International Trade Terms
Trade terms, also known as the price terms, price conditions. It is the price terms in international trade constituted an important component. In external quotes and contracts, related to pricing issues, which are indispensable elements. It consists of exporting countries trade terms / importing countries trade terms
The exporting country for delivery in three groups of Trade Terms
1, E group E.W.X., ex factory.
2, F group FCA, cargo the carrier; FAS, FAS port of shipment; FOB, FOB port of shipment.
3, C group CFR, cost and freight; CIF, Cost Insurance and Freight; CPT, Carriage Paid to (named place of destination); CIP, freight insurance paid to (named place of destination).
Delivery in the importing country's trade terms there are five:
1, D.A.F., border delivery;
2, D.E.S., FOB the port of destination;
3, D.E.Q., the purpose of Port delivery;
4, D.D.V., DDU;
5, D.D.P., Delivered Duty Paid.
Here's what the most frequently used in international trade, the two delivery methods of trade terms FOB and CIF:
First, FOB port of shipment (FOB)
English is: Free on Board.
FOB port of shipment in international trade terms commonly used in the price of one. The seller is the basic obligations under the contract and provisions of the port of shipment within the time limit will be assigned to the buyer the goods loaded on ships, and promptly notify the buyer. When the shipment of goods across the ship's rail, the risk that is transferred from the seller to the buyer. The buyer is responsible for booking a charter, the payment of freight, and shipping schedules, name of ship promptly notify the seller. The goods across the ship's rail at the port of shipment after the other responsibilities, the burden of costs by the buyer, including those to obtain the import license or other official documents, as well as processing of goods entry formalities and costs. If the buyer nominates a vessel, but failed to timely name, date of loading berths and shipping notice to the seller or the buyer assigned to the vessel failed to arrive on time, or failure to carry goods, or in the specified period of time before the end of cut-off loading, The buyer must bear all the risks and losses. Provided that the goods have been clearly separated or fixed for the supply of this contract only.
In the FOB conditions, the seller must own risk and cost of an export license or other official documents, and is responsible for export formalities. The seller also has to provide at their own expense to prove that he has completed the obligation to deliver the required documents. In the buyer's request, by the buyer's risk and expense of the case, the seller may be given every assistance to obtain a single bill of lading or other transport.
FOB prices according to the transaction, if we adopt the liner transport, shipping costs included in the liner freight rate, and all relevant shipping costs will surely be responsible for handling transportation matters, the buyer. Whereas if we adopt the charter process, in accordance with maritime practice, usually stipulated in the charter ship does not pay for shipping costs. In this case, the buyers and sellers should be clear in the contract shipment, stowed, trimmed the cost burden. Buyers and sellers in order to avoid the burden of the cost of shipment such as the issue of a dispute, we tend to add in the FOB after various additional conditions, which resulted in the deformation of FOB. They are the following several forms.
1, FOBLiner teame (liner condition), Nian-yi is the cost of shipment handled in accordance with the practice of liner. That is, the seller does not pay these charges, the buyer by the ship is actually affordable.
2, FOBUnder Tackle (hook deliveries), which is defined as the seller is only responsible for the goods to the buyer handed hook reach of the vessel assigned to the Department, after the shipment cost estimates of the burden by the buyer.
3, FOBStowed (stowed, including costs) this condition means that the seller is responsible for the goods to be handed into the cabin, and the burden of Stowed costs, including costs of installation.
4, FOBTrimmed (flat space, including costs) This means that the seller is responsible for the goods into the cabin, and in order to maintain a smooth hull, right into the cabin of bulk goods Tianpingbuqi, these fees are the vendor.
〖〗 Incoterms International Trade and the definition of〗 〖American Foreign Trade
The export formalities and the payment of the FOB are very different classification. So, in practice need to take extra precautions.
Second, freight, insurance, including price (CIF)
CIF is also commonly used in international trade, the price terms. Adoption of this trade terms, the basic obligation of the seller is responsible for chartering the usual conditions of booking, pay the freight to the port of destination, and the port of shipment specified and within the period provided the goods are loaded on board. Promptly notify the buyer after shipment. The seller is responsible for handling from the port of shipment to the destination of a marine cargo insurance, pay insurance premiums. In business, there are called CIF as "CIF" In fact, according to CIF terms of transaction, the seller is still in the port of shipment to complete the delivery, the seller is also risk in the port of shipment, the goods pass the ship before the risk of flight. Across the ship's side after the buyer's risk. Loading of the goods from the port of shipment to the port of freight, insurance premiums, other than the cost will be affordable by the buyer. In addition, the buyer's own risk and expense but also to obtain the import license or other official documents, handle import procedures in accordance with the contract purchase price.
Sellers need to provide the documents are: commercial invoice or a corresponding electronic data; if necessary, to provide evidence for the goods in line with the contract documents: the usual transport document, enable the buyer to accept delivery at the destination, or through the transfer of documents the sale of goods in transit; the seller to provide conformity with the contract of insurance documents, so the buyer can do it the document directly to the insurer claims. In addition, the seller must own risk and expense to obtain an export license or other official documents, and is responsible for export formalities.
CIF price terms of a "symbolic delivery" approach (Symtolie Delivery). The so-called "symbolic delivery" means that the seller under the contract according to the port of shipment the goods are loaded and to submit a full set of compliance documents, even if the completion of its delivery obligation, without the need to ensure arrival. Conversely, if the seller of the documents submitted by not conform to requirements, even if the arrival of a qualified cargo security, but also finished the conditions is not closing, the seller of the documents to be submitted the name, content and number of copies should be in line with the agreement, otherwise, the buyer the right to reject documents , refused to pay the purchase price.