Incoterms identify the physical point in the supply chain where risk of loss or damage passes from the seller to buyer. It also determines the point in the supply chain where responsibility for transportation and customs related costs shift from the seller to buyer. Finally, incoterms identify specific functional responsibilities between the seller and buyer related to the delivery of goods. In general it shows and regulates: * The division of costs * Point at which risk passes from seller to buyer Delivering and taking delivery of goods * Proof of delivery , transport documents or equivalent electronic message * When merchants conclude a contract for purchase and sale of goods, they are entitled to freely negotiate the special terms with regard to price, quantity, properties, etc. , as well as carriage, risks and surrender of the goods. Businesses involved in exports, however, are frequently faced with different interpretations of identical formula and national commercial practices.
To counteract the resulting imponderables, the parties to the contract can use what are known as Incoterms©, which offer a range of international rules for interpreting the main forms of contract used. Specifically, the Incoterm agreed by the parties determines which party is liable for the respective costs in the transport chain, for loading and unloading the goods and Customs clearance and at what point a party bears the risk of loss for an international shipment. Incoterms© also affect the basis on which the imported goods are valued for Customs. CFR – CIF – CIP – CPT – DAF – DEQ – DES – DDP – DDU – EXW – FAS – FCA – FOB * Incoterms© (International Commercial Terms) are devised by the International Chamber of Commerce in Paris and observed by the most important trading nations. All 13 Incoterms© currently used are listed and explained below according to the Vendor’s increasing responsibility. Use of these Incoterms© is voluntary and must be contractually agreed. The Incoterms© most frequently used in practice are “ex works”, “free on board”, “costs, insurance, freight” and “delivered duty paid”.
The Research paper on Correspondent Bank Goods Buyer Seller
... specifications of packing of goods If the parties use a C Incoterm, the buyer is usually responsible for costs associated with an inspection ... offset certain expenses of the ship operator); a War Risk (or Political Risk to offset a high insurance premium); a Congestion ... 5. Case Study: warehouse to warehouse insurance and the FOB point - where is delivery effected.CIF - seller exposed to claims for ...
For example: Cost, insurance, freight (CIF) The “cost, insurance, freight” (CIF) Incoterm can only be used if at least part of international carriage of the goods is by water. The seller (exporter) is responsible for transporting the goods from his place of business to the named port, loading onto the ship, clearing the goods for Customs in the exporting country and paying international freight costs and must also bear the corresponding carriage insurance in favour of the buyer (importer).
Title transfers when the goods are on the ship.
If the goods, which henceforth belong to the buyer, are damaged or stolen during international transportation, the buyer must assert his insurance claim on the basis of the insurance taken out in his favour by the seller. The buyer must bear the cost of Customs clearance, carriage and insuring the goods in the importing country. If the Customs valuation basis is “free on board” (FOB), the international insurance and freight costs must be deducted from the “cost, insurance and freight” (CIF) price.
The “cost, insurance, freight” Incoterm takes the form “CIF, named destination port”. If, for example, the goods are exported from Piraeus, the wording is “CIF, Piraeus”. 2. a) what are my risks? Risks of the buyer * Risk of not receiving goods on time, not receiving the right goods, or not receiving goods at all * Risk of short shipment * Inferior quality or counterfeit goods * Receiving damaged goods or goods damaged at transit * No warranty * Early / late shipment * Force majeure * Lack of foreign exchange * Failure of bank * Exchange rate fluctuation Trade embargoes How to mitigate the risks * Ask for company profile or check company backgrounds on each exporter * Negotiate into a contract of sales with each company * Choose the correct incoterms * If goods are sea freighted use a rule for sea and inland waterway transport only term such as CIF where The seller (exporter) is responsible for clearing the goods for export, loading the goods onto the vessel at the port of export and paying overseas freight and insurance charges, with the buyer named as the beneficiary in the insurance policy.
International Wine Trade Essay
Wine is considered to be one of the traditional drinks that became symbols of many countries. For instance, such countries as France, Italy, Argentina and some others are well-known as major wine producer and wine constitute not only a part of the local economy but also a part of the local culture. At the same time, wine trade was traditionally highly profitable since wine is one of the most ...
The title and risk pass to the buyer when the seller delivers the goods on board the ship. * If goods are air freighted use any mode of transport rule such as CIP * Both of these terms have insurance so that if loss or damages to goods during transport you will be covered well * Define and state well the following contractual terms * Goods (name, full description, brand ,model) * Terms of purchase, Incoterm * Price * Quality and quantity * Method of movement * Delivery dates * Delivery of documents * Insurance requirements Packing requirements * Marks, numbers and other instructions * Remedies to non performance, liquidated damages & penalty clauses * Termination provisions * Force majeure * Choice of law and arbitration * Payment methods, terms & conditions * use a low risk payment method through bank and low risk term such as collection documents against payment or documentary letter of credit * Warranty; its very useful to have minimum two years warranty specially when you are doing electronics business where you often find factory fault products. . What is the role of international chamber of commerce in international trade? ICC plays a major role in the development of international trade. It is one of the most influential international business organizations. The International Chamber of Commerce (ICC) was founded in 1919 to promote trade and investment worldwide. It operates in 130 countries and has 92 offices on all continents. It has three main activities: rules-setting, dispute resolution (under ICC arbitration rules) and policy advocacy. Some of ICCs role in international trade are:
The Term Paper on Trade Mark Franchisee Franchisor Business
Interest to this concept of economic interaction not casual. In spite of the fact that for many Russian businessmen the concept "franchising" still remains unfamiliar, today we observably practically universal use of its elements in various fields of activity. First of all, it is shown in active distribution of known trade marks. Franchising enables the franchisor to develop the network and to ...
Develop international trade by setting international rules and standards. For example * ICC Incoterms® are standard international trade definitions used every day in countless thousands of contracts * ICC model contracts make life easier for small companies that cannot afford big legal departments. * ICC’s Uniform Customs and Practice for Documentary Credits (UCP 600) are the rules that banks apply to finance billions of dollars worth of world trade every year. * Arbitration under the rules of the ICC International Court of Arbitration is on the increase.
Since 1999, the Court has received new cases at a rate of more than 500 a year It helps trade by giving practical serices to business, ICC activities cover a broad spectrum, from arbitration and dispute resolution to making the case for open trade and the market economy system, business self-regulation, fighting corruption or combating commercial crime. Promoting growth and prosperity ICC works with organizations like World Trade Organization, UN, the G8 and major news papers and radio TV channels for the development of world business. Spreading business expertise
Advocate for international business Practical services to business The first Uniform Customs and Practice for Documentary Credits came out in 1933 and the latest version, UCP 600, came into effect in July 2007. These rules are used by banks throughout the world. A supplement to UCP 600, called the eUCP, was added in 2002 to deal with the presentation of all electronic or part electronic documents. In 1936, the first nine Incoterms® were published, providing standard definitions of universally employed terms like Ex quay, CIF and FOB, and whenever necessary they are revised.
Incoterms® 2010 came into force on 1 January 2011. 4. “The usefulness of having thorough knowledge on International trade Terms in performing my role as a Customs officer – revenue collection, enforcement and trade facilitation” It is important for Customs officers to have a sound knowledge about international trade terms and transactions (ITT&T) for the following reasons: Revenue collection: INCOTERMS are used in contract of sale, Customs goods declaration, valuation, documentation and duty calculations. To properly collect duty customs officers must have the knowledge of ITT&T.
The Essay on Drug Trade Nations International Illicit
Illicit Drug TraffickingBackgroundDrug trafficking and illicit trade has proven to be a major problem that the international community faces as it enters into the twenty-first century. Currently the illegal drug trade market is one of the largest sectors of the modern global economy. Because of this fact, the drug trade is deeply rooted in many nations economic and social cultures, which makes it ...
Trade Facilitation: better understanding of ITT&T we can minimize misinterpretations, and verify legitimate valuations and apply risk management in our operations thereby improving trade facilitation Control: for commercial fraud investigations and drug law enforcement we analyse risk through analysing transactions, how it was made, which mode is used is it a credit or cash payment? How much. etc… to investigate these we should have knowledge of ITT&T. 10. delivering a personnel present to a friend through DHL
I would use DDP (delivered duty paid) where „Delivered Duty Paid“ means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.
