1、International Trade TermsInternational Trade TermsChapter TwoChapter Two22.1 Three sets of ruleslWarsaw-Oxford Rules 1932lRevised American Foreign Trade Definitions 1941lInternational Rules for the Interpretation of Trade Terms 20103Warsaw-Oxford Rules 1932lInitially in 1928-“Warsaw Rules, 1928” 22

2、provisions governing the rights and obligations of the parties to a sale of goods on CIF (Cost, Insurance and Freight) contract terms. lRevised in 1932-the “Warsaw-Oxford Rules 1932”21 provisions again mainly about CIF4Revised American Foreign Trade Definitions 1941l Defines 6 terms: Ex Point of Ori

3、gin FOB (free on board) FAS (free along side) l 6 variants of FOB FOB (named inland carrier at named inland point of departure) FOB (named inland carrier at named inland point of departure) Freight Prepaid to (named point of exportation) FOB (named inland carrier at named inland point of departure)

4、Freight Allowed to (named point of exportation) FOB (named inland carrier at named inland point of exportation) FOB Vessel (named port of shipment) Incoterms FOB FOB (named inland point in country of importation) C&F (Cost and Freight) CIF (Cost, Insurance and Freight) Ex Dock (Named Port of Imp

5、ortation)5International Rules for the Interpretation of Trade Terms 2010 (Incoterms 2010)l 1936- first created by International Chamber of Commerce (ICC)l The purposes of Incoterms:To give the businessmen a set of international rules for the interpretation of the most commonly used trade termsTo cla

6、rify the obligations of the buyer and the sellerTo simplify the contract negotiations To save time and costl Revised in 1953, 1967, 1976, 1980, 1990, 2000, 2010l Incoterms 2010 includes 11 terms.62.2 Basics of Incoterms 20102.2.1 Scope of Governance lParties involved: concerning only 2 parties - sel

7、ler & buyerlDocument applied: only to the contract of salelSpecific aspects governed: only settle matters concerning the delivery of tangibles goods sold Focusing only on the delivery of tangible goodsDelivery also indicating the transfer of obligations, cost and risk distribution between the pa

8、rties72.2.1 Scope of Governance lObligationObligation - a legal duty to do something according to a certain agreement. universally accepted obligation, eg: lthe seller - provide goods in conformity with the contractlThe buyer - pay the price as stipulated in the contractother obligations: handle the

9、 customs clearance, carriage of goods, insurance82.2.1 Scope of Governance lCost local and overseas transportation and insurance costsgoods checking and inspection expenses, customs clearance charges loading and unloading charges of the goods at some particular transport points lTransfer of risk“Ris

10、k” refers to accidental damage to the goods. time: when does the risk pass from the sellers to the buyers? 92.2.2 Categorization of Termsl 13 terms into four categories E-termthe seller only makes the goods available to the buyer at the sellers own premises. F-terms the seller is called upon to deli

11、ver the goods to a carrier appointed by the buyer. C-terms the seller has to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment or dispatch. D-terms the seller has to bear all costs and risks needed to bring

12、the goods to the place of destination. 10Incoterms 2010Group E DepartureEXWEx Works (named place)工廠交貨（ 指定地點(diǎn)）Group F Main Carriage unpaidFCAFree Carrier (named place)貨交承運(yùn)人（指定地點(diǎn)）FASFree Alongside Ship (named port of shipment)船邊交貨（ 指定裝運(yùn)港）FOBFree on Board (named port of shipment)船上交貨（ 指定裝運(yùn)港）Group C Main

13、 Carriage paidCFRCost and Freight (named port of destination)成本加運(yùn)費(fèi)（ 指定目的港）CIFCost, Insurance and Freight (named port of destination)成本、保險(xiǎn)費(fèi)加運(yùn)費(fèi)（ 指定目的港）CPTCarriage Paid to (named place of destination)運(yùn)費(fèi)付至（ 指定目的地）CIPCarriage and Insurance Paid to (named place of destination)運(yùn)費(fèi)保險(xiǎn)費(fèi)付至（ 指定目的地）Group D Arriva

14、lDATDelivered at Terminal (named terminal at port or place of destination)運(yùn)輸終端交貨（ 指定港口或目的地的運(yùn)輸終端）DAPDelivered at Place (named place of destination)目的地交貨（ 指定目的地）DDPDelivered Duty Paid (named place of destination)完稅后交貨（ 指定目的地）112.2.3 Brief of IncotermsThe “E” term (EXW)lSellers obligation min. lPlacing

15、 the goods at the disposal of the buyer at the agreed placeusually his own premiseslIn practice, also including assisting the buyer in loading the goods on the buyers collecting vehicle without charging a loading fee lFor the buyer to get lower price, but too demanding for him, therefore only applie

16、d to buyers having offshore branches 12EXWlDelivery: at sellers premiseslTransfer of risks: goods at the disposal of the buyerlPackaging and loading: Usu. seller no obligation for export packaging and loading; lExport customs clearanceUsu. buyers responsibility, sometimes seller does it for buyer, b

17、ut bears no risks 13The “F” terms (FCA, FAS, FOB) l Shipment contractl Seller delivers the goods for carriage as instructed by the buyerl buyer pays freight and signs carriage contract with carrier and notify sellerl FAS & FOB only for sea or inland waterway transportation model Sellers obligati

18、on, cost and risk transfers to buyer after delivery of the goodslSellerexporting license and export customs clearancel Buyerimporting license and import customs clearance14FCA Free Carrier (. Named place)lTransfer of risks goods at the disposal of the (1st) carrierlDelivery pointIf at sellers site,

19、seller responsible for loading If anywhere else, seller responsible for delivering the goods to the point required, but not responsible for unloading or reloading15FAS Free Alongside Ship (named port of shipment)lDelivery point: at port of shipmentlTransfer of risk: goods put alongside the vesselIf

20、vessel unable to enter the port due to force majeure, the seller is responsible for arranging and paying for the lighters to send the goods alongside the vessel offshore. (seller pays for lighter charges)16 Free on Board ( named port of shipment)lDelivery point: at port of shipmentlTransfer of risks

21、: goods loaded on board the shiplCost and obligation: the seller is paying for the necessary handling of goods until they are loaded onboard the vessel. lStrictly speaking, transfer of risks transfer of obligation and cost17The “C” terms （CFR, CIF, CPT, CIP）lShipment contractslSeller contract for ca

22、rriage on usual terms at his own expense.lCFR & CIF only for sea or inland waterway transportation modelUnder CIF and CIP, seller also takes out insurance and insurance cost.18The “C” terms （CFR, CIF, CPT, CIP）lTwo “critical” points Port (place) of shipment to which the buyer takes over the risk

23、sPort (place) of destination to which the seller is bound to arrange and bear the costs of a contract of carriage 19Cost and Freight ( named port of destination) l Shares every feature with FOB except for ocean freight chargel Freight at sellers cost Seller pay the normal transport cost for the carr

24、iage of the vessel by a usual route and in a customary manner to the agreed place Buyer take the risk of loss or damage to the goods and additional costs resulting from events occurring after the delivery of the goodsl Obligation: sellers responsibilityfor booking shipping space and getting goods re

25、ady for shipment in due time to notify to buyer about the delivery of goods (Shipping advice) so as to facilitate buyer to fulfill insurance procedures Note: notification is more important under CFR than under FOB and CIF20 Cost, Insurance and Freight ( named port of destination)lOne step forward fr

26、om CFRlInsurance born by seller Insurance for the buyerlThe seller pays for the insurance, but he does not take the risk of the cargo.Seller responsible for “min. coverage”lIf required by buyer and at buyers expense, additional coverage such as war, strike can be addedlSeller has no responsibility t

27、o guarantee the arrival of the goods at the destination.21CPT Carriage Paid to ( named place of destination)l CPT is similar to CFRl Differences:Mode of transportlCPT any mode lCFR Sea or Inland Waterway Delivery point l CPT inland place or port of shipmentl CFR port of shipment Transfer of risksl C

28、PT goods delivered to carrier l CFR goods loaded on board the ship22CIP Carriage and Insurance Paid to ( named place of destination) l CIP is similar to CIFl Differences:Mode of transportl CIP any mode l CIF sea or inland waterway Delivery point l CIP inland place or port of shipment l CIF port of s

29、hipment Transfer of risksl CIP goods at the disposal of carrier l CIF goods loaded on board the shipFreight and insurancel CIP whole journey freight and insurancel CIF ocean freight and insurance23The “D” terms （DAT, DAP, DDP）lArrival contracts seller bear all risks and costs in bringing the goods t

30、o the agreed place or point of destination at the border or within the country of import.lSellers responsibility max.lSeller responsible for both export and import customs clearance under DDP24DAT Delivered at Terminal ( named terminal at port or place of destination)lTerminal: the end of a railway

31、line, bus line, or the centre used by cargo departing for or arriving from.lDelivery point: at the nominated terminallTransfer of risks: at the nominated terminallNote: The goods are unloaded from the transporting vehicle.25DAP Delivered at Place( named place of destination)l DAP similar to CPTl Dif

32、ferences: Place of deliveryl DAP port of destination, CPT the first carrier Transfer of risksl DAP the seller bears all risks involved in bringing the goods to the named destination.l CPT goods pass over to the first carrier26lDDP sellers obligation max.: seller provides a “door-to-door” delivery an

33、d bears the entire risk of loss until the goods are placed in the buyers premises. lSeller is also responsible for import customs clearance and other payments of domestic duties in the importing countrylApplied unless the seller has the resources and capability to handle all the procedures.DDP Deliv

34、ered Duty Paid ( named place of destination)27Trade TermsPlace of DeliveryDivision of RisksEx. clearanceContract of Im. clearanceMode of transportcarriageinsuranceEXWSellers premisesGoods at the disposal of buyerBBBBAny modeFCAInland place or port of shipmentGoods at the disposal of carrierSBBBAny m

35、odeFASPort of shipmentGoods placed alongside the vesselSBBBSea or inland waterwayFOBPort of shipmentGoods pass the ships railSBBBSea or inland waterwayCFRPort of shipmentGoods pass the ships railSSBBSea or inland waterwayCIFPort of shipmentGoods pass the ships railSSSBSea or inland waterwayCPTInland

36、 place or port of shipmentGoods at the disposal of carrierSSBBAny modeCIPInland place or port of shipmentGoods at the disposal of carrierSSSBAny modeDATTerminal at port or place of destinationGoods unloaded, at the disposal of buyerSSSBAny modeDAPInland place or port of destinationGoods not unloaded

37、, at the disposal of buyerSSSBAny modeDDPInland place in the importing countryGoods at the disposal of buyerSSSSAny modeIntercoms 2010 Group Analysis28Variant l FOB Liner Terms (FOB班輪條件）l FOB Under Tackle (FOB吊鉤下交貨） l FOB Stowed & Trimmed (FOB理艙，平艙費(fèi)在內(nèi)）l CFR/CIF Liner Terms （班輪條件）l CFR/CIF Landed

38、 （卸至碼頭）l CFR/CIF Ex Tackle （吊鉤下交接）l CFR/CIF Ex Ships Hold （艙底交接）Seller pays: LeastMostMostLeast29Important NoteThe variant of transport cost bearing DOES NOT change the nature of the term: the risk implication remains same all the time. 302.3 Application issues2.3.1 Customs Clearance Referring to bo

39、th the payment of duty and the performance of any administrative matters EXW - buyers for both import and export customs clearance DDP - sellers for both import and export customs clearance For other terms, buyers for import customs clearance while sellers for export customs clearance 312.3 Applicat

40、ion issues2.3.2 Quality Confirmation Sellers expense to cover checking operations: quality control during the production, measuring, weighing and counting a the time of delivery Buyers necessity to inspect the goods before taking delivery, hence he must pay pre-shipment inspection Seller pay any cos

41、ts of inspections mandated by the local authorities which is normally part of customs clearance 322.3 Application issues2.3.3 Shipment Notice The party arranges shipment shall provide his counterpart with sufficient notice related to the transportation. Necessary information include: the name of the

42、 carrier, the mode of transport, the date or period for delivery, etc. Inability to provide sufficient and prompt shipment notice to the counterpart may lead to the failure of transfer or advanced transfer of risk. Notification is especially significant under CFR.332.3 Application issues2.3.4 Shipme

43、nt Contract term vs. Arrival Contract termShipment contract term: lUnder which the delivery will happen at the time or before the time of shipment lseller not responsible for loss or risk of goods being carried after the time of shipment Arrival Contract term: lWhich specifies the seller to deliver at the time of arrival lseller responsible for all