requires the seller to cover the minimum insurance coverage. If the buyer requires higher insurance coverage, it may need to reach an explicit agreement with the seller or make additional insurance arrangements on its own.

The CIF term requires the seller to clear the goods for export.

The term applies only to sea and inland water transport. If the party does not intend to deliver the goods over the ship's rail the CIP term shall be used.

CPT freight payable to price (named destination) delivery time and place: the first carrier risk transfer is the transfer of delivery suitable for various modes of transport.

CIP freight and insurance paid to (... Designated destination)

"Freight and insurance paid to (... "Named destination" means the delivery of the goods by seller to the named carrier, provided that the seller shall also pay the freight to the destination, i.e., the buyer shall bear all risks and additional costs after the delivery by the seller. However, in CIP terms, the seller must also insure the buyer against the risk of loss or damage of the goods in transit.

Therefore, the seller enters into an insurance contract and pays the premium.

The buyer shall note that the CIP term requires the seller to cover only the minimum insurance coverage. If the buyer requires higher insurance coverage, it may need to reach an explicit agreement with the seller or make additional insurance arrangements on its own.

"Carrier" means any person who, in the contract of carriage, undertakes to perform the carriage by rail, road, air, sea, river or a combination of the above, or by any other person. If the goods are also carried to the agreed destination by the carrier on whom they are to be received, the risk passes from the time the goods are delivered to the first carrier.

The CIP term requires the seller to clear the goods for export.

The term is applicable to all modes of transport, including multimodal transport.

DAF frontier delivery (... Designated location)

"Delio frontier (... Designated place) "means that the seller delivers the goods which have not been discharged from the means of transport which is still in delivery to the buyer before the customs boundary of the neighboring country at the designated place and specific delivery point at the border. The term "border" can be used at any border, including the border of the exporting country. It is therefore extremely important to define precisely the border in question with the designated place and the specific point of delivery.

Fob DES port of destination (... Designated port of destination)

"Fob port of destination (... "Designated port of destination" means that the goods are delivered to the buyer on board at the designated port of destination, but the seller completes the delivery without going through the customs clearance procedures for the import of the goods. The seller shall bear all risks and expenses incurred before the goods are discharged at the designated port of destination. If the parties wish the seller to bear the risk and cost of unloading, the term DEQ shall be used.

The term can only be used when goods are transported by sea or inland river or intermodal transport on board ships at the port of destination.

Free at port of destination (... Designated port of destination)

"Delivery at port of destination" means that the seller hands over the goods to the buyer at the designated port of destination and completes the delivery without going through import customs clearance procedures. The seller shall bear all risks and expenses involved in transporting the goods to the named port of destination and unloading them at the wharf.

The term DEQ requires the buyer to clear the import customs and pay all customs formalities, duties, duties and other charges at the time of import.

DDU delivered duty unpaid (... Designated port of destination)

"Delivered duty unpaid (... Designated destination) means that the seller hands over the goods to the buyer for disposal at the designated destination, does not go through the import procedures, and does not unload the goods from the means of transport for delivery, that is, the delivery is completed. The seller shall bear all the risks and expenses of transporting the goods to the named destination, excluding any "taxes" (including the liability and risks of customs formalities and the payment of handling charges, duties, taxes and other expenses) to be paid in the destination country when customs formalities are required. The buyer shall bear such "taxes" and expenses and risks arising from its failure to clear the goods in time for import.

However, if the parties wish the seller to go through the customs formalities and bear the expenses and risks thus incurred, as well as a fee payable when the goods are imported, it shall be clearly stated in the sales contract. The term applies to all modes of transport except DES or DEQ when goods are delivered on board or at the port of destination.

DDP duty paid (... Designated port of destination)

"Delivery duty paid (... "Designated destination" means that the seller completes import customs clearance at the designated destination and hands over the undischarged goods on the means of delivery to the buyer to complete the delivery. The seller shall be liable for all risks and expenses incurred in transporting the goods to the named destination, including any "taxes" payable at the destination when customs formalities are required (including the liability and risks of customs formalities and the payment of handling charges, duties, taxes and other expenses).

In terms of EXW, the seller assumes the minimum liability, while in terms of DDP, the seller assumes the maximum liability.

If the seller cannot obtain the import license directly or indirectly, the term shall not be used. However, if the parties wish to exclude from the obligations of the seller all expenses (such as VAT) payable on any importation, it shall be expressly stated in the sales contract. The DDU term shall be used where the parties wish the buyer to bear the risks and costs of imports. The term applies to all modes of transport except DES or DEQ when goods are delivered on board or at the port of destination.