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What are Incoterms? INCOTERMS = International Commercial Terms

□ INCOTERMS are PRE-DEFINED Commercial terms published by the International Chamber of Commerce (ICC)

□They are a series of THREE-LETTER Trade Terms related to Common Contractual Sales Practices.

□The INCOTERMS RULES are INTENDED PRIMARILY to CLEARLY Comunicate the TASKS, COSTS, and RISKS associated with the TRANSPORTATION and DELIVERY of GOODS.

□ The INCOTERMS Rules are Accepted by GOVERNMENTS, LEGAL AUTHORITIES, and PRACTITIONERS Worldwide for the Interpretation of Most Commonly used Terms in International Trade. They are intended to Reduce or Remove altogether Uncertainties arising from Different Interpretation of the RULES in Different COUNTRIES.

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E terms (EXW) = 1 TERM: The seller makes available its goods at their premises in order for the buyer to collect. This is the minimum obligation for the seller.→ El vendedor pone sus bienes / mercancias en su local a disposición del comprador. Esta forma es de mínima obligación para el vendedor (sólo paga embalaje y verificación).

□ To watch the definition of EX Works: http://www.investopedia.com/terms/e/exw.asp

F terms (FCA, FOB, FAS) = 3 TERMS: The seller delivers the goods to a carrier appointed by the buyer. The seller will arrange and pay for delivery of goods to the carrier, but the buyer pays for everything after that.→ El vendedor entrega las mercancias a un transportista designado por el comprador. El vendedor organizará y pagará la entrega de las mercancias al transportista, pero el comprador paga por todo lo demás.

C terms (CFR, CIF, CPT, CIP) = 4 TERMS: The seller has to contract for carriage, but does not assume the risk of loss or damage after the shipment.→ D terms (DAT, DAP, DDP) = 3 TERMS: The seller bears all risk involved in bringing the goods to the buyer.→ El vendedor se hace cargo de todos los riesgos que que implica llevar las mercancias al comprador.

The 4 Categories

Incoterms fall into four different groups: (1) Departure (E) (3) Main Carriage Paid (C) (2) Main Carriage Unpaid (F) (4) Arrival (D)

Englishby Matifmarin The 4 Categories

1 Term forDeparture

3 Terms for Unpaid CarriageE

F

4 Terms forPaid Carriage

C

3 Terms for Arrival

D

Englishby Matifmarin Incoterms

Entrega directa a la salida

Entrega indirecta, sin pago del transporte principal

Entrega indirecta, con pago del transporte principal

Entrega directa en la llegada

ExercisesCommon Definitions

(1) Group E = Departure from Seller

(2) Group F = Main Carriage Not Paid By Seller

(3) Group C = Main Carriage Paid By Seller

(4) Group D = Arrival

EXW→ INCOTERM =

Spanish

→ INCOTERMS = FCA – FSA – FBO

→ INCOTERMS = CFR – CIF – CPT - CIP

→ INCOTERMS = DAP – DAT – DDP

Englishby Matifmarin GRAPHIC SUMMARY - Incoterms

The 4 Categories

BUYER BUYER SELLERSELLER

VENDEDOR COMPRADOR

More Graphics and Spanish explanations on next pages

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(1) Departure (E)

<< Minimum obligation for the Seller >>

Englishby Matifmarin (2) Main Carriage Unpaid (F)

Englishby Matifmarin (2) Main Carriage Unpaid (F)

<< Sharing cost Seller – Buyer BUT some more obligation for the Buyer >>

Englishby Matifmarin

(3) Main Carriage Paid (C)

Englishby Matifmarin (3) Main Carriage Paid (C)

<< Sharing cost Seller – BuyerSeller – Buyer BUT some more obligation for the Seller >>

Englishby Matifmarin (4) Arrival (D)

Englishby Matifmarin (4) Arrival (D)

<< Minimum obligation for the Buyer >>

Check Spanish Graphics explanations on next pages

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Logistics & Transport

(1) EmbalajeY

Verificación(2) Cargo (3) Trasporte

doméstico(4) Formalidad

Aduanaexportación

(5) ManipulaciónDe mercancías

(6) Transporte principal (7) Seguro (8) Manipulación

de mercancía

(9) Formalidad Aduana

importación

(10) Trasportedoméstico (11) Descarga

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Logistics & Transport

What is Anti-Dumping Duty?

Anti-dumping duties protect domestic producers who have a higher cost of production than foreign exporters. 

The problem is that, according to law “Anti-dumping duties”, a foreign country, can’t sets

the selling price of goods below the cost of production

in my country.

Our mandarin oranges are good and cheaper than yours. What’s the

problem?

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Logistics & Transport

“Customers” are the end goal of businesses. Therefore, it’s the term used by companies to refer to potencial clients.

Consumers, customers and clients: The same or different in your business?

Let’s check their definitions:

(1) A consumer is:a person who purchases goods and services for personal use; or a person or thing that eats or uses something

(2) A customer is:a person who buys goods or services from a shop or business

(3) A client is:a person or organization using the services of a lawyer or other professional person or company; or  a person being dealt with by social or medical services.

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Business EnglishLogistics & Transport

What are Documents against acceptance

→ an arrangement in which someone has the right to collect imported goods only after they have signed an agreement at a bank to pay for the goods and have shown proof of having signed it.

ExportaciónEsquema del circuito operativo con remesas documentarias de exportación (entrega contra aceptación). 1. Envío de la mercancía por parte del exportador.2. El exportador entrega los documentos comerciales y el efecto (doc. en el que se expresa una deuda) con las instrucciones de cobro en Caja Rural. 3. Caja Rural remite los documentos y el efecto, transmitiendo las instrucciones del exportador (entregar documentos contra aceptación) y las suyas propias al banco del importador.4. El banco del importador le avisa de la llegada de la remesa y las instrucciones de pago. 5. El importador acepta el efecto y autoriza el adeudo en su cuenta al vencimiento. El banco del importador le entrega los documentos comerciales.6. Simultáneamente:

(1) El banco del importador avisa a Caja Rural de la aceptación del efecto. (2) El importador retira la mercancía en el puerto de destino.

7. Caja Rural avisa al exportador de la aceptación del efecto. 8. Al vencimiento, el banco del importador adeuda la cuenta de este y...9. ... emite el reembolso de la operación. Dos casos:

•Abono directo: si el banco del importador y Caja Rural comparten cuenta o sistema de pago.

• Abono indirecto: en caso contrario, vía uno de los corresponsales de Caja Rural.

(1) Remiten los fondos al corresponsal para su abono a Caja Rural. (2) El corresponsal informa la recepción de los fondos y abona la cuenta de Caja Rural.

10. Caja Rural informa y abona la cuenta del exportador.

El compromiso de pago a un vencimiento o la aceptación de un documento financiero contra entrega de documentos comerciales que transmiten la propiedad de las mercancías.(Doumento de entrega contra aceptación)

Check also the graphic on next page!!

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Logistics & Transport

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You have 1h 45 Minutes to do your Progress Test 1

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!!!!!!

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You’re the best!!