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Guidelines to using Incoterms:
Always specify which terms are applicable - i.e. FAS in Incoterms 2000 as apposed to Incoterms 1990
When completing documents, ensure that you are using the correct format of a term. The term C+F has never existed. Urge your trading partners to confirm their acceptance to the specified term in writing. Draw up a check list of your duties and rights under the selected term and check that every intended or completed transaction conforms to this list and that nothing is omitted. Request that your trading partner do the same and exchange this information with them. Change or add nothing but in any event as little as possible to the selected term. In case of any inevitable change or addition, inform your trading partner and request them to accept it in writing. Never instruct carriers or any third party to do or omit anything on the basis of the Incoterms which do not apply to them at all. Free on Board
FOB { + the named port of origin } Free On Board The delivery of the goods on board the vessel at the named port of origin (loading), at the sellers expense. The buyer is responsible for the main carriage/freight, cargo insurance, import Customs clearance and other costs and risks. Under the rules of the Incoterms 2000, the term FOB is used for ocean freight only. However in practice many importers and exporters still use the term FOB for air freight. In North America, the term FOB has other applications. Many buyers and sellers in Canada and the USA dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB Destination FOB Origin means that the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyers premises. This may include the import Customs clearance and payment of import Customs duties and taxes at the buyers country, depending on the agreement between the buyer and seller. In international trade avoid use the shipping terms FOB Origin and FOB Destination which are not part of the Incoterms. |
