Incoterms (International Commercial Terms) are the rules which determine delivery conditions. They were formulated for the first time already in 1936. Since that moment they have become changed a little, but till now they constitute the basic rules applied in international trade, as they facilitate the understanding of terms. The terms functioning in their present form come from the year 2000. They are recommended by the International Commerce Chamber ICC. Incoterms divide the costs and responsibilities between the buyer and the seller. They also reflect the type of transport agreed. The rules must be placed on documents such as trade invoice or a bill of lading. Usually they are applied in the form of abbreviations - their explanations can be found below.

EXW (Ex Works)
The formula EXW means that the buyer receives the goods from the place of release by the seller (for example the factory). The costs of transport, formalities connected with customs (if it is required) and the goods’ insurance constitute the buyer’s responsibility. The risk of the loss or damage of the goods goes from the seller to the buyer when the goods leave the place of release.
The formula has its application in the case of all types of transport.

FOB (Free On Board)
The formula FOB means that the seller is obliged to deliver the goods to the carrier appointed by the buyer. The costs of the delivery on the basic transport way are not paid by the seller. The risk of the loss or damage of the goods goes from the seller to the buyer when the goods become left overboard in a loading port.
The formula FOB requires from the seller conducting the customs of goods assigned for export.
The buyer must bear all the costs and remaining risk connected with transport, from the moment when the goods become placed on the board.
The formula has its application in the sea and inland transport.

FCA (Free Carrier)
The formula FCA means that the seller at the agreed time delivers the goods to the place in which they are supposed to be loaded, namely to the carrier appointed by the buyer. The costs of the transport and goods’ insurance constitute the buyer’s responsibility. From the moment of the goods’ being passed on to the carrier, the risk of their loss or damage goes from the seller to the buyer.
In the case when the goods’ loading on the carrier’s means of transport takes place on the seller’s premises, he or she is obliged to load the goods. However, if the place of the goods’ release is different (for example the port), the delivery is considered to be completed after the goods’ being passed on to the carrier on the transport means sent by the seller. The unloading of the goods from the means of transport does not constitute the seller’s responsibility.
The formula has its application in all kinds of transport.

FAS (Free Alongside Ship)
The formula FAS means that the seller is obliged to deliver the goods along the ship’s board (namely: onto a landing pier which the ship is moored to) in a particular port. In this moment the risk of the loss or damage of the goods goes from the seller to the buyer. The buyer becomes also responsible for transport and insurance. The obligation of customs (if it is required) and the bearing of related costs constitute the seller’s responsibility.
The formula has its application in the sea or inland transport.

DES (Delivered Ex Ship)
The formula DES means that the seller is obliged to deliver the goods to the buyer’s disposal on a ship in a determined destiny place. The seller bears the costs of the goods’ loading on the ship, the costs of freight and goods’ insurance till the moment of the ship’s reaching its destiny port at the place which enables the unloading of the goods. The buyer shares the costs of unloading, the risk of the goods’ damage or loss and also the carrying out of import customs.
The formula has its application in the sea or inland transport.

DEQ (Delivered Ex Quay)
The formula DEQ means that the seller is obliged to pass on the goods to the buyer’s disposal on a landing pier agreed in a destiny port. In this place the risk of the goods’ loss or damage goes to the buyer, too and the obligation of import customs (if it is required) as well.
The formula has its application in the sea or and inland transport.

DDU (Delivered Duty Unpaid)
The formula DDU means that the seller is obliged to pass on the goods by the means of transport to the buyer’s disposal in a determined destiny place and bear the costs and risk connected with it. The costs of unloading and import customs (if it is required) constitute the buyer’s responsibility. The parties can modify this formula, for instance DDU (VAT Paid).
The formula has its application in all kinds of transport.

DDP (Delivered Duty Paid)
The formula DDP means that the seller bears hardy all the responsibilities (only the insurance of the transport is not obligatory). Similarly to the formula DDU, the seller at his/her own costs delivers the goods by the means of transport to the buyer’s disposal in a determined destiny place. Additionally, in this formula the seller bears all the costs of import customs. As the formula EXW favours mostly the seller, the DDP constitutes its opposition and brings most profits to the buyer.
The formula has its application in all kinds of transport.

DAF (Delivered At Frontier)
The formula DAF means that the seller is obliged to deliver the goods to the buyer’s disposal in a determined place at a boarder, before reaching the border of the neighbouring country. The border is determined by the buyer. The seller bears the coasts related to it, and also the costs of the risk of the goods’ damage or loss and export customs (if it is required). The buyer may bear the costs of the goods’ unloading from the transport means at the boarder. Further responsibility for the goods and transport goes to the buyer.
The formula has its application in all types of transport.

CPT (Carriage Paid To...)
The formula CPT means that the seller is obliged to conclude an agreement on transport to an assigned destiny place determined by the buyer. The seller is obliged to deliver the goods to the carrier and bears all the costs of transport and export customs (if it is required). If there are few carriers, the seller is obliged to deliver the goods to the first of them. The buyer takes all the costs of the risk of the damage or loss of the goods after passing on the delivery to the carrier or the first carrier.
The formula has its application in all types of transport.

CIP (Carriage and Insurance Paid to...)
The formula CIP means the same rules as the CPT, however, in the CIP the seller additionally bears the responsibility for the insurance and costs connected with it.
The formula has its application in all kinds of transport.

CIF (Cost, Insurance and Freight)
The formula CIF means that the seller bears the costs of transport and insurance and is obliged to pass on the evidence of the conclusion of the insurance agreement to the buyer. The risk of the loss or damage of the goods goes from the seller to the buyer when the goods pass over the ship’s board in a loading port.
The formula has its application in the sea or inland transport.

CFR (Cost and Freight)
The formula CFR means that the seller will be obliged to conclude the agreement on the goods’ transport to a determined destiny place and cover the costs of freight, including the costs of loading a ship, and all other reloadings, if any such occur during the transport. Taking over the risk of the damage and loss of the goods by the buyer takes place at the beginning of loading the goods on the board in a loading port. The costs of the goods’ insurance constitute the buyer’s responsibility.
The formula has its application in the sea or inland transport.