Represented by acronyms (3 letters), the international trade terms refers effectively on the sale conditions, for sets the minimal rights and obligations of the supplier and purchaser about all regarding freights, insurances, circulation customs’ releases and the document retrieval from an international price variation clause. That is the reason why they are also called “price clauses”, each term determines the elements of the commodity price.
After consolidated the purchase and sale contract, they get the specific and legal meaning. Wich reflects on the international summary writing of the regarding trade to simplifying and expedite the covenants elaborations.
A good knowledge of INCOTERMS is essential to the trader be able to include all his costs in Foreign Trade transactions. Any misinterpretation may cause large business losses for either or both parties. Thus, is important the terms’ review for each business operation, that avoids the incompatibility of clauses.
In the latest issue, ‘Brochure 560’ of 2000, were aimed small changes, basically for make it easier the procedures (customs clearance, FAS and DEQ payment and shipment plus the discharge at FCA).
