Much like Customs Regimes, these are a key piece to the customs puzzle! Put simply, an Incoterm defines the responsibilities of sellers and buyers in terms of who needs to manage and pay for the duty, VAT, insurance, freight and clearance costs of the import/export goods.
There are 11 internationally recognised Incoterms that you may come across, but these are the five most commonly used ones:
- EXW (Ex-Works): a seller makes goods available to a buyer, who then pays for transport costs
- CIF (Cost, Insurance, Freight): applies to ocean or inland waterway transport whereby the seller assumes responsibility for all three elements
- DDP (Delivered Duty Paid): seller assumes all responsibilities and costs for delivering the goods to the named place of destination
- DAP (Delivered at Place): the seller is responsible for delivery of the goods, ready for unloading, at the named place of destination
- DPU (Delivered at Place Unloaded): requires the seller to deliver the goods at the disposal of the buyer after they've been unloaded from the arriving means of transport
You can find more information about Incoterms on our Import and Export checklists or one of our friendly account managers can explain which one applies to your specific shipment - just give them a call.
