1. Pre-shipment term -EXW

EXW — Ex Warehouse factory

Delivery is completed when the Seller places the goods at the disposal of the Buyer at its place or other designated place (such as a factory, factory or warehouse) and the Seller does not clear the goods for export or load the goods on any means of transport.

Place of delivery: place of seller in the exporting country;

Risk transfer: delivery of goods to buyer;

Export customs clearance: buyer;

Export tax: buyer;

Applicable mode of transport: any mode

Do EXW with the customer to consider the issue of value-added tax!

2.  Pre-shipment term -FOB

FOB (FREE ON BOARD….  Free on board Named port of shipment. ）

In adopting this trade term, the seller shall fulfil its obligation to deliver the goods on board the vessel appointed by the buyer at the port of loading specified in the contract and at the time specified.

The expenses and risks borne by the buyer and the seller in relation to the goods shall be limited to the loading of the goods on board the vessel dispatched by the Seller at the port of shipment, and the risks of damage or loss of the goods shall pass from the Seller to the buyer.  The risks and expenses of the goods before loading at the port of shipment shall be borne by the seller and shall be transferred to the buyer after loading.  Fob terms require the seller to be responsible for the export clearance procedures, including applying for export license, customs declaration and paying export duties, etc

3.  Term before shipment -CFR

CFR (COST AND FREIGHT…  Named Port of destination formerly abbreviated C&F), COST & Freight

Using the trade terms, the seller should be responsible for to enter into a contract of carriage, the time as stipulated in the sales contract in the ship the goods to the port of shipment on board and pay the freight on the goods can be shipped to the destination, but the goods at the port of loading the goods shipped after all risks of loss of or damage to, and caused by accidental events all additional costs shall be borne by the buyer.  This is different from the term “free on board”.

4.  Pre-shipment term -C&I

C&I (Cost and Insurance Terms) is an amorphous international trade term.

The usual practice is that the buyer and the seller contract on FOB terms, provided that the insurance is to be covered by the seller.

Using the trade terms, the seller should be responsible for to enter into a contract of carriage, the time as stipulated in the sales contract on the ship the goods to the port of shipment and the insurance premium of pay for the goods can be shipped to the destination, but the goods at the port of loading the goods shipped after all risks of loss of or damage to, and caused by accidental events all additional costs shall be borne by the buyer.

5.  Term before shipment -CIF

CIF (COST INSURANCE AND FREIGHT Named Port of destination

When using the trade terms, the seller in addition to bear the same as the “cost and freight (CFR) obligations, should also be responsible for lost cargo transportation insurance and pay insurance premium, but the seller’s obligation is limited to insure against the lowest insurance risks, namely, free from particular average, as to the risk of the goods with” cost and freight (CFR) and “free on board (FOB) condition is the same,  The seller transfers the goods to the buyer after they are loaded on board at the port of shipment.

Note: under CIF terms, the insurance is bought by the seller while the risk is borne by the buyer. In case of accidental claim, the buyer will apply for compensation.

6.  Pre-shipment terms

The risks of FOB, C&I, CFR and CIF goods are all transferred from the seller to the buyer at the place of delivery in the exporting country. The risks of goods in transit are all borne by the buyer. Therefore, they belong to the SHIPMENT CONTRACT rather than the ARRIVAL CONTRACT.

7.  Terms on Arrival -DDU (DAP)

DDU: Post Duty Permits (…  Named “delivered duty unpaid”.  Specify destination)”.

Refers to the seller will be ready goods, at the place designated by the importing country delivery, and must bear all the costs and risks of transporting the goods to the designated place (excluding customs duties, taxes and other official fees payable at the time of import), in addition to bear the costs and risks of customs formalities.  The buyer shall bear the additional costs and risks arising from the failure to clear the goods in time.

Extended concept:

DAP(Delivered at place(Insert named place of destination))  (Incoterms2010 or Incoterms2010)

The above terms apply to all modes of transport.

8.  Term after arrival -DDP

DDP: Short for Delivered Duty Paid (Insert named place of Destination).

Refers to the seller in the designated destination, will not unload the goods to the buyer on the means of transport, bear all the risks and costs of transporting the goods to the destination, handle import customs clearance procedures, pay import “taxes”, that is, complete the delivery obligation.  The seller may also ask the buyer for assistance in handling the import customs clearance procedures, but the expenses and risks shall still be borne by the seller.  The buyer shall give the Seller all assistance in obtaining import licenses or other official documents necessary for import.  If the parties wish to exclude from the seller’s obligations some charges (VAT, for example) incurred at the time of import, shall be specified in the contract.

The DDP term applies to all modes of transport.

The seller bears the greatest liability, expense and risk in DDP terms.

9.  Term after arrival -DDP

Under normal circumstances, the buyer will not require the seller to do DDP or DDU (DAP (Incoterms2010)), because the seller, as a foreign party, is not familiar with the domestic customs clearance environment and national policies, which will inevitably lead to many unnecessary costs in the customs clearance process, and these costs will definitely be transferred to the buyer, so the buyer usually does CIF at most