Workshop on :

Presented by:
Md. Abu Yousuf Khan,
CDCS, CAMS,CERM.
SPO & Faculty, RBTA.
Cost
Risk
Obligation

Online Order
 Different Stages of Foreign Trade Activities

Export Country Carriage Import/ Destination Country

Port of Port of Import Transport Importer

Exporter Transport Export
Beijing Clearance Loading Carriage Discharge Clearance Dhaka
(Shanghai (Chittagong Bangladesh
China
Port) Port)

• Pre Carriage 10000 Computer Monitors

Delivery Point may be Different • Main Carriage
• On Carriage

•Export Packaging •Origin Terminal Charges •Import Duty, Taxes and Custom
•Loading Charges •Loading on Carriage Clearance
•Delivery to Port/Place •Carriage Charges •Delivery to Destination
•Export Duty, Taxes and Custom •Insurance •Unloading to Destination
Clearance •Destination Terminal Charges
IN INTERNATIONAL

CO COMMERCIAL

TERMS TERMS
The Incoterms or International Commercial
Terms are a series of pre-defined commercial terms
published by the International Chamber of
Commerce (ICC) relating to international
commercial law.
The Incoterms rules explain a set of eleven of the
most commonly-used three-letter trade terms, e.g.
CIF, DAP, etc., reflecting business-to-business
practice in contracts for the sale and purchase of
goods.
Widely used in international commercial transactions
Amended every 10 years

Trade Term
 Why are Incoterms needed?

 Incoterms are globally recognized

 Incoterms enables clarity in contracts
 Helps to avoid trade disputes, claims and litigation
 E X W EXW

CFR
C F R
D D P DDP
EXW ǀ FCA ǀ FAS ǀ FOB ǀ CFR ǀ CIF ǀ CPT ǀ CIP ǀ DAP ǀ DPU ǀ DDP
 What the Incoterms Rules Do

Obligation Risk Cost

Obligation Risk Cost
Who does what between Where risk Which party is responsible
buyer and seller transfers from for which costs
seller to buyer
• Carriage Where and when the  Transport
• Insurance seller “delivers” the  packaging
• shipping documents goods.  loading or unloading costs,
• export or import licences All the Incoterms rules are and
based on the same  checking or security- related
principle that Transfer of costs.
risk occurs at the point of
delivery.
 Understanding the point of delivery is
important in Incoterms discussion

The delivery point is different in different terms.

Delivery  In EXW and all D-terms, the goods are delivered by

Point simply placing them ‘at the disposal of the buyer’ at the
relevant point.
 Under F and C-terms, the delivery point is related to
the handing over of the goods to the carrier in the
country of dispatch or shipment.
 History of Incoterms
 Incoterms 1936-First
 Incoterms 1953
 Incoterms 1967
 Incoterms 1976
 Incoterms 1980
 Incoterms 1990
 Incoterms 2000
 Incoterms 2010
 Incoterms 2020 – Latest edition
beacme effective on 1 January
2020.
 Types of Incoterms® 2020
EXW Ex Works Named place of delivery
FCA Free Carrier Named place of delivery
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
DAP Delivered at Place Named place of destination
DPU Delivered at Place Unloaded Named place of destination
DDP Delivered Duty Paid Named place of destination
 Types of Incoterms® 2020

Rules for any Modes of Rules for Sea and Inland Waterway
Transport Transport
E Term : EXW ǀ Ex Works

F Terms : FCA ǀ Free Carrier FAS ǀ Free Alongside Ship

FOB ǀ Free On Board

C Terms : CPT ǀ Carriage Paid To CFR ǀ Cost and Freight

CIP ǀ Carriage and Insurance Paid To CIF ǀ Cost Insurance and Freight

D Terms : DAP ǀ Delivered at Place

DPU ǀ Delivered at Place Unloaded
DDP ǀ Delivered Duty Paid

Why 11 Incoterms?
 Types of Incoterms® 2020

‘ E’ Terms : EXW – Minimum obligation for the seller. Export Country

‘F’ Terms : FCA, FAS, FOB – Export Country

‘C’ Terms : CPT, CIP, CFR, CIF – Seller must bear costs even after the delivery to
carrier where risk transfers. Main Carriage Paid

‘D’ Terms : DAP, DPU, DDP – Goods must arrive at a stated destination in the
country of import. Maximum obligation for the seller. Destination Term
(Import Country)
Proforma Invoice
 “Ex Works” means that the seller delivers when it
places the goods at the disposal of the buyer at the
EXW ǀ Ex Works seller’s premises or at another named place (i.e works,
(insert named place of delivery)
factory, warehouse etc).

The seller does not need to load the goods on any

collecting vehicle nor does it need to clear the goods for
export, where such clearance is applicable.

Obligation, Delivery and Transfer of Risk, Cost

 Place or precise point of delivery

 Loading Risk
 Export Clearance
 EXW ǀ Ex Works
(insert named place of delivery)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

EXW Negotiable

Exporters Importers
Responsibilities • Minimum responsibility for seller Responsibilities
• Maximum responsibility for buyer
• Can be used across all modes of transport
 “Free Carrier” means that the seller delivers the goods to the buyer
in one or other of two ways.
First, when the named place is the seller’s premises, the goods are
FCA ǀ Free Carrier delivered when they are loaded on the means of transport arranged
(insert named place of delivery) by the buyer.

Second, when the named place is another place, the goods are
delivered when, having been loaded on the seller’s means of
transport, they reach the named other place and are ready for
unloading from that seller’s means of transport and
at the disposal of the carrier or of another person nominated by the
buyer.
In the place of delivery risks & cost transfers to buyer’s account
 FCA ǀ Free Carrier
(insert named place of delivery)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

FCA Negotiable

• Exporter needs to clear the goods for export

• When the seller’s assistance is required in making the contract with the
carrier the seller may act at the buyer’s risk and expense.
• Can be used across all modes of transport
 FCA ǀ Free Carrier
(insert named place of delivery)

Changes in Incotrm 2020

Free Carrier (FCA) has been revised for Incoterms ® 2020 to cater to a
situation where goods are sold FCA for carriage by sea and buyer or
seller (or either party’s bank) requests a bill of lading with an on-board
notation. FCA in article A6/B6 now provides for the parties to agree
that the buyer will instruct the carrier to issue an on-board bill of lading
to the seller once the goods have been loaded on board, and for the
seller then to tender the document to buyer (often through the banks).

Example
 “Free Alongside Ship” means that the seller
FAS ǀ Free Alongside Ship delivers the goods to the buyer when the goods
(Insert named port of shipment) are placed alongside the ship(e.g on a quay or
a barge) nominated by the buyer at the named
port of shipment.

The risk of loss of or damage to the goods

transfers when the goods are alongside the
ship, and the buyer bears all costs from that
moment onwards.
Feeder Vessel , Mother Vessel & Quay
 FAS ǀ Free Alongside Ship
(Insert named port of shipment)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

FAS Negotiable

• Exporter needs to clear the goods for export

• The buyer must contract at its own cost for the carriage
• When the seller’s assistance is required in making the contract with the
carrier the seller may act at the buyer’s risk and expense.
• Identifying the loading point precisely
• Only used in sea or inland waterway transport

In the place of delivery risks & cost transfers to buyer’s account

FOB ǀ Free On Board “Free On Board” means that the seller delivers the
(Insert named port of shipment) goods to the buyer on board the vessel nominated by
the buyer at the named port of shipment or procures
the goods already so delivered.

The risk of loss of or damage to the goods transfers

when the goods are on board the vessel, and the buyer
bears all costs from that moment onwards.
 FOB ǀ Free On Board
(Insert named port of shipment)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

FOB Negotiable

• Exporter needs to clear the goods for export

• The buyer must contract at its own cost for the carriage
• When the seller’s assistance is required in making the contract with the
carrier the seller may act at the buyer’s risk and expense.
• Identifying the loading point precisely
• Only used in sea or inland waterway transport
 “Cost and Freight” means that the seller delivers the
CFR ǀ Cost and Freight goods to the buyer on board the vessel or procures
(Insert named port of destination) the goods already so delivered.
The risk of loss of or damage to the goods transfers
when the goods are on board the vessel.
However, the seller must contract for and pay the
costs and freight necessary to bring the goods to the
named port of destination.

In CFR, the seller owes no obligation to the buyer to

purchase insurance cover: the buyer would be well-
advised therefore to purchase some cover for itself.
 CFR ǀ Cost and Freight
(Insert named port of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

CFR Negotiable

In CFR, two ports are important here: •Exporter needs to clear the goods for export
The port where the goods are delivered on board the vessel and • The risk of loss or damage to the goods occurring after
The port agreed as the destination of goods. the delivery has been made to the carrier is transferred
from the seller to the buyer
• Only used in sea or inland waterway transport
 “Cost, Insurance and Freight” means that the seller delivers the
CIF ǀ Cost, Insurance & goods to the buyer on board the vessel or procures the goods
Freight already so delivered.
(Insert named port of destination)
The risk of loss of or damage to the goods transfers when the goods
are on board the vessel.

The seller must contract for and pay the costs and freight necessary
to bring the goods to the named port of destination.

The seller must also contracts for insurance cover against the buyer’s
risk of loss of or damage to the goods from the port of shipment to at
least the port of destination.
 CIF ǀ Cost, Insurance & Freight
(Insert named port of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

CIF

•Exporter needs to clear the goods for export

In CIF, two ports are important : •Under the CIF Incoterms 2020 rule the seller is required to
The port where the goods are delivered on
obtain limited insurance cover complying with the Institute
board the vessel and
of Cargo Clauses(C) or similar clauses. It is, however, still
The port agreed as the destination of goods.
open to the parties to agree on a higher level of cover.
Where destination country requires insurance cover to
be purchased locally, in this case parties should consider
selling and buying under CFR.
• Only used in sea or inland waterway transport
 “Carriage Paid To” means that the seller delivers
the goods- and transfers the risk- to the buyer by
handing them over to the carrier contracted by the
CPT ǀ Carriage Paid To seller or by procuring the goods so delivered.
(Insert named place of destination)
The seller may do so by giving the carrier
physical possession of the goods in the manner
and at the place appropriate to the means of
transport used.

The seller must contract for and pay the costs of

carriage necessary to bring the goods to the
named place of destination.
 CPT ǀ Carriage Paid To
(Insert named place of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

CPT Negotiable

Two locations are important here: •Exporter needs to clear the goods for export
1. The place or point (If any) at which goods are • Identifying the place or point of delivery with
delivered (for the transfer of risk) and precision
2. The place or point agreed as the destination of • The risk of loss or damage to the goods occurring
the goods( at the point to which the seller after the delivery has been made to the carrier is
premises to contract for carriage). transferred from the seller to the buyer
• Can be used across all modes of transport
Example: First Carrier
 “Carriage & Insurance Paid to” means that the seller delivers
the goods- and transfers the risk- to the buyer by handing
CIP ǀ Carriage & Insurance them over to the carrier contracted by the seller or by
Paid to procuring the goods so delivered.
(Insert named place of destination)
The seller may do so by giving the carrier physical possession
of the goods in the manner and at the place appropriate to the
means of transport used.

The seller must contract for and pay the costs of carriage
necessary to bring the goods to the named place of destination.
The seller must also contracts for insurance cover against the
buyer’s risk of loss of or damage to the goods from the point
of delivery to at least the point of destination.
 CIP ǀ Carriage & Insurance Paid to
(Insert named place of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

CIP

•Exporter needs to clear the goods for export

•Under the CIP Incoterms 2020 rule the seller is required to
In CIP two locations are important: obtain extensive insurance cover complying with the Institute
The place or point at which goods are delivered of Cargo Clauses(A) or similar clauses. It is, however, still
(for the transfer of risk) and open to the parties to agree on a lower level of cover.
The place or point agreed as the destination of the Where destination country requires insurance cover to be
goods( as the point to which the seller purchased locally, in this case parties should consider selling
premises to contract for carriage). and buying under CPT.
•Can be used across all modes of transport
 CIP ǀ Carriage & Insurance Paid to
(Insert named place of destination)

Changes in Incotrm 2020

Taking into account feedback from global users, the
CIP Incoterm rule now requires a higher level of
cover, complaint with the Institute of Cargo Clause
(A) or similar clauses.
 “Delivered at Place” means that the seller delivers when the
goods are placed at the disposal of the buyer on the arriving
DAP ǀ Delivered at Place means of transport ready for unloading at the named place of
(Insert named place of destination) destination or at the agreed point within that place, in any such
point is agreed.

The seller bears all risks involved in bringing the goods to the
named place of destination or the agreed point within that
place.

In this Incoterms rule, therefore, delivery and arrival at

destination are the same.
 DAP ǀ Delivered at Place
(Insert named place of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

DAP Negotiable

•Exporter needs to clear the goods for export

•Importer needs to clear the goods for imports
• if the sellers incurs unloading costs at the place of destination , unless previously
agreed they are not entitled to recover any such costs
• Identifying the place or point of delivery/destination precisely
• Risk of loss in import clearance
• Can be used across all modes of transport
DPU ǀ Delivered at Place “Delivered at Place Unloaded” means that the seller
delivers the goods- and transfers risk- to the buyer when
Unloaded the goods, once unloaded from the arriving means of
(Insert named place of destination)
transport, are placed at the disposal of the buyer at a
named place of destination or at the agreed point within
that place, if any such point is agreed.

The seller bears all risks involved in bringing the goods

to and unloading them at the named place of destination.
 DPU ǀ Delivered at Place Unloaded
(Insert named place of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

DPU Negotiable

•Exporter needs to clear the goods for export

•Importer needs to clear the goods for imports
• DPU is only Incoterm that requires exporter to unload the goods at destination
•Identifying the place or point of delivery/destination precisely
• Risk of loss in import clearance
• should the parties intend the seller not to bear the risk and cost of unloading, the
DPU rule should be avoided and DAP should be used instead.
• Can be used across all modes of transport
 DPU ǀ Delivered at Place Unloaded
(Insert named place of destination)

Changes in Incotrm 2020

The former Delivered at Terminal (DAT) has been changed to Delivered
at Place Unloaded (DPU) to emphasize that the place of destination can
be any place and not just a “ Terminal,” and to underscore the sole
difference from Delivered at Place Unloaded (DPU) – under DAP the
seller does not unload the goods, under DPU, the seller does unload the
goods.

And since delivery under DAP happens before unloading, Incoterms ®

2020 presents the newly named DPU after DAP.
 “Delivered Duty Paid” means that the seller delivers
the goods to the buyer when the goods are placed at
DDP ǀ Delivered Duty Paid the disposal of the buyer, cleared for import on the
(Insert named place of destination)
arriving means of transport ready for unloading at the
named place of destination or at the agreed point
within that place, if any such point is agreed.

The seller bears all the costs and risks involved in

bringing the goods to the place of destination and has
an obligation to clear the goods not only for export
but also for import, to pay any duty for both import
and export and to carryout all customs formalities.
 DDP ǀ Delivered Duty Paid
(Insert named place of destination)

Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

DDP Negotiable

•Exporter needs to clear the goods both for export & Import
• Importer needs to unload the goods at destination
•Identifying the place or point of delivery/destination precisely
• Risk of loss in import clearance
• if the seller is unable to obtain import clearance and would rather leave that side of
things in the buyer’s hands in the country of import, then the seller should consider
choosing DAP or DPU.
• Maximum responsibility of exporter
• Can be used across all modes of transport
Incoterm Export Loading Delivery to Export Origin Loading on Carriage Insurance Destination Import Delivery to Unloading to
2020 Packaging Charges Port/Place duty, Terminal Carriage Charges Terminal duty, Destination Destination
Custom Charges Charges Custom
Clearance Clearance

EXW Negotiable

FCA Negotiable

FAS Negotiable

FOB Negotiable

CFR Negotiable

CIF
CPT Negotiable

CIP
DAP Negotiable

DPU Negotiable

DDP Negotiable

Exporters Importers
Responsibilities Responsibilities
 How Best to Incorporate the Incoterms Rules

If parties want the Incoterms 2020 rules to apply to their contract, the safest way to ensure this
is to make that intention clear in their contract, through words such as

“[the chosen Incoterms rule][named port, place or point]Incoterms 2020”

For example,
CIF Shanghai Incoterms 2020, or
DAP No 123, ABC Street, Importland Incoterms 2020

Place & Version

FCA, CIP
Rules for the Contract of Sale and their Relationship
to other Contracts
 Differences between Incoterms 2010 and
Incotems 2020
INCOTERMS 2010 INCOTERMS 2020
EXW EX WORKS EXW EX WORKS

FCA FREE CARRIER FCA FREE CARRIER

FAS FREE ALONGSIDE SHIP FAS FREE ALONGSIDE SHIP
FOB FREE ON BOARD FOB FREE ON BOARD

CPT CARRIAGE PAID TO CPT CARRIAGE PAID TO

CFR COST AND FREIGHT CFR COST AND FREIGHT
CIP CARRIAGE AND INSURANCE PAID TO CIP CARRIAGE AND INSURANCE PAID TO
CIF COST INSURANCE AND FREIGHT CIF COST INSURANCE AND FREIGHT

DAP DELIVERED AT PLACE DAP DELIVERED AT PLACE

DAT DELIVERED AT TERMINAL DPU DELIDERED AT PLACE UNLOADED
DDP DELIVERED DUTY PAID DDP DELIVERED DUTY PAID
 Differences between Incoterms 2010 and
Incotems 2020

a) Bills of Lading with an on-board notation and the FCA Incoterms ® rule
b) Costs, where they are listed
c) Different levels of insurance cover in CIF and CIP
d) Arranging for carriage with seller’s or buyer’s own means of transport in
FCA, DAP, DPU and DDP
e) Change in the three-letter initials for DAT to DPU
f) Inclusion of security-related requirements within carriage obligations and
costs
g) Explanatory Notes for Users
Bills of Lading with an on-board notation and the FCA Incoterms ® rule
Free Carrier (FCA) has been revised for Incoterms ® 2020 to cater to a situation
where goods are sold FCA for carriage by sea and buyer or seller (or either party’s Key
bank) requests a bill of lading with an on-board notation. FCA in article A6/B6 now Changes in
provides for the parties to agree that the buyer will instruct the carrier to issue an on- Incoterms®
board bill of lading to the seller once the goods have been loaded on board, and for 2020
the seller then to tender the document to buyer (often through the banks).

Costs, where they are listed

Within Incoterms ® 2020, all cost associated with a given Incoterms rule now appear
at article A9/B9 of that rule, allowing users to see the full list of expected cost at a
glance. In addition to the aggregated presentation, the costs associated with each
item- for example, carriage (article A4/B4) or export clearance (article A7/B7)-still
appear in the respective articles to accommodate a user who wants to focus on a
specific aspect of the sale transaction.
In Incoterm 2010 the user had to look across several articles within each rule to see
who bore the costs.
 Change in the three-letter initials for DAT to DPU

Key
DAT DPU Changes in
Delivered at Terminal
Delivered at Place Unloaded Incoterms®
2020

DAT limits the place of delivery to a terminal. Word “Terminal” often

caused confusion.
The former Delivered at Terminal (DAT) has been changed to Delivered
at Place Unloaded (DPU) to emphasize that the place of destination can
be any place and not just a “ Terminal,” and to underscore the sole
difference from Delivered at Place Unloaded (DPU) – under DAP the
seller does not unload the goods, under DPU, the seller does unload the
goods.
And since delivery under DAP happens before unloading, Incoterms ®
2020 presents the newly named DPU after DAP.
Different levels of insurance cover in CIF and CIP

The Incoterm Rules 2020 provide for different levels of insurance coverage in the Cost Key
Insurance and Freight (CIF) rule and Carriage Insurance and Paid To (CIP) rule. Changes in
Incoterms®
2020
Under the CIF Incoterm rule, which is reserved for use in maritime trade and is often used in
commodity trading, the Institute Cargo Clause (C) remains the default level of coverage, giving
parties the option to agree to a higher level of insurance cover. Taking into account feedback
from global users, the CIP Incoterm rule now requires a higher level of cover, complaint with the
Institute of Cargo Clause (A) or similar clauses.

Arranging for carriage with seller’s or buyer’s own means of transport in FCA,
DAP, DPU and DDP
Incoterms ® 2020 recognizes that not all commercial trade transactions from the seller to the
buyer are conducted by third party carrier. In some cases, transactions are conducted without
a third party carrier at all, such as a seller using its own means of transportation or a buyer
using its own vehicle to collect goods.
Inclusion of security-related requirements within carriage obligations and costs

Building on the extensive security-related requirements established by Incoterms ®

2010, the latest edition of the Incoterms ® rules includes clearer and more detailed Key
security-related obligations in articles A4 on carriage and A7 on export/import Changes in
Incoterms®
clearance of each Incoterms ® rule. Costs relating to these requirements also appear 2020
in the consolidated costs article, A9/B9.

Explanatory Notes for Users

Incoterms® 2020 also incorporates expanded explanatory notes for users at the start of each
Incoterms ® rule. These explanatory notes assist users with accurately interpreting the latest
edition of the Incoterms rules to avoid costly misinterpretations or misapplications.
Differences between Incoterms 2010 and
Incotems 2020 Key
Changes in
Incoterms®
2020
 Import using Incoterms- as per Import Policy Order

Goods can be imported through water, land and airways on the basis of defined Incoterms :
Provided that in case of import on FOB basis, the concerned importer shall have to properly
comply with the Foreign Exchange Regulation Act, 1947 and rules made there under.
Goods can be imported by using other Incoterms except DDP, CIF and CIP
Unless there is specific provision in the relevant loan agreement or project agreement concluded
with the foreign donors for import on CIF or CIP basis, no import shall be allowed on CIF or CIP
basis without prior approval from the Ministry of Commerce
Any expatriate Bangladeshi with income earned abroad and any foreign investor with his share of
equity can send capital machineries & raw materials on CIF or CIP basis
Goods from foreign countries free of cost or gift goods are importable on CIF or CIP basis
Food goods can be imported by Ministry of Food and Ministry of Relief and Rehabilitation
Management on CIF or CIP basis

?
 Using appropriate Incoterms as per GFET

In EXP form, ADs shall use appropriate incoterms issued by the International
Chamber of Commerce. ADs are allowed to use any of the terms as EXW,
FCA, FOB, FAS, CFR, CIF, CPT and CIP provided those are stipulated in the
relevant LCs or sales contracts. ADs are however, strongly advised to inform
the exporters about the risk and responsibility involved in such cases.

While certifying the EXP forms, the ADs must show the FOB or its equivalent
value and cost of freight, insurance and other charges separately on the EXP
forms. The ADs, while certifying realisation of the export proceeds will in
addition to the certificate in the appropriate column, also indicate on the
reverse of the Second Original EXP form the FOB equivalent value, insurance
and freight separately. For this purpose they may use a rubber stamp as
appropriate.
 Using appropriate Incoterms as per GFET

This is to mention that, FCA incoterm will be used in LC/contract if goods are to
be delivered by exporters to the buyer's nominated person prior to loading on
board a vessel. Exporters may face additional risks and incur extra costs if FOB
term is used in such cases instead of FCA. ADs are therefore, advised to
satisfy themselves that contracts/LCs reflect accurate terms and conditions
of the Incoterm stipulations before advising the same to the beneficiaries.

Inconsistency, if any, should be informed immediately to the LC issuing bank for

necessary amendment with intimation to the beneficiary. ADs shall also keep
their exporter customers informed of the appropriate terms and conditions
against applicable Incoterms for export so that they can insist foreign buyers to
get LCs issued/contract accordingly.
 RECAP

Rules for any Modes of Rules for Sea and Inland Waterway
Transport Transport
E Term : EXW ǀ Ex Works
FAS ǀ Free Alongside Ship
F Terms : FCA ǀ Free Carrier
FOB ǀ Free On Board

C Terms : CPT ǀ Carriage Paid To CFR ǀ Cost and Freight

CIP ǀ Carriage and Insurance Paid To CIF ǀ Cost Insurance and Freight

D Terms : DAP ǀ Delivered at Place

DPU ǀ Delivered at Place Unloaded
DDP ǀ Delivered Duty Paid Why 11 Incoterms?
 RECAP
Export Country Carriage Import/ Destination Country

Port of Port of Import Transport Importer

Exporter Transport Export
Beijing Clearance Loading Carriage Discharge Clearance Dhaka
Bangladesh
China

EXW ǀ FCA FAS ǀ FOB CFR ǀ CIF ǀ CPT ǀ CIP DAP ǀ DPU ǀ DDP
‘E, F’ Terms: (Export Country) ‘C’ Terms: Main Carriage Paid ‘D’ Destination Term: Export Country

10000 Computer Monitors

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