Incoterms 2020 in plain English
EXW, FOB, CIF, DAP: who pays for what and where responsibility passes from you to your Russian buyer. Three letters in the contract settle both questions.
What Incoterms actually decide
Incoterms are the three-letter codes in a sales contract that answer two questions: who pays for each stage of the delivery, and at what moment the risk passes from the seller to the buyer. They do not decide who owns the goods or when the invoice is paid — that stays in the contract itself.
For a sale to a buyer in Russia the choice also determines who handles the export formalities. That matters to you as the supplier: the EX1 export declaration is your proof of export for zero-rating the VAT on the sale, so it must be clear from the start who lodges it.
The four terms we see most often
EXW (Ex Works)
The buyer collects from your premises. Maximum control and effort for the buyer, including export clearance. It is the most common choice with us: we cover the whole chain from your factory door, lodge the EX1 for you and send you the MRN.
FOB (Free On Board)
You deliver the goods to the port and load them on board; from there it is the buyer’s zone. The classic term for sea freight from China.
CIF (Cost, Insurance and Freight)
The seller pays freight and insurance to the destination port, but the risk passes to the buyer at loading. It sounds convenient, yet the freight is built into the price of the goods, usually with a margin.
DAP (Delivered At Place)
The seller delivers to the buyer’s warehouse and the buyer handles import customs. For imports into Russia it is rarely the most economical option.
Tip for a first shipment
For a first delivery, EXW or FOB works best: your customer sees the real price of the goods and the real cost of logistics separately, and nothing is hidden in the unit price.
What this means for you as the exporter
Under EXW your customer’s forwarder collects from your premises. In practice we arrange collection anywhere in the EU, lodge the export declaration on your behalf and send you the MRN, so you still hold proof of exit even though the term formally places export clearance on the buyer.
Whichever term you agree, write the named place precisely (for example FCA Hamburg or EXW with your warehouse address) on the contract and the commercial invoice. The Incoterms rule also affects the customs value in Russia: the cost of delivery to the EAEU border is added to the invoice price, so a term that hides freight in the price makes the calculation harder to follow.
Frequently asked questions
Which Incoterms rule is best for exporting to Russia?
For a first shipment EXW or FOB, because the price of the goods and the cost of logistics stay separate. With EXW we collect from your premises and lodge the EX1 for you.
Why is CIF not always the cheapest option for the buyer?
Because the freight is built into the price of the goods, usually with a margin, and the risk still passes to the buyer at loading.
Who handles Russian import customs under DAP?
The buyer. The seller delivers to the named place, and your Russian customer clears the goods and pays the duty and VAT.
Other guides
Tranzit3 services
More in this section
Request a quote
Reply within 2 business hours