Dutch Connection

Transport prices 2008-1 valid from 1-1-08 / 31-12-2008

Incoterms™ 2000 - An Introduction Disclaimer: The following information is intended as only an introduction to the topic and should not be used as the sole source for determining contractual Incoterms™. The topic of Incoterms™ and the explanation of terms presented below has been summarized. As such, a full understanding of the topic will require researching additional information.

Additional information is available from the International Chamber of Commerce Publication ICC Guide to Incoterms™ 2000 and the ICC official rules, Incoterms™ 2000. It is recommended to obtain legal council before negotiating any contractual terms. The feasibility of any transaction (profit) requires exporters and importers to understand the costs and risks associated with any international transaction: responsibility for shipping costs, purchasing insurance, customs clearance and duties, etc. If something should go wrong during transportation (risk), who has title to the goods? What obligations did each of the parties agree to? These issues will matter greatly! Incoterms™ are internationally accepted commercial trade terms which determine the passing of risk and the passing of costs under an international contract of sale. The terms tell each party to the contact what their obligations are for the carriage of goods from the seller to the buyer, for insurance and export and import clearances. In addition, should a dispute arise, Incoterms™ are the only international trade terms recognized in a court of law. It is strongly recommended that express reference is made in the contract using the words “Incoterms 2000" to avoid confusion with any previous version of Incoterms™. There are 13 Incoterms™ and they are divided into four major groups: “E”, “F”, “C” and “D” terms. The first letter is an indication of the group to which the term belongs. Each group means additional responsibilities and costs for the exporter. For example, the most commonly used terms under each of these groups are: Ex Works (EXW), Free Alongside Ship (FAS), Free On Board (FOB), Cost and Freight (CFR), Cost, Insurance and Freight (CIF), and Delivered Duty Paid (DDP). NOTE: Incoterms™ have precise responsibilities for transaction costs and risks, and other Incoterms™ 2000 exist. Please consult “Incoterms™ 2000” and “ICC Guide to Incoterms™ 2000” available at The Business Link. Always seek professional assistance before using these terms in international negotiations.