EENI (The Global Business School) intenational trade and global marketing
EENI (The Global Business School)
Course summary (Incoterms 2010):
Incoterms: EXW (EX Works), FOB (Free On Board) - CIF (Cost, Insurance and Freight) - DDP (Delivered Duty Paid) - CPT (Carriage paid to)...
Objectives. To understand:
- The responsibilities of the exporter and Importer under Incoterms 2010.
- How Incoterms are used in International trade transactions.
Incoterms are a set of international rules for the interpretation of International trade terms set forth by the International Chamber of Commerce. The word Incoterm is an abbreviation of international commercial terms and the chosen Incoterm is a term of the contract of sale. Incoterms are not terms of the contracts of carriage or delivery.
In International trade transactions one of the aspects to be defined is the place of delivery of products. This place, previously agreed between the importer and the exporter, must be stated in the international sales contract. INCOTERMS 2010 facilitates this by clearly defining the place of delivery, who is responsible for the transport to the place of delivery, who assumes the risks and the point at which risk passes from the exporter to the importer, who customs clears the products for import/export and many more important obligations.
Incoterms also establish a body of international rules for the interpretation of the most commonly used International trade terms.
Example of the course Incoterms 2010:
Defining the Obligations. Incoterms enable the contracting parties to set out clearly and concisely the extent of their respective obligations, and above all, the moment when costs and risks are transferred from the exporter to the importer. In Incoterms, the parties define the point to which the exporter is responsible for the products and what are the expenses relating to his obligations which will therefore have to be included in the price offered by the exporter. Incoterms cover the various modes of transport of the products, clearly defining in the International contract of sale the respective obligations of the exporter and the importer in each case.
Incoterms 2010. The number of Incoterms rules has been reduced from 13 to 11. New Incoterms: DAT and DAP. Replaced Incoterms: DAF, DES, DEQ and DDU.
a) Incoterms for sea and inland waterway transport:
FAS - FOB - CFR - CIF
b) Incoterms for any mode of transport (multimodal / unimodal)
EXW - FCA - CPT - CIP - DAT - DAP - DDP
Incoterms Delivered at Origin: EXW, FCA, FAS, FOB, CPT, CFR, CIP, CIF
Incoterms Delivered at Destination: DAT, DAP, DDP
DAP- DELIVERED AT PLACE (Entregado en lugar)
DAP (DELIVERED AT PLACE) may be used for all transport modes. Exporter delivers when the products, once unloaded from the arriving means of transport, are placed at the disposal of the importer at a named terminal at the named port or place of destination. "Terminal" includes quays, warehouses, container yard or road, rail or air terminal. Both parties should agree the terminal and if possible a point within the terminal at which point the risks will transfer from the exporter to the buyer of the products. If it is intended that the exporter is to bear all the costs and responsibilities from the terminal to another point DAP or DDP may apply.
DAT- DELIVERED AT TERMINAL (Entregado en la Terminal)
DAT (DELIVERED AT TERMINAL) may be used for all transport modes. The exporter delivers the products when they are placed at the disposal of the importer on the arriving means of transport ready for unloading at the named place of destination. Parties are advised to specify as clearly as possible the point within the agreed place of destination, because risks transfer at this point from exporter to importer. If the exporter is responsible for clearing the products, paying duties etc consideration should be given to using the DDP term.
- EXW EX WORKS (... named place)
- FCA FREE CARRIER (... named place)
- FAS FREE ALONGSIDE SHIP (... named port of shipment)
- FOB FREE ON BOARD (... named port of shipment)
- CFR COST and FREIGHT (... named port of destination)
- CIF COST, INSURANCE and FREIGHT (... named port of destination)
- CPT CARRIAGE PAID TO (... named place of destination)
- CIP CARRIAGE and INSURANCE PAID TO (... named place of destination)
- DAF DELIVERED AT FRONTIER (... named place)
- DES DELIVERED EX SHIP (... named port of destination)
- DEQ DELIVERED EX QUAY (... named port of destination)
- DDU DELIVERED DUTY UNPAID (... named place of destination)
- DDP DELIVERED DUTY PAID (... named place of destination)
Web site: International Chamber of Commerce: http://www.iccwbo.org/
Incoterms, FOB, CIF, DDP, DDU, CFR, EXW, FAS, FCA, cci, EX Works, Free, On Board, Cost, Insurance, Freight, Carriage, Delivered, Duty, Paid, International, Commercial, Terms, Master, international business, Customs, Logistics, import, export, exporter
Course summary (Methods of payment / Letters of credit):
International Methods of payment: letter of credit (L/C), Documentary collections and Credits, UCP 600. Bills of Exchange. Bank Draft Transfer
Objectives: this learning unit aims at:
- Analyzing various methods of payment used in International trade and outlining their differences, advantages and disadvantages both for the importer and the exporter.
- To understand what Documentary collections are and how they work. Export and Import Collections will be analyzed.
- Understanding the following:
- The importance of Documentary credits and letter of credit in International trade
- How a Documentary credit works
- Obligations of the parties involved
- To understand how Import Documentary credits operate.
In this learning unit we will examine how to receive and effect payment for International contracts of sale. Our focus will be on export methods of payment. The information presented here is also applicable to import transactions. The selection of the most suitable method of payment is a key factor of a successful export sale.
Examples of the course Methods of payment / Letters of credit:
Student will become familiar with the parties, obligations and key terminology used in Documentary credit operations as will as learn about the key checklists to take into account when preparing documents for presentation under Documentary credits.
A Documentary credit is an agreement under which a bank acting at the request and on instructions of the importer makes an undertaking to effect payment to the exporter against presentation of the required documents within the specified period of time, provided that the documents strictly comply with the terms and conditions stipulated in the credit. Letters of credit are more favorable for exporters rather than importers, as they are aimed at protecting The exporter.
Import Letters of credit. This is a short but very important learning unit. The ability of the trade practitioner and their bankers to issue Documentary credits which are complete and precise is essential. This unit will familiarize you with the role of the Issuing Bank, how to complete the DC application form and most importantly how to analyze the Credit as issued.
A Documentary collection (Contents: Documentary collection. Clean Collection. Bill of Exchange. Managing collections. Doc. Collection Simulation.) is a method of payment whereby the exporter initiates, through the banking system, the collection of money due to him from the importer. Payment will be made against a Bill of Exchange and documents of title. Documents can be released against acceptance of the Bill of Exchange or against payment at sight. This course will give you a practical understanding of this popular method of payment.
The Uniform Rules for Collections, 1995 Revision, ICC publication No. 522, shall apply to all collections where such rules are incorporated into the text of the "collection instruction". In the course of this unit we will provide practical examples of the application of URC 522. All serious International trade specialists should obtain a copy of this ICC Publication.
Learn the differences between clean and Documentary collections and analyze the advantages and disadvantages for the importer and for the exporter. Learn how to complete a Bank Documentary collection order and how to manage export collections at the bank. Understand the difference between documents against acceptance and documents against payment. Bills of Exchange and the Documentary Collection Cycle.
Letters, Credit, LC, L/C, Documentary, Credits, UCP 600, International, Payments, Documentary collections, Credits, Bills, Exchange, Bank Draft, Bank transfer, Clean Collection, Master, international business, Customs, Logistics, import, export, exporter