INCOTERMS® 2020
The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. First published in 1936, the Incoterms rules have been periodically updated, with the ninth version—Incoterms 2020—that came to force Jan 01 2022.
Terms of delivery – INCOTERMS® 2020
The following terms of delivery are the most commonly used at/by Cavitar Ltd:
FCA FREE CARRIER
CPT CARRIAGE PAID TO
CIP CARRIAGE AND INSURANCE PAID TO
DAP DELIVERED AT PLACE
The responsibilities, costs and risks between Cavitar Ltd and the buyer are explained below.
To see the other terms of delivery and to find out more information on Incoterms® 2020:
ICC – INCOTERMS® 2010 – https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-2020/
Wikipedia – http://en.wikipedia.org/wiki/Incoterms
FCA – FREE CARRIER
FCA (named place of delivery)
FCA Tampere, Finland
Cavitar hands over the goods, having ordered the shipment and cleared for export (when applicable), into the disposal of the (first) carrier nominated by the buyer at the named place. Risk passes from Cavitar to the buyer when the goods are handed over to the first carrier. The buyer bares the risk and pays the carriage.
If buyer has not informed Cavitar on the buyer’s carrier account number by the time when the shipment takes place, the term of delivery will be automatically changed to CPT (see below). In this case Cavitar can choose the speed of transport. The costs of shipment will be invoiced to the buyer.
CPT – CARRIAGE PAID TO
CPT (named placed of destination)
CPT from Cavitar’s premises at Kuokkamaantie 4 A, Tampere Finland to (named place of destination)
Cavitar delivers the goods to the carrier nominated by Cavitar and clears the goods for export (when applicable). Risk transfers to buyer upon handing goods over to the first carrier, from which on the buyer bares all risks and any other costs (than the basic carriage ordered and paid by the seller) occurring after the goods have been so delivered.
Cavitar invoices the costs of shipment to the buyer.
CIP – CARRIAGE AND INSURANCE PAID TO
CIP (named place of destination)
CIP from Cavitar’s premises at Kuokkamaantie 4 A, Tampere Finland to (named place of destination)
Cavitar delivers the goods to the carrier nominated by Cavitar. Buyer bears all risks and any additional costs occurring after the goods have so been delivered. However, in CIP Cavitar contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
However, under CIP Cavitar is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with Cavitar or to make its own extra insurance arrangements.
The cost of insurance will be the agreed % of the CIP value. CIP value is 110 % of the whole sales value.
The costs of shipment and insurance will be invoiced to the buyer.
DAP – DELIVERED AT PLACE
DAP (…named place of destination) (Delivered At Place)
Cavitar delivers the goods to the buyer, not cleared for import, and not unloaded from any arriving means of transport at the named place of destination. Cavitar bears all the costs and risks involved in bringing the goods thereto, other than, where applicable, any “duty” (which term includes the responsibility for and the risks of the carrying out of customs formalities, and the payment of formalities, customs duties, taxes and other charges) for import in the country of destination. Such “duty” has to be borne by the buyer as well as any costs and risks caused by his failure to clear the goods for import in time.
The costs of shipping and insurance will be invoiced to the buyer (unless they are already included to the sales value).
The named place of destination has to be known by Cavitar by the time the sale becomes valid, i.e. when Cavitar sends order confirmation to the buyer. If the destination changes after this, the costs of shipping and insurance will change accordingly.
