Learning more about Incoterms®2010

In an earlier issue we introduced “Free Carrier” or “FCA” (named place of delivery) as the second of the Incoterms for the class “Rules for any Mode or Modes of Transport”. This means that it can be used irrespective of the selected mode of transport, and can even be used for more than one mode of transport. While FCA is more suitable for international trade, Ex Works (EXW) – the first Incoterms®2010 – is more suitable for domestic trade. In the introduction of the FCA term and in subsequent issues we briefly highlighted the ten seller’s obligations and the ten buyer’s obligations. This part serves to summarise and conclude the term. According to the International Chamber of Commerce (ICC) FCA, at a named place of delivery, means that the “seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point”. In the instance of delivery, the address of the premises at which delivery should be made must be clearly identified. In accordance with Incoterms®2010’s FCA, the seller must, where applicable, clear the goods for export. The seller, however, does not have any obligation with respect to the clearance of the goods for import, or for the payment of the customs duty, or for carrying out of any customs import formalities. Remember that for reference purposes you may want to consult the ICC’s “Incoterms®2010 – ICC Rules for the use of Domestic and International Trade Terms”. In the next issue we will define the third Incoterms – Carriage Paid To (CPT).