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Purpose and scope of INCOTERMS 2000 The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods. Incoterms deal with a number of identified obligations imposed on the parties and the distribution of risk between the parties. In total 13 Incoterms have been defined which are grouped into four basically different categories, applicable for sea and inland waterway transport or for all modes of transport:

	Applicable for sea transport only	Applicable for all modes of transport (including water)
Departure term		EXW (Ex Works)
Shipment term, main carriage unpaid	FAS (Free Alongside Ship) FOB (Free On Board)	FCA (Free Carrier)
Shipment term, main carriage paid	CFR (Cost and Freight) CIF (Cost, Insurance and Freight)	CPT (Carriage Paid To) CIP (Carriage and Insurance Paid to)
Delivery term	DES (Delivered Ex Ship) DEQ (Delivered Ex Quay)	DAF (Delivered At Frontier) DDU (Delivered Duty Unpaid) DDP (Delivered Duty Paid)

From top (EXW) to bottom (DDP) the point of transfer in the transport chain moves from the sellers premises to the buyers place. The second and third group specify the shipment conditions, with freight and insurance unpaid or paid. For the first 3 groups the risk of loss or damage during (sea) transportation are with the buyer of the goods, whereas for the fourth group all risks up to delivery are with the seller of the goods. In order to assist you in determining which INCOTERM would be most suitable for your specific situation, we have created two interactive schemes to guide you to the proper term:

Incoterm scheme for the seller of goods, i.e. if you are selling or exporting goods to an overseas party.   Incoterm scheme for the buyer of goods, i.e. if you are buying or importing goods from an overseas party.

For a full description of all obligations and risks associated with a specific term, please refer to INCOTERMS 2000 as published by the International Chamber of Commerce. For a complete description of the INCOTERMS look up the approriate term in the dictionary.