Inco Terms (short for International Commercial Terms) are a set of standardized trade terms that define the responsibilities and obligations of buyers and sellers in international trade. Here are explanations of some commonly used Inco Terms:
- CIP (Carriage and Insurance Paid To): Under CIP, the seller is responsible for arranging and paying for the transportation of goods to a named destination, as well as obtaining insurance against loss or damage during transit. Once the goods are delivered to the carrier, the risk of loss or damage passes to the buyer.
- DDP (Delivered Duty Paid): Under DDP, the seller is responsible for delivering the goods to a named destination and paying for all costs associated with bringing the goods to that destination, including customs duties and taxes. The seller is also responsible for obtaining any necessary import licenses or permits. The risk of loss or damage passes to the buyer once the goods are delivered to the named destination.
- CIF (Cost, Insurance, and Freight): Under CIF, the seller is responsible for arranging and paying for the transportation of goods to a named destination and obtaining insurance against loss or damage during transit. Once the goods are delivered to the carrier, the risk of loss or damage passes to the buyer. The seller is also responsible for paying for the cost of freight.
- DAP (Delivered at Place): Under DAP, the seller is responsible for delivering the goods to a named destination, but is not responsible for unloading the goods at that destination. The risk of loss or damage passes to the buyer once the goods are ready for unloading at the named destination.
In summary, Inco Terms provide a standardized way to communicate the responsibilities and obligations of buyers and sellers in international trade, and are an important tool for ensuring that all parties understand the terms of the transaction.
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