Incoterms (International Commercial Terms) is an international standard about the rights and obligations of the buyer and seller in the international transport of goods. The contract between seller and buyer stipulates:
- the obligations of both parties;
- who arranges the insurance, permits, authorizations and other formalities;
- who arranges the transport to where;
- the point at which the costs and risks pass from the seller to the buyer.
The Incoterms can be divided into four main categories, which can be recognized by the first letter of each Incoterm.
- With the E-term, the buyer arranges the entire transport;
- With the F-terms, the buyer arranges the main transport, the seller only the preparatory transport as well as the customs clearance;
- With the C-terms, the transfer of risk is different from the distribution of the costs, with these terms the seller arranges and pays for the main transport, but the risk already passes to the buyer during the main transport.
- With the D-terms, the seller arranges and pays for the main transport, and also bears the risk for it.
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