Incoterms Basics
What do Incoterms stand for?
International Commercial Terms
What does the term "EXW" stand for and what does it mean?
Ex Works; The buyer is responsible for picking up goods from the seller's premises and bears all costs and risks involved.
Which Incoterm places the highest responsibility and risk on the seller?
DDP (Delivered Duty Paid)
What is the difference between "F" and "C" Incoterms?
The "F" terms are usually used for sea and inland waterway transport, while the "C" terms are used for all modes of transport.
What is the purpose of Incoterms in regards to language barriers in international trade?
They help eliminate miscommunication and misunderstandings by providing clear terms that can be universally understood.
What is the purpose of Incoterms?
To provide a set of standard rules for the interpretation of the most commonly used trade terms in international trade.
Or
To clearly define the responsibilities, costs, and risks between buyers and sellers in international trade.
Which Incoterm places the highest responsibility and risk on the buyer?
EXW (Ex Works)
Under which Incoterm is the seller responsible for delivering the goods to a specific named place (usually their premises)?
Ex Works
Which Incoterms are suitable for any mode or modes of transport?
EXW, FCA, CPT, CIP, DAP, DDP.
(FAS, FOB, CFR, and CIF are strictly for sea/inland waterway).
How often are Incoterms updated?
Approximately every 10 years.
How many Incoterms are there in Incoterms 2020?
11
Which Incoterm requires the seller to clear goods for export but not for import?
FCA (Free Carrier)
Which Incoterm requires the seller to deliver the goods, cleared for export, to the carrier nominated by the buyer?
FCA (Free Carrier)
Which Incoterm requires the seller to arrange and pay for insurance coverage?
CIF (Cost, Insurance, and Freight)
and
CIP (Carriage And Insurance Paid To)
Which international organization publishes and maintains the Incoterms rules?
International Chamber of Commerce (ICC)
Which party arranges and pays for the main carriage in the FCA Incoterm?
The buyer
Under which Incoterm does the buyer assume the risk after the goods have been delivered to the carrier?
FCA (Free Carrier)
Under which Incoterm does the seller bear the risk until the goods are on board the vessel at the named port of shipment?
FOB (Free on Board)
True or False: Under the DDP Incoterm, the seller is responsible for import clearance and duties.
True
What is the main difference between Incoterms 2020 and previous versions?
DAT was renamed to DPU (Delivered at Place Unloaded).
Listing of costs was consolidated into a single article.
Increased security requirements and transport arrangements using own means of transport were clarified.
True or False: Incoterms 2020 includes a new Incoterm called "CNI" (Cost and Insurance).
False
Which Incoterm means that the seller delivers the goods, cleared for export, to the buyer at a named place?
DAP (Delivered at Place)
True or False: Under the CPT Incoterm, the seller is responsible for coordinating the main carriage and paying for it.
True
Which Incoterm(s) specifically state that the risk passes from seller to buyer at the port of loading?
FAS (Free Alongside Ship), FOB (Free on Board), CFR (Cost and Freight) and CIF (Cost, Insurance and Freight).
True or False: Incoterms 2020 provide guidance on the transfer of ownership of goods.
False, Incoterms do not address ownership transfer, only risk and responsibility.