INCOTERMS

Incoterms

Incoterms mean international standard trade terms that determine responsibility for the delivery and risks of goods and services in international trade. Incoterms are a set of abbreviations published by the International Chamber of Commerce (ICC) and accepted worldwide.

Incoterms terms determine the delivery conditions agreed between the seller and the buyer and at what stage the responsibilities change as a result. These terms may also determine transportation costs and insurance liability for the goods.

Incoterms terms are expressed by abbreviations such as FOB, CIF, EXW, DDP and DAP, and each defines a specific delivery term. For example, the term FOB (Free on Board) means that the seller’s responsibility changes at the point when he loads the goods on the ship and the buyer unloads the goods from the ship, while the term CIF (Cost, Insurance and Freight) means that the seller undertakes the transportation costs and insurance premiums of the goods.

Incoterms terms are used in international trade to reduce uncertainties regarding the delivery of goods and services and to prevent disputes between parties.