The letter in your September 4 issue (Incorrect Incoterms) calls for a response. Incoterms only address transport obligations, costs and risks; they do not cover the whole sales contract. The terms FCA, CIP and CPT are general trade terms for any mode of transport. They require precise supplementary information. The specific terms for maritime transport – FOB, CFR, CIF – are easily internationaly understood. Importantly they provide the exporter with a dated international transport document of the title (B/L) in exchange for the container. The invoice price is VAT zero-rated and the value up to FOB is acceptable for Customs purposes. From a practical perspective the vast majority of the trade is conducted under the maritime terms as for example the terms of payment frequently override the FCA term. Pat Corbin, director ICC SA.
