Incoterms are standard trade definitions most commonly used in international sales contracts between the buyer and seller and do not deal with the contract for carriage except when it is mandated by the authorities of the country of export. Devised and published by the International Chamber of Commerce, they are at the heart of world trade.

ICC introduced the first version of Incoterms - short for "International Commercial Terms" - in 1936. Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with the development of international trade. the latest edition was published in 2000.

Departure
EXW
Ex Works (...Named Place)``Ex works" means that the seller's obligation to deliver goods is fulfilled when he has made the goods available at his premises (i. e. works, factory, warehouse, etc.) to the buyer. Thus, he is not responsible for loading the goods on any vehicle or for clearing it for export, unless otherwise agreed. This term represents a minimum obligation for the seller; consequently the buyer bears all costs and risks involved in taking the goods from the seller's premises to his desired destination.
The seller's minimizes his risk & cost by only making the goods available at his own premises.
 

• "Free on board" means that the seller's obligation to deliver goods is fulfilled when the goods have passed over the ship's rail at the named port of shipment. This means that all costs and risks of loss of or damage to the goods are transferred to the buyer from that point. The FOB term requires the seller to clear the goods for export. This term can only be used for sea or inland waterway transport.

• "Cost and Freight" means that the seller's delivery of goods obligation is fulfilled when the goods have passed over the ship's rail at the port of shipment thus all risk of loss of or damage to the goods, as well as any additional costs due to events occurring after that time are transferred to the buyer. But the seller's monetary obligation is fulfilled when the goods are in the port of destination; meaning that the seller must pay the costs and freight necessary to bring the goods to the named port of destination. Export Clearance under CFR term is the seller's responsibility. This term can only be used for sea and inland waterway transport.

• "Cost, Insurance and Freight" means that the seller's obligations are the same as the CFR term but with the addition that he is required to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage ant to pay the insurance premium. Under the CIF term, insurance is only limited to minimum coverage. Export Clearance is the seller's responsibility.

• "Delivered duty unpaid" means that the seller's obligation to deliver is fulfilled when goods are available at the named place of destination of the buyer. Consequently the seller will bear all costs & risk except what for the duties, Taxes, all import formalities at the port of arrival and unloading at any arriving transport mode at the named place of destination. Thus, the buyer has to bear any additional costs and any risks caused by his failure in the import custom clearance.

• "Delivered duty paid" means that the seller's obligation to deliver is fulfilled when goods are available at the named place of destination of the buyer but unloaded at any arriving transport mode at the named place of destination. Consequently the seller will bear all costs & risk including the duties, Taxes, all import formalities at the port of arrival. DDP is used when seller bears the maximum cost & risk. This term should not be used if the seller is unable directly or indirectly to obtain the import license. If the parties wish to exclude from the selley's obligations some of the costs payable upon importation of the goods (such as value added tax (VAT)), this should be made clear by adding words to this effect: "Delivered duty paid, VAT unpaid ... (named place of destination)".