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Incoterms (International Commercial Terms) is a set of international standard rules issued by the International Chamber of Commerce (ICC), to regulate the legal responsibilities between buyers and sellers in international goods transactions. This set of rules not only clearly defines costs and risks but also helps minimize disputes and ensure transparency. In this article, we will provide detailed information about Incoterms groups, their roles, and instructions on how to choose the right conditions for customers.
1. What are Incoterms?
Incoterms are a set of internationally recognized rules used to determine obligations, costs and risks between the seller and the buyer during the transportation of goods. Introduced by the ICC in 1936, Incoterms have become an effective tool in international trade.
The latest version, Incoterms 2020, is designed to reflect changes in shipping methods, insurance and globalization trends. Previous versions such as Incoterms 2010 or 2000 were also standard but are now gradually being replaced.
Incoterms apply mainly to the transportation of tangible goods and regulate terms of shipping costs, insurance, and delivery. However, Incoterms do not regulate aspects such as payment methods or transfer of property ownership.
2. Responsibilities of the seller and buyer in transporting goods
Depending on each specific case, the seller and the buyer when transporting goods have equivalent responsibilities. Below are the basic responsibilities of sellers and buyers:
Seller’s responsibilities:
Buyer’s Responsibilities:
Legal meaning of responsibility:
Incoterms not only help clearly define the roles between seller and buyer but also limit the risk of disputes arising from misunderstanding of responsibilities. Customers need to consider carefully to choose Incoterms conditions that suit their capacity and financial ability.
Incoterms are divided into two main groups based on the mode of transport, each group has specific regulations as follows:
1. Groups used for all modes of transport:
2. Groups used specifically for sea and inland waterway transport:
Choosing Incoterms should be considered based on the following factors:
Incoterms are an essential tool in international trade, ensuring rights and minimizing risks for parties involved in transactions. Choosing appropriate conditions not only helps optimize costs but also ensures transparency in international transactions. To receive detailed advice, please contact Long Phan via the hotline 0906735386. We are always ready to accompany and support our customers.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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