INTERNATION

AL
COMMERCIAL
TERMS

PRESENTED BY

IMPORT & EXPORT

Import is process in which goods are
purchased from other country and export is
a process in which goods are sold to other
country. In import process two parties
involved Importer & Exporter.
Importer :Who import or purchase the
goods from other country.
Exporter :Who sell or export the goods to
importer country.

IMPORT PAYMENT METHOD:

TT/ADVANCE PAYMENT.
CAD
LETTER OF CREDIT

LETTER OF CREDIT
A Letter of Credit is just a guarantee given by one
bank to third party i.e, exporter. The guarantee
ensured that he ill receive payment of his good
provided. It also ensure to the importer that
payment to the exporter ill only be made when
goods have been received.

TYPES OF LETTER OF CREDIT:

Red Clause LC.
Green Clause LC.
Irrevocable LC.
Revocable LC.
Confirmed LC.
Un-confirmed LC.

Red Clause LC:

Under such LC the opening bank authorized the
paying bank to provide finance to the exporter so
that he can purchase goods for the shipments.
Such type advance called pre shipment advance.
Green Clause LC.
Pres shipment advance + storage and ware
houses charges.

Irrevocable LC.
Such type of LC that cannot be cancelled or
modified by the opening bank.
Revocable LC.
Such type of LC can be modified and cancelled by
the opening bank without the notice.

Confirmed LC.
Under such LC the exporter bank give absolute
undertaking that exporter will be paid even if LC
issuing bank fail to make payment.
Un-Confirmed LC.
Under such LC, there is no any guarantee
involved for the payment.

BEST TYPE OF LC
These are different type of LCs but we can see
that for an exporter point of view the best form of
Letter of Credit is confirmed & irrevocable LC.

PARTIES INVOLVED IN LETTER OF CREDIT.

Importer.
Exporter.
Issuing Bank.
Paying Bank.

LC OPENING PROCESS.
Proforma Invoice.
Application of Letter of Credit.
LC Opening Letter.
Additional Conditions Letter.
Insurance Arrangement.

DOCUMENTS INVOLVED IN LETTER OF

CREDIT.
Proforma Invoice.
Commercial Invoice.
Packing Lists.
Certificate of Origin.
BL/Air Way Bill.

GOODS CLEARANCE PROCESS:

DO From Shipping Line.
GD Filling with Duty Submission.
Assessment Process.
Examination Process.
Mark to Gate Authority.
Consignment Released.

NTERNATIONAL COMMERCIAL TERMS

International
Commercial
Terms
are
internationally recognized standard trade terms
used in the import & export process to decide
who is responsible for the cost of transporting the
goods, including insurance, taxes and duties, here
the goods should be picked up from and
transported to, who is responsible for the goods
at each step during transportation.

History & Background International

Commercial Terms
Published

by the International Chamber of Commerce

(ICC), located in France
ICC issued first Incoterms in 1936
11 terms of shipment and delivery in Incoterms 2010
(13 terms in Incoterms 2000)
Effective 1/1/2011 ICC publication #715
Revisions are approximately every decade in recent
history (1980, 1990, 2000, 2010)

For All
Mode
EXW
FCA
CPT
CIP
DAP
DAT
DDP

For Sea Mode

FAS
FOB
CFR
CIF

11 INCOMTERMS
E Group
EXW -EX WORKS

C Group
CFR - COST AND FREIGHT
CPT - CARRIAGE PAID TO
CIF - COST, INSURANCE &
FREIGHT
CIP - COST, INSURANCE
PAID TO

F Group
FAS - FREE ALONGSIDE SHIP
FOB - FREE ON BOARD
FCA - FREE CARRIER AT..

D Group
DAT - DELIVERED AT TERMINAL
DAP DELIVERED AT PLACE
DDP - DELIVERED DUTY PAID

EXW - Ex Works
The seller makes the goods available, packed and ready
for collection at the place of receipt (factory). The buyer
must bear all the risks and charges in taking the goods to
the required destination. This term carries the minimum
obligation for the seller.

FCA - FREE CARRIER AT

The seller is responsible for delivering the goods into the custody of the
transport carrier at the named point, having cleared the goods through Customs
in the country of export. The responsibility for, and the risks of damage to or
loss to the goods is transferred from the seller to the buyer at this point. It is
based on the same principle as FOB except that the seller fulfils his obligations
when s/he delivers the goods into the custody of the carrier at the named point.

FAS - FREE ALONGSIDE SHIP

Under this term, it is the sellers responsibility to deliver the goods alongside
the ship on the quay in the port of loading, having cleared the goods through
Customs in the country of export. The buyer must bear all the costs and risks
from that point onwards

FOB - FREE ON BOARD

Under this term, the seller is responsible for delivering the goods on board
the ship at the named port of loading. The responsibility for, and risk of
damage to or loss of, the goods pass from the seller to the buyer when the
goods pass a ships rail.

CFR - COST AND FREIGHT

The seller is responsible for paying the costs and freight to bring the goods
to the named port of destination. The risk of loss or damage to the goods is
transferred from the seller to the buyer when the goods pass the ships rail at
the port of loading.

CPT - CARRIAGE PAID TO..

The seller is responsible for arranging the carriage and paying the freight to
the named destination, but the risk of loss of, and damage to, the goods,
passes from the seller to the buyer when the goods have been delivered into
the charge of the carrier in the country of export

CIF - COST, INSURANCE & FREIGHT

This term is the same as CFR, except the seller has to procure, and pay
for, marine insurance for the goods during their carriage.

CIP - CARRIAGE & INSURANCE PAID

This term is the same as CPT but the seller also has to procure, and pay for,
marine insurance for the goods. Similar to CIF, CIP is suitable for multimodal
transportation.

DAT - DELIVERED AT TERMINAL

The seller pays for transport to a specified terminal at the agreed destination.
The buyer is responsible for the cost of importing the goods. The buyer takes
responsibility once the goods are unloaded at the terminal.

DAP..DELIVERED AT PLACE

The seller pays for transport to the specified destination, but the buyer pays
the cost of importing the goods. The seller takes responsibility for the
goods until they are ready to be unloaded by the buyer.

DDP- DELIVERED DUTY PAID

The seller is responsible for delivering the goods to the named place of
destination having cleared them for import into the country of destination. This
term represents the maximum obligation for the seller.

THANK
YOU