Class 05 - How to export? INCOTERMS

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Welcome to this fifth class on the bases of the export process in Costa Rica. Now if we enter into legal terminology, this time I will expose the incoterms (contraction for international trade terms). These specify the agreement between the seller and the customer on the conditions that will govern the shipment of the products.

INCOTERMS: What are they for?

Their function is to define the cost in the International trade exchanges, includes the responsibility between the parties in terms of risks and expenses.

They are updated by the International Chamber of Commerce. It is important to note that they are applicable exclusively to the purchase / sale of tangible goods, not services. The aspects that are regulated are mainly four:

Delivery of the product:Direct, if it is carried out through the seller, or indirect, in the case of contracting the services of a carrier.

Responsibility for risks:Who is responsible for what eventuality and until what time and exact geographical point said responsibility is maintained.

Participation in expenses:Delimitation of the percentage of the expenses that are generated to deliver the merchandise and any other related expenses.

Customs procedures:Normally this is the responsibility of the seller.

INCOTERM categories (E, F, C, D):

E:The product is delivered at the sellers premises.

F:The seller loads the product on a medium paid for by the customer.

C:The seller chooses and pays for the transport, but without responsibility.

D:Both the transport and the risks are assumed by the seller.

Description of each INCOTERM according to responsibilities:

EXW (In Factory):The load to the truck is assumed by the seller, the rates of Exportation is assumed by the seller, mobilization to the port is assumed by the seller, unloading at the port of departure and internal transport within the port is assumed by the seller. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

FCA (Free carrier):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the port It is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the seller. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

FAS (Free at the side of the ship):The load to the truck is assumed by the client, the export rates are assumed by the client, the Mobilization to the port is assumed by the client, unloading at the port of departure and internal transport within the port is assumed by the client. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

FOB (Free on board):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the Port is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the customer. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

CFR (Cost and Freight):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the Port is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the customer. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

CIF (Cost, Insurance and Freight):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the port is assumed by the client, unloading at the port of departure and internal transport within the port is assumed by the client. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the client. Insurance is assumed by The customer, the customs payment is assumed by the seller. The import tax is the responsibility of the client.

CPT (Transport Paid To):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the Port is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the customer. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

CIP (Transport and Insurance Paid Up):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the port is assumed by the client, unloading at the port of departure and internal transport within the port is assumed by the client. The landing fees at the destination port and the truck loading are assumed by the seller. The transport to the final destination is assumed by the seller. Insurance is assumed by the customer, customs payment is assumed by the seller. The import tax is the responsibility of the seller.

DAT (Delivered at the terminal):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the Port is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the customer. The landing fees at the destination port and truck loading are assumed by the client. The transport to the final destination is assumed by the seller. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

DAP (Delivered at a point):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization the port is assumed by the client, unloading at the port of departure and internal transport within the port is assumed by the client. The landing fees at the destination port and truck loading are assumed by the client. The transport to the final destination is assumed by the client. The insurance is assumed by the seller, the customs payment is assumed by the seller. The import tax is the responsibility of the seller.

DDP (Delivery Duties Paid):The load to the truck is assumed by the client, the export rates are assumed by the client, the mobilization to the Port is assumed by the customer, unloading at the port of departure and internal transport within the port is assumed by the customer. The landing fees at the destination port and truck loading are assumed by the client. The transport to the final destination is assumed by the client. Insurance is assumed by the client, customs payment is assumed by the client. The import tax is the responsibility of the customer.