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Advisory

  • Incoterm 2000, the share of trade conditions into 4 groups, understand and distinguish between these groups, and it is important to remember that this application is not easy. First, there are 4 groups, remember the "You Are Taking fai" - the beginning of verse 4 is 4 incorterm trading conditions in 2000: E, F, C, D. Now we go into specific groups:

    1. Group E-EXW-Ex Works

Incoterm 2000, the share of trade conditions into 4 groups, understand and distinguish between these groups, and it is important to remember that this application is not easy. First, there are 4 groups, remember the "You Are Taking fai" - the beginning of verse 4 is 4 incorterm trading conditions in 2000: E, F, C, D. Now we go into specific groups: 

1. Group E-EXW-Ex Works 

Now I have an item I want to sell and do not assume any responsibility for such shipments from export permit to hire transportation, charter ... means a little lazy and not responsible what is the procedure that conditions E group. So then, when I want to sell and do not want to remember what procedures to group E 

2. Group F 

In group 3 group F is FOB, FCA, FAS. So the key to remember when you need to group F is how? Keep in mind that F is free is not responsible for, so do not take responsibility for anything, not responsible for the transport from the loading port to the discharge port. That is the basic definition of group F. 

So what is the basis for discrimination, divided into 3 groups FCA, FAS, FOB. Please reply, the facility is responsible for transport of goods from the seller to the base of the vessel: 

2.1. FCA 

Just loading onto transport means buyers sent to consignee if the position is located in the base of buyers. After loading up my means of transportation is the responsibility of all. 

For example, I sell 2 containers of lighting conditions according to the U.S. FCA, my production facility in Tan Binh District. If I delivered in Tan Binh district basis, then I have to rent a forklift to move goods to vehicles purchased by the dedicated container sent. 

Take the case, is sold on the terms FCA, but delivered in entrepot in such Newport, this time to the shipping container car buyers by sending dedicated to, the buyer must take care of themselves. It sounds unfair, in fact, the seller has to transport goods to entrepôt then nothing. This is beneficial for exporters, more sales, have gathered every possible position. 

How to remember the basic properties of the FCA group? - Me to FCA remember from C-Carrier, Carrier Free - Free shipping responsibilities, is what is meant analyzed on 

2.2 FAS 

This group, responsible for the sales, the higher the FCA group, that is not delivered or produced at the facility as the transit point for the seller to hire transport to take the goods placed alongside the ship. 

To remember this feature from Free Alongside remember - when Disclaimer ranked alongside the ship. 

2.3 FOB 

In our FAS is responsible for the delivery of the ship, so even if the loading of the ship from the ship, they accidentally break every star, who is responsible? Who pays the cost of shipment? Answer the questions on the FOB. 

So remember FOB, remember our responsibility is to be delivered to the ship, that is responsible for hoisting on board. From Free on board say it - Disclaimer when delivered on board. 

So in terms of group F, remember: 

1. Responsibility increasing transportation: 

--------- >>> --------- >>> FCA FAS FOB 

2. Bear the cost of export procedures, pay taxes and export fees. 

So from group E, I just stop delivery, buyers also how they want to do. To group F and responsibilities have increased a little, ie referring to transportation responsibility. 

What is even more so? It is always assumed transport to the port of discharge to the buyer. When thinking of chartering and transportation from port to port going to remember to group C. Certainly from group C is reminiscent of freight cost from 

3. Group C 

Thus, it comes to group C, is said to cost more sellers would worry more ships from hiring, to the transportation and loading, as well as coverage for risks during transportation. And these properties are also the basis for distinguishing the conditions in Group C 

CFR 3.1 

Simply sellers incur additional transportation costs to port of discharge, and discharge costs borne by the buyer if there is agreement. 

CFR = FOB + F (Freight) 

 

3.2 CIF 

The process of buying transportation from port to port is sold subject to the seller and if along the way but, unfortunately damaged goods, why? Obviously need to buy cargo insurance. So besides the CIF CFR same seller must buy insurance. Often insurance at minimum FPA or ICC (C) -110% of the value of goods traded. 

The trick to remember the CIF group with other groups from I-Insurance-Coverage 

Price CIF = FOB + F (freight) + (CIF x R) = (FOB + F) / (1-R) 

There are now purchasing, clinical, although we were shipping to the port but they are not satisfied, we want to switch companies or their designated locations situated inland, thus incurring CPT, CIP 

3.3 CPT 

CPT = CFR + F (Freight from port of discharge to the receiving location specified by the seller). 

Best feature is that it's CPT, CFR identical, besides additional shipping charges from port of discharge to the receiving location designated by Seller 

3.4 CIP 

CIP = CIF + (I + F) (Freight and insurance from port of discharge to the receiving location designated by Seller) 

+ I = CPT (Carriage insurance from port of discharge to the receiving location designated by Seller) 

Thus, in group C, with the following note: 

Responsibilities import procedures, pay taxes and import fees of the purchaser. 

Responsibilities sellers ascending CIF CFR ------- >>> ------- >>> ------- >>> CPT CIP 

CIF, CFR applies only means of water transport 

CPT, CIP application of rail, road, air, and multimodal transport 

I see three groups are quite enough but why add group D? 

The answer is there are conditions that require delivery, it is not in any condition in the above groups, or to apply the above conditions but is accompanied by the additional terms. 

For example: Example 1: The company sells Vietnam in Phu Tho dry cloth for drying presses China through Lang Son border gate, the Chinese conditions is required on delivery for China trucks at the border, the transportation, car rental point on the boundary is defined by the company to undertake Vietnam, and the loading and unloading from the truck to the delivery point, the Chinese side will worry. 

Then I check, the provision applies, in groups E, F, C, but we have learned not okay: 

Group E: Absolutely not, require delivery in Lang Son border gate, which fabric is collected in Phu Tho, according to E if the only delivery company in Vietnam Phu Tho only. 

Group F: FCA: No, because the Chinese side agrees not to make car rental Turkish government took fabric. 

FAS: No, this condition applies only means of water transport 

FOB: No, this condition applies only means of water transport 

Group C: 

CFR: No, this condition applies only means of water transport 

CIF: No, this condition applies only means of water transport 

CPT: Sounds, but CPT is the first purchase the leased transport cargo to the warehouse for sale from the port of discharge, but in China it only requires delivery at the border, no need to go anywhere transport both, the unloading and transfer to the warehouse they will worry 

CIP: The same is not applicable CPT. 

 

Example 2: 

A company Vietnam's seafood export frozen shrimp to the Japanese, the Japanese side requested for delivery at the port of Kobe for them, even down to the loading will take care of them, just put Vietnam behind the cargo ship Kobe port is safe. 

In this case, it is clear that the conditions applicable CFR, but 

With the CFR, the seller must ensure safety after row over the ship's rail at the port of arrival. 

And in this case, Japanese photography businesses will take care of, you just need to put Vietnam goods safe and secure every port located on the ship's safe. So, if you want to apply the CFR, to sign a side agreement that Vietnam only be brought safely to port customers and ensure customer safety is located on the ship. So in foreign commercial contract must be. 

Assumptions: 

1.Tham CFR reference, Incoterms 2000 

2 ....... 

3 ........ 

Other terms: 

Vietnam 1.Phia only be brought safely to port customers and ensure goods are safely aboard 

2 .......... 

So the first key terms and other terms and conditions mutually contradictory principles that contract terms are not mutually negative. 

Through two examples above, we see the need for group D 

4. Group D 

1. DAF 

The trick is Frontier F-word, which means border delivery, and the buyer will handle the unloading. In trading cross-border trade, this provision applies 

2. DES 

Safe delivery on board at the port of discharge, the discharge will handle the purchase. Clearly, risk transfer venue than FOB, CFR, CIF is not railing at the port to which the vessel is scholarships. DES: Remembering words ES: Ex Ships 

3. DEQ 

DEQ must put safety regulations at the wharf. So it is different from where CFR? also request shipment to the port of destination, unloaded expense. The problem here is something different risks: risks CFR switch location is the rail, ie after crane shot over the ship's rail, accidentally fell into line, breaking up ... then the CFR, the sale no longer responsible. 

And with DEQ, the seller shall be liable until the goods have been placed safely onto the jetty. Compared with DES are: 

DEQ = DES + unloading + cost of risk in the process of unloading 

And the word EQ - Ex Quay - at the wharf, this implies 

4. DDU 

Responsible for bringing the goods to the specified destination. Indeed, very similar DDU CFR and CPT same, and yet there are still DEQ DIFFERENCE: 

CFR: Apply to sea 

DEQ: Well all means but only delivery at wharf 

CPT: Well, applies to all means of transport to the destination and always, looks very similar to the DDU DDU but sellers do not import clearance procedures and not unloaded from transport to and if people buy incidents risk when making the procedures for import clearance, the buyer will bear all costs and risks arising 

5.DDP: DDU Identical, except the seller must always take risks when buyers risk when the import customs clearance procedures. Assume the export tax increase, buyers will chiu.Den here we see the problem very clearly indeed, assuming the company Vietnam import shipments pesticide plant from America, and companies do not have Vietnam experience in organizing transportation of dangerous goods, the exporter must request transportation to the company's facility in Dong Nai.Neu shipment pesticides on the list of goods to be imported and many businesses now entered earlier, the company knew the simple procedures. In this case the company will sign CPT.Nhung if this shipment, never joined before, but the business situation that the company wants to enter the fold, and in the time line, the company will run the customs procedure concerned. Of course, the seller will bear the risk, no entry is missing, it will happen. Of course, VN businesses will bear the risk that, if not take care of customs procedures. In this case, DDU procedures. 

And if the company still wants to enter Vietnam shipment but do not be afraid of the customs procedures and do not want to bear this risk. While U.S. exporters to have a relationship with another company in Vietnam is strong and good relations to import documents and they will definitely take care procedures, if they will take the risk Vietnamese company Men will sign the contract in accordance with the actual conditions DDP.Trong, transport by water or DES DEQ typically applied assigned depending on the wharf or flaking for DDU and DDP. 

1.Trach means hired transport. 

Groups E, F: people buy. Place of delivery at the destination. 

Groups C, D: seller. Delivery Location where to go. 

6 applies only to conditions for sea transport: FAS, FOB, CFR, CIF, DES, DEQ: delivery locations are seaports. 

2.Trach responsibility to purchase insurance for the goods. 

Groups E, F: people buy. 

Group D: seller. 

Group C: 

CIF, CIP: seller. 

CFR, CPT: people buy. 

3.Trach duty of customs procedures for goods. 

Export: 

EXW: people buy. 

12 remaining conditions: seller. 

Imports: 

DDP: seller. 

Conditions remaining 12 buyers. 

Some notes Icoterms using: 

1. Incoterms only applies to foreign trade contracts that do not apply to domestic trade contracts. 

2. Incoterms applies only to the sale of goods contract format material (tangible), do not apply to non-material goods (invisible). 

3. Terms of Incoterms rules: 

Incoterms born in 1936 through amendments 6 and 7 have the same value. 

When applying Incoterms, the parties may agree to add other provisions contrary to Incoterms. 

Incoterms issued by the ICC, the parties referred to in the contract but not implicitly mean that ICC arbitration disputes. 

4. Incoterms can not substitute for international sales contracts, it's just a part of international sales contracts. 

5. Restrict use practices, business practices formed spontaneously in trading activities. 

6. In the case of container cargo by water transport use, so choose terms FCA, CPT, CIP instead of FOB, CFR, CIF. 

7. Should be selected in terms Incoterms stars for Vietnam enterprises gain chartering and insuring the goods. 

 

 

(According http://vietship.vn/showthread.php?t=4421)