Incolearn – Learning more about Incoterms 2000

FREE ALONGSIDE SHIP (FAS) PART II – The Seller’s Obligations The International Chamber of Commerce (ICC) defines the third Incoterm Free Alongside Ship (FAS), at a named port of shipment, as “the seller delivers when the goods are placed alongside the vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment”. The seller has to clear the goods for export, which is a reversal of Incoterms 1990, which required the buyer to arrange for export clearance. Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, identified ten obligations that the seller might need to fulfil in terms of Free Alongside Ship: (1) the provision of goods in conformity with the contract; (2) licences, authorisations, and formalities; (3) contracts of carriage and insurance; (4) delivery; (5) transfer of risks; (6) division of costs; (7) notice to the buyer; (8) proof of delivery, transport documents or equivalent electronic message; (9) checking, packaging, marking; and (10) other obligations. The Provision of goods in conformity with the conrtact implies that the documents stipulated in the contract of sale and any other evidence required must be provided. In respect of the licences, authorisations and formalities, the seller must obtain at his own risk and expense any export licence, and where applicable, carry out all customs formalities for the export of the goods. The seller has no obligation in respect of the contracts of carriage and insurance. As for delivery, the seller must place the goods alongside the vessel, at the loading place, both of which are named by the buyer, at the port of shipment on the date or within the agreed period. In respect of the transfer of risks, the seller must bear all risks for the loss or damage to the goods until delivery has taken place. In relation to the division of costs, the seller must pay all the costs relating to the goods up to delivery, and where applicable pay costs of customs formalities, including all duties, taxes, and other charges payable upon export. The seller must give sufficient notice to the buyer that the goods have been delivered alongside the nominated ship/vessel. The seller must, at his expense, provide the buyer with proof of delivery, transport documents or equivalent electronic message. Depending on the stipulations in the contract of sale the checking, packaging, marking costs are for the seller’s account. As for other obligations, the buyer may request the seller’s assistance with information and documentation issued in the country of shipment or of origin in respect of the buyer’s import of the goods, and where necessary for their transit through any country. Next week’s column will focus on the buyer’s obligations under Free Alongside Ship (FAS).