Incoterms are official rules developed by the International Chamber of Commerce for the interpretation of terms that relate to domestic and international trade.
Incoterms (International commercial terms) is a list of international rules that provide an unambiguous interpretation of trade terms in export, as well as the moment transfer of responsibility from the exporter to the buyer. They are recognized by the government authorities, legal companies and merchants worldwide and are used to standardize delivery conditions.
Incoterms rules regulate:
- responsibilities of the exporter and the buyer;
- terms of product delivery;
- distribution between the exporter and the buyer
transport and other costs; - conditions for the transfer of risks that may
arise during the delivery of goods from the exporter to the buyer.
Incoterms terms divided into 4 groups:
- Group E – shipment This group is considered the most convenient for the exporter: obligation the exporter is only to deliver the goods to the importer in the agreed upon place
- Group F – basic transportation is not paid by the seller: the exporter delivers the goods to the point of transportation in accordance with buyer’s instructions.
- Group C – basic transportation is paid exporter: the seller must conclude a contract of transportation at his own expense and to pay the transport costs yourself.
- Group D – delivery. The exporter carries responsibility for delivery of goods to the border or to the country of import. All risks and delivery costs are borne by the seller.
