Incoterms 2000
Incoterms 2000 bring the official ICC rules for the interpretation of the most commonly used trade terms in line with the current international trade practices:
recent spread of customs-free zonesincreased use of electronic communications in business transactionschanges in transport techniques.
In their 2000 revised version, Incoterms concentrate on the thirteen most important trade terms and offer a simpler and clearer presentation of them. The use of different expressions to convey the same meaning has been avoided. Moreover, whenever possible, the same expressions as appear in the 1980 Vienna Convention on Contracts for the International Sale of Goods have been used.
The following is the complete list of Incoterms 2000 in their abbreviated form, full form and in a Russian translation.
As is clearly seen from the list, the terms are grouped in four basically different categories:
• the «E» term whereby the seller simply makes the goods available to the buyer at the seller’s own premises. This term represents the minimum obligation for the seller (and the maximum obligation for the buyer).
• the «F» terms FCA, FAS, FOB whereby the seller is asked to deliver the goods to a carrier appointed by the buyer.
• the «C» terms CFR, CIF, CPT, CIP whereby the seller contracts for carriage without taking the risk of loss or damage to goods or additional costs due to events occurring after shipment and dispatch.
• the «D» terms DAF, DES, DEQ, DDU, DDP whereby the seller bears all costs and risks needed to bring goods to place of destination.
The respective obligations of parties under each term are grouped under ten headings. Each heading on the seller’s side has its equivalent on the buyer’s side.
At first glance, it would seem best that each of the contracting parties limit its obligation as much as possible. The seller would then try to negotiate an Ex Works contract while the buyer would try to persuade the seller to deliver goods duty paid to the buyer’s premises. In practice, however, the situation is not that simple. A seller or a buyer cannot easily make a better contract merely by shifting functions, costs and risks to a contracting party. The parties involved will probably be guided by the following criteria: