The Incoterms is a group of definitions created by the International Chamber of Commerce. They came into force in 1990 and were renewed in the year 2000. They grant the business community clear concepts in order to limit the responsibilities of both the buyer and the seller in the operations between different states.

This terminology balances and conditions the terms of the purchase and sales operations so as to make it possible to exchange goods between businessmen from different countries. With the common usage of such vocabulary, the responsibilities and rights of both parties will be protected whenever they have to settle possible controversies. The publication of these concepts is done by the International Chamber of Commerce and what follows is a brief summary of the same.

EXW (Ex Works – In factory)
The title and risk are transferred to the buyer, including payment of all transport and insurance costs from the seller’s door. Used for any mode of transport.

FCA (Free Carrier – Carrier Franc)
The title and risk are transferred to the buyer, including transportation costs and insurance when the seller delivers the goods authorized for export to the carrier. The seller is obliged to load the goods in the unloaded buyer’s collection vehicle.

FAS (Free Alongside Ship – Free Ship Next)
The title and risk are transferred to the buyer, including payment of all transport and insurance costs, once delivered by the seller by the seller. Used for maritime transport or by waterways. The obligation of export clearance rests with the seller.

FOB (Free On Board – Frank on board)
Pass risk to the buyer, including payment of all transportation and insurance costs once the seller has delivered them on board the shit. Used for shipping or inland waterways.

CFR (Cost And Freight – Cost and freight)
The title, risk and cost of insurance pass to the buyer when the seller delivers it on board the ship and pays the cost of transportation to the port of destination. Used for shipping or inland waterways.

CIF (Cost, Insurance And Freight – Costo, Seguro y Flete)
The title and risk pass to the buyer when the seller delivers them on board the ship and pays the cost of transport and insurance to the port of destination. Used for shipping or inland waterways.

CPT (Carrier Paid To – Transporte Pagado Hasta)
The title, risk and cost of insurance pass to the buyer when the seller delivers it to the carrier and pays the cost of transportation to the destination. Used for any mode of transport.

CIP (Carrier and Insurance Paid To – Transporte y Seguro Pagado Hasta)
The title and risk are transferred to the buyer when the seller delivers them to the carrier, who pays transportation costs and insurance to the destination. Used for any mode of transport.

DAF (Delivered At Frontier – Entrega en Frontera)
The title, risk and responsibility of the import clearance are transferred to the buyer when the seller delivers them to the designated border point. Used for any mode of transport.

DES (Delivered Ex Ship – Entrega sobre Buque)
The title, the risk, the responsibility of the unloading of the ship and the import clearance pass to the buyer when the seller delivers the goods on board the ship to the port of destination. Used for shipping or inland waterways.

DEQ (Delivered Ex Quay – Entrega en Muelle)
The title and risk are transferred to the buyer when delivered on board the ship at the point of destination by the seller who delivers the goods at the dock at the destination point authorized for importation. Used for shipping or inland waterways.

DDU (Delivered Duty Unpaid – Entrega, Derechos No Pagados)
The seller fulfills his obligation when the goods have been made available in the place designated in the country of importation.

DDP (Delivered Duty Paid – Entrega, Derechos Pagados)
The title and risk pass to the buyer when the seller delivers the goods to the designated destination point that was dispatched for import. Used for any mode of transport.