Free on Board

The "1990 International Rules for the Interpretation of Trade Terms" lists a total of thirteen trade terms, the main points of which are as follows:

(I) Ex Works (EXW)

The English term is "EX Works (... named place)", i.e., "Ex Works (... named place)".

It means the seller fulfills the obligation to deliver the goods that are ready at their premises, such as workshops, factories, warehouses, etc., to the buyer, but usually is not responsible for loading the goods onto the vehicle provided by the buyer or clearing the goods for export. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the intended destination.

(II) Free Carrier (FCA)

The English term is "Free Carrier (... named place)", i.e., "Free Carrier (... named place)".

It means the seller is responsible for handing over the goods, after completing export customs clearance, to the carrier nominated by the buyer at the named place. In accordance with commercial practice, when the seller is required to cooperate with the carrier by signing a contract, the seller may do so at the buyer's risk and cost. This term applies to any mode of transport.

(III) Free Alongside Ship (FAS)

The English term is "Free Alongside Ship (... named port of shipment)", i.e., "Free Alongside Ship (... named port of shipment)".

It means the seller delivers the goods alongside the ship at the named port of shipment on the quay or on lighters. From that point onward, the buyer must bear all costs and risks of loss or damage to the goods. Additionally, the buyer must handle export customs clearance procedures. This term applies to sea or inland waterway transport.

(IV) Free on Board (FOB)

The English term is "Free on Board (... named port of shipment)", i.e., "Free on Board (... named port of shipment)".

It means the seller delivers the goods after they pass the ship's rail at the named port of shipment. After the goods pass the ship's rail, the buyer must bear all costs, risks, loss, or damage to the goods, and the seller is also required to handle the export customs clearance of the goods. This term applies to sea or inland waterway transport.

(V) Cost and Freight (CFR or C&F)

The English term is "Cost and Freight (... named port of destination)", i.e., "Cost and Freight (... named port of destination)".

It means the seller must pay the costs and freight necessary to bring the goods to the named port of destination. However, once the goods are on board the vessel, the risk of loss, damage, and any additional costs arising from incidents after the goods have passed the ship's rail at the specified port are transferred from the seller to the buyer. Additionally, the seller is required to handle the export customs clearance procedures. This term applies to sea or inland waterway transport.

(VI) Cost, Insurance, and Freight (CIF)

The English term is "Cost, Insurance, and Freight (... named port of destination)", i.e., "Cost, Insurance, and Freight (... named port of destination)".

It means in addition to having the same obligations as under the "Cost and Freight" term, the seller is also required to procure and pay for marine insurance against the buyer's risk of loss or damage to the goods during carriage. This term applies to sea or inland waterway transport.

(VII) Carriage Paid To (CPT)

The English term is "Carriage Paid to (... named place of destination)", i.e., "Carriage Paid to (... named place of destination)".

This term means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss or damage to the goods, as well as any additional costs occurring after the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been taken into the care of the carrier. Furthermore, the seller must handle the export customs clearance procedures for the goods. This term applies to all modes of transport, including multimodal transport.

(VIII) Carriage and Insurance Paid To (CIP)

The English term is "Carriage and Insurance Paid to (... named place of destination)", i.e., "Carriage and Insurance Paid to (... named place of destination)".

It means the seller has the same obligations as under "Carriage Paid to (... named place of destination)", but additionally, the seller must procure and pay for marine insurance against the risk of loss or damage to the goods that the buyer bears during carriage. This term applies to any mode of transport.

(IX) Delivered at Frontier (DAF)

The English term is "Delivered at Frontier (... named place)", i.e., "Delivered at Frontier (... named place)".

It means the seller's obligations include delivering the ready goods to the named place at the frontier, completing export customs clearance procedures for the goods, and delivering them before the customs border of the adjoining country. This term is primarily intended for goods transported by rail or road but can be used for other modes of transport.

(X) Delivered Ex Ship (DES)

The English term is "Delivered Ex Ship (... named port of destination)", i.e., "Delivered Ex Ship (... named port of destination)".

It means the seller fulfills the obligation of delivering the ready goods to the buyer on board the ship at the specified port of destination without clearing the goods for import. Therefore, the seller bears all costs and risks involved in bringing the goods to the named port of destination. This term applies only to sea or inland waterway transport.

(XI) Delivered Ex Quay (DEQ)

The English term is "Delivered Ex Quay (Duty Paid) (... named port of destination)", i.e., "Delivered Ex Quay (Duty Paid) (... named port of destination)".

This term means the seller fulfills their obligation by delivering the ready goods to the buyer on the quay at the named port of destination after completing import customs clearance. The seller must bear all risks and costs, including duties, taxes, and other charges against the delivery. This term applies to sea or inland waterway transport.

(XII) Delivered Duty Unpaid (DDU)

The English term is "Delivered Duty Unpaid (... named place of destination)", i.e., "Delivered Duty Unpaid (... named place of destination)".

It means the seller delivers the ready goods at the named place in the country of import and bears all costs and risks incurred in bringing the goods to that place (excluding duties, taxes, and other official charges payable upon import), as well as the costs and risks of carrying out customs formalities. The buyer bears any additional costs and risks due to failure to clear the goods for import promptly. This term applies to all modes of transport.

(XIII) Delivered Duty Paid (DDP)

The English term is "Delivered Duty Paid (... named place of destination)", i.e., "Delivered Duty Paid (... named place of destination)". It means the seller delivers the ready goods at the named place in the country of import, bearing all costs and risks involved in bringing the goods to that place, and handles import customs clearance. This term can apply to all modes of transport.