The importance of INCOTERMS in International Trade

Our Office specializes, inter alia, in International Transportation Law. Before establishing her practice in Greece and training in Greek law, Mrs. Laura Convertini, Lawyer, was a legal counsel for a major logistics company in Italy, specializing in land, air and maritime international transportation and delivery. She gained extensive experience in the international transportation sector, which, combined with her subsequent specialization in Civil Procedure and International Law, allowed her to successfully handle international trade cases before Greek Courts.

The importance of INCOTERMS in international trade

When a contract is drawn up for buying or selling goods in international trade, each party is free to negotiate specific terms with regard to the price, quantity, characteristics, etc., as well as the mode of transport, the risks and the delivery of goods. However, companies involved in exports often have to deal with different interpretations of national commercial policies. In order to avoid any imponderables and ambiguities, the contracting parties may use terms, known as Incoterms, which offer a range of uniform international rules accepted by most countries. More specifically, Incoterms determine which party is held responsible for costs relating to goods transportation, loading, unloading and customs clearance, as well as to what extent each party shall bear all costs and risks of loss of an international freight. Moreover, Incoterms may, under certain circumstances, affect the basis for calculating the value of goods for customs clearance purposes.

CFR – CIF – CIP – CPT – DAF – DEQ – DES – DDP – DDU – EXW – FAS – FCA – FOB

Incoterms (International Commercial Terms) have been established by the International Chamber of Commerce in Paris and are observed in all important trading countries. All 13 Incoterms currently used are listed and explained below according to the Vendor’s extent of responsibility. The use of these Incoterms is optional and must be contractually agreed upon between parties. The Incoterms most frequently used in practice, are “ex works”, “free on board” and “CIF” (costs, insurance, freight).