Incoterms
International rules (EXW, FOB, CIF, DAP and others) that define who pays for each stage of delivery and where risk passes from seller to buyer.
Definition
Incoterms are international rules (EXW, FOB, CIF, DAP and others) that define who pays for each stage of delivery and at which point risk passes from the seller to the buyer. The current edition is Incoterms 2020.
For a first shipment, EXW or FOB is usually chosen so that the buyer sees the real price of the goods and of the logistics separately.
How it works in practice
Three terms are most common in exports to Russia: EXW (the goods are collected from your premises and the buyer’s side does everything, including the export declaration), FCA (you hand the goods to the carrier and handle export clearance) and DAP (you deliver to an agreed place, and the Russian customer pays import customs charges).
Tranzit3 helps choose the term at contract stage: FCA is usually more convenient than EXW because the export declaration sits with the seller, while the freight rate hardly changes. If you prefer not to deal with export formalities at all, we can lodge the EX1 for you. A full table of terms is in our interactive Incoterms 2020 guide.
Incoterms: frequently asked questions
Which term suits a first shipment from Europe?
FCA at the supplier’s warehouse: the seller loads the goods and lodges the EX1, and the buyer’s forwarder takes care of everything else. The buyer controls the cost of carriage and does not depend on the seller’s own logistics, as under DAP or CPT.
Do the delivery terms affect the customs value?
Yes. The customs value includes costs up to the EAEU border: under EXW and FCA the cost of carriage and insurance to the border is added to the price of the goods; under DAP it is already included in the price. This changes the base for duty and VAT.
Do Incoterms 2010 still apply if the contract is old?
They do — the edition is stated in the contract. But Incoterms 2020 changed a number of details (for example, DAT was replaced by DPU), so when updating a contract it is better to refer to the current edition.
Related terms and guides
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