Useful information

Commercial terms

EXW –Ex Works

"Ex works" means the seller performs its liability to deliver the goods by keeping them ready in favor of the purchaser at his business (factory, store etc.) Unless otherwise decided, the seller shall not be responsible for the goods’ being loaded to a vehicle supplied by the purchaser and their going through the export customs. The purchaser shall bear all the responsibility for all the expenses and risks related to the transportation of the goods upon the transfer of the goods at the customs until the destination. Such term is the sales type that contains the least liabilities for the seller among all the other means of selling.

In this kind of delivery, only the cost of the packaged goods shall be included in the sales price specified in the contract.  That is, all kinds of transportation, loading, unloading and insurance expenses are paid by the purchaser starting from the date of delivery.

FCA- Free Carrier

This term implies that the liability of the seller to deliver comes to an end after the goods have been through the export customs to the delivery thereof to the carrier specified by the purchaser at the specified place or point.

If a certain place of delivery has not been specified by the purchaser, the seller may determine a place near the area where the carrier will take delivery of the goods. If commercial practices require assistance from the seller in order for the contract to be concluded with the carrier (for example: rail and air transportation), the seller may act in such a way that the risks and expenses will be born by the purchaser.

FAS- Free Alongside Ship ( at the port of loading specified as ……… )

The term “Free alongside the Ship” implies the delivery of goods by the seller at the specified port of loading when the goods are placed facing the ship. This means that the purchaser assumes all the expenses, risks of losses and damages relating to the goods as of that moment. The term FAS requires that the goods be cleared through the customs for export.

This is just the opposite of the previous Incoterms Versions prescribing the performance of the customers procedures required for the export by the purchaser. However, if the parties require that the goods be cleared through customs by the purchaser for the export, this should be specified in the open expressions to be added to the sales contract. This term can be used only for sea or inland water transportation.


FOB – Free on Board

This term implies that the liability of the seller to deliver shall have been performed the moment the goods open the bulwark of the ship at the specified port of loading. All the risks of expenses, losses or damages relating to the goods shall, as of this moment, be born by the purchaser. If the bulwark of the ship means nothing in practice (as is the case in the roll-on/ roll-off or container transportation) , it would be better to use the term FCA.

CFR - Cost and Freight (C+F, Cf)

This term implies that the seller has to pay all the expenses and freight to be able to send the goods to the specified port of arrival. However, risks of losses and damages relating to the goods and an increase in the expenses shall be transferred from the seller to the purchaser from the moment the goods pass through the bulwark at the port of loading. The CFR states that the seller has to clear the goods for export through the customs.

CIF - Cost, Insurance and Freight

This term implies that the seller bears the same liabilities as he does in CFR. However, besides that, he has to provide marine insurance against the risk of losses or damages during the transportation of goods. The seller concludes the insurance contract and pays the insurance premiums. The purchaser must know that, according to this term, that he has the liability to obtain only a minimum coverage.

This term implies that the seller has to clear the goods through the customs for the export. This term is used for only sea and inland water transportation. If the ship’s bulwark means nothing in practice, it will be more suitable to use the term CIP.


CPT - Carriage Paid To

This term implies that the seller has paid the freight required for the goods to be carried to the agreed destination. The additional expenses that might arise from delivery to the carrier together with the risks relating to the losses and damages to the goods shall be transferred from the seller to the purchaser from the moment the goods are transferred to the carrier’s custody.

The carrier is the person taking on the transportation procedure resulting from iron, land, sea, air, inland water transportation or the combination of these in a transportation contract.


CIP - Carriage and Insurance Paid To

This term implies that the seller has the same liabilities as in the CPT: However, in addition to all those, he has to establish the cargo insurance against the risk of losses or damages during the transportation of the goods. The seller shall conclude the insurance contract and pay the insurance premiums.

DAF - Delivered At Frontier

This term implies that the seller’s liability to deliver comes to an end only when the goods pass through the customs to be imported and held at disposal in the place or at the point specified at the frontier but before the customs border of the adjacent country.

The term “border” can be used for any border including the border of the country of export. Therefore, the definition of the said border inherent in the term as a certain point or place is of vital importance.

DES- Delivered Ex Ship

This term implies that the liability of the seller to deliver comes to an end when he holds the goods at disposal at the specified port of destination, at the ship’s board, before they pass through the import customs. The seller shall bear all the expenses and risks required to bring the goods to the specified port of destination. This term can only be used for sea or inland water transportation.

DEG - Delivered Ex Quay (Duty Paid) (By specifying as ……………… port of arrival)

The term “Delivered Ex Quay” implies that the seller delivers the goods upon leaving them to his disposal at the embankment at the specified port of arrival, the required clearance procedures not performed. The seller must bear all the damages and expenses relating to the transportation of the goods to the specified port of arrival and unloading thereof to the embankment. The term DEQ, prescribes that the clearance of the goods to be imported and all the procedures, taxes, dues and other fees relating thereto be paid by the purchaser.

This is the opposite of the previous Incoterms versions prescribing the performance of the clearance procedures required for the import by the seller.

However, if the parties want to add the expenses incurred during the import of the goods to the liabilities of the seller as a whole or in part; this must be clarified with an open expression to be added to the sales contract to this end.

This term can be used only when the goods will be delivered by way of being unloaded to the embankment from the ship at the port of arrival through the sea route or inland water or a multi-agent transportation. That being said, if the parties want to add the expenses and damages relating to the transfer of the goods from the embankment to another place inside or outside the port, the terms DDU or DDP must be used.


DDU- Delivered Duty Unpaid

This term implies that the liability of the seller to deliver comes to an end when he holds the goods at disposal in the import company at a specified place. The seller has to assume all the risks and expenses relating to the transfer of the goods up to that point and the performance of customs formalities (excluding the taxes, dues and fees that must be paid for the import)
The purchaser has to assume the extra expenses and risks arising from a failure to clear the goods for import on time.

If the parties want the seller to perform the customs formalities and assume the expenses and risks that might arise from it , they must ensure this by adding words that will create this effect. If the parties want to add some expenses required for the import of goods to the liabilities of the seller (i.e. VAT), they must confirm this adding words to the same effect. This term may be used independent from the method of transportation.