《國(guó)際貿(mào)易實(shí)務(wù)與操作》Chapter 4

國(guó)際貿(mào)易實(shí)務(wù)與操作

InternationalTradePracticeandOperation1Chapter4TradeTermsTeachingObjectives1.Distinguishshipmentcontractfromdestinationcontract.2.Discussthefunctionsandmeaningsofthe13Incoterms.3.Explainexportcostswithdifferenttradeterms.2Section1TradeTerms

andtheSalesContract

Atradeterm,asdefinedintheInternationalRulefortheInterpretationofTradeTermsorIncoterms(2000),publishedbytheInternationalChamberofCommerce(ICC),isathree-letteracronymthatallocatesthecost,riskoflossandresponsibilitiesoftransportingthegoodsbetweenthesellerandbuyer.ThepurposeofIncotermsistoprovideasetofinternationalrulesfortheinterpretationofthemostcommonlyusedtradetermsininternationaltrade.3Section1TradeTerms

andtheSalesContract1.PriceTermsoftheSalesContractThe

unitpriceofacommodityismadeupof:anameofcurrency,priceperunit,measuringunit,tradeterm,andanameofdestinationorshippingplace.Forexample,“US$100perdozenCIFNEWYORK”.4Section1TradeTerms

andtheSalesContract2.IncotermsandtheDivisionofCostsandRisksIncoterms2000comprise13differenttermsgroupedinfourcategories:GroupE(EXW),departure.GroupF(FCA,FAS,FOB),maincarriageunpaidbytheseller.GroupC(CFR,CIF,CPT,CIP),maincarriagepaidbytheseller.GroupD(DAF,DES,DEQ,DDU,DDP),arrival.5Section1TradeTerms

andtheSalesContract3.ShipmentandDestinationContractsInashipmentcontract,theriskoflosspassestothebuyeratthepointofshipment．Inadestinationcontract,theriskoflosspassestothebuyeratthepointofdestination．Theriskoflossreferstowhichpartywillsufferthelossofdamagedorlostgoods．Shipmentcontractcallsforsellertoshipgoodsbycarrier,butnottodelivergoodstonamedlocation.However,destinationcontractcallsforsellertodelivergoodstoparticulardestination.Shipmentcontractisthemostcommontypeininternationaltrade,includingtheuseoftradetermsinEgroup,Fgroup,andCgroup.6Section1TradeTerms

andtheSalesContractCase4-1(CIFContractorDestinationContract?)FactsThatcaseinvolvedthepurchaseofPhilippinesugarforshipmenttoNewYorkCity．Thetradeterminthecontractstated“Philippine—CIFTerms.”Anotherprovisioninthecontractprovidedthatthesellerwastodeliversugarofa“netdeliveredweight．”ThesugarwasdelayedentryintotheUSduetotheimpositionofagovernmentsugarquota．Thebuyerattemptedtoavoidpaymentbyarguingthatthe“netdeliveredweight”convertedthecontracttoadestinationcontract.Question?WasitaCIFcontractoradestinationcontract?7Section1TradeTerms

andtheSalesContract4.TheDangerofModifyingTradeTermsInpractice,itfrequentlyhappensthatthepartiesthemselvesbyaddingwordstoanIncotermseekfurtherprecisionthanthetermcouldoffer,forinstance,“FOBstowed”.Incotermsgivenoguidancewhatsoeverforsuchadditions.Itisimportanttousethetradetermwithoutfurtherexplanationandtomakesurethatothertermsinthecontractdonotexpresslyconflictwiththetermchosen.8Section1TradeTerms

andtheSalesContractCase4-2(KumarCorp.v.NopalLines,Ltd.).TheUSsellerKumarmadeaCIFcontractwithNavainVenezuela.Butthesellerretainedtitletothegoodsuntilsold,onaconsignmentbasis.Thegoodswerestolenwhileinpossessionofthecommoncarrierattheportofshipment．Question:HowcouldKumaraskforcompensation?9Section2Incoterms2000Summary4Categories:

"E":theselleronlymakesthegoodsavailabletothebuyerattheseller'sownpremises"F":theselleriscalledupontodeliverthegoodstoacarrierappointedbythebuyer"C":thesellerhastocontractforcarriage,butwithoutassumingtheriskoflossofordamagetothegoodsoradditionalcostsduetoeventsoccurringaftershipmentanddispatch"D":thesellerhastobearallcostsandrisksneededtobringthegoodstotheplaceofdestination

10Section2Incoterms2000Summary2.TERMINOLOGY

"Shipper":thetermsignifiesboththepersonhandingoverthegoodsforcarriageandthepersonwhomakesthecontractwiththecarrier:however,thesetwo"shippers"maybedifferentpersons,forexampleunderaFOBcontract."Delivery":itisusedtodeterminewhenthesellerhasfulfilledhisdeliveryobligationwhichisspecifiedintheA4clausesthroughoutIncoterms.(Itisalsousedinthecontextofthebuyer'sobligationtotakeoracceptdeliveryofthegoodsintheB4clausesthroughoutIncoterms.)"Charges","Ship"and"vessel","Checkingand“inspection"11Section2Incoterms2000Summary3.THESELLER'SDELIVERYOBLIGATIONS:

Incotermsfocusontheseller'sdeliveryobligation."thesellermust"(thebuyermust)Thewords“noobligation”havebeeninsertedwheneveronepartydoesnotoweanobligationtotheotherparty.4.PASSINGOFRISKSANDCOSTSRELATINGTOTHEGOODS

Theriskoflossofordamagetothegoods,aswellastheobligationtobearthecostsrelatingtothegoods,passesfromthesellertothebuyerwhenthesellerhasfulfilledhisobligationtodeliverthegoods.5.CUSTOMSCLEARANCE

Thisobligationdoesnotonlyincludethepaymentofdutyandotherchargesbutalsotheperformanceandpaymentofwhateveradministrativemattersareconnectedwiththepassingofthegoodsthroughcustomsandtheinformationtotheauthoritiesinthisconnection.12Section2Incoterms2000Summary1.EXW--ExWorks(...namedplace)Thesellerdeliverswhenheplacesthegoodsatthedisposalofthebuyerattheseller'spremisesoranothernamedplace(i.e.works,factory,warehouse,etc.)notclearedforexportandnotloadedonanycollectingvehicle.

13Section2Incoterms2000Summary2.FCA--FreeCarrier(...namedplace)Thesellerdeliversthegoods,clearedforexport,tothecarriernominatedbythebuyeratthenamedplace.“Carrier”meansanypersonwho,inacontractofcarriage,undertakestoperformortoprocuretheperformanceoftransportbyrail,road,air,sea,inlandwaterwayorbyacombinationofsuchmodes.14Section2Incoterms2000Summary3.FAS--FreeAlongsideShip(...namedportofshipment)Thesellerdeliverswhenthegoodsareplacedalongsidethevesselatthenamedportofshipment.4.FOB--FreeonBoard(...namedportofshipment)Thesellerdeliverswhenthegoodspasstheship’srailatthenamedportofshipment.

15Section2Incoterms2000Summary5.CFR--CostandFreight(…namedportofdestination)Thesellerdeliverswhenthegoodspasstheship’srailintheportofshipment.6.CIF--Cost,Insurance,andFreight(...namedportofdestination)Thesellerdeliverswhenthegoodspasstheship’srailintheportofshipment.7.CPT--Carriagepaidto(…namedplaceofdestination)Thesellerdeliversthegoodstothecarriernominatedbyhimbutthesellermustinadditionpaythecostofcarriagenecessarytobringthegoodstothenameddestination.8.CIP--CarriageandInsurancePaidto(…namedplaceofdestination)Thesellerdeliversthegoodstothecarriernominatedbyhimbutthesellermustinadditionpaythecostofcarriagenecessarytobringthegoodstothenameddestination.16Section2Incoterms2000Summary9.DAF--DeliveredatFrontier(...namedplace)Thesellerdeliverswhenthegoodsareplacedatthedisposalofthebuyeronthearrivingmeansoftransportnotunloaded,clearedforexport,butnotclearedforimportatthenamedpointandplaceatthefrontier,butbeforethecustomsborderoftheadjoiningcountry.10.DES--DeliveredExShip(…namedportofdestination)Thesellerdeliverswhenthegoodsareplacedatthedisposalofthebuyeronboardtheshipnotclearedforimportatthenamedportofdestination.11.DEQ--DeliveredExQuay(…namedplaceofdestination)Thesellerdeliverswhenthegoodsareplacedatthedisposalofthebuyer,notclearedforimportonthequay(wharf)atthenamedportofdestination.

17Section2Incoterms2000Summary12.DDU--DeliveredDutyUnpaid(…namedplaceofdestination)Thesellerdeliversthegoodstothebuyer,notclearedforimport,andnotunloadedfromanyarrivingmeansoftransportatthenamedplaceofdestination.13.DDP--DeliveredDutyPaid(…namedplaceofdestination)Thesellerdeliversthegoodstothebuyer,clearedforimport,andnotunloadedfromanyarrivingmeansoftransportatthenamedplaceofdestination.

18Section2Incoterms2000Summary6.CompareandContrastthe4CategoriesThe"E"-thesellerhastodonomorethanplacethegoodsatthedisposalofthebuyerattheagreedplaceusuallyattheseller'sownpremises.The"F"-termsrequirethesellertodeliverthegoodsforcarriageasinstructedbythebuyer.The'C"-termsrequirethesellertocontractforcarriageonusualtermsathisownexpense.OnlytwotermsCIFandCIP,thesellerhastotakeoutinsuranceandbeartheinsurancecost.Insuranceisavailablein"minimumcover".Sincethepointforthedivisionofcostsisfixedatapointinthecountryofdestination,the"C"-termsarefrequentlymistakenlybelievedtobearrivalcontracts.19Section2Incoterms2000SummaryThe"C"-termsareofthesamenatureasthe"F"-termsinthatthesellerfulfilsthecontractinthecountryofshipmentordispatch.ThedeliverypointunderFOBisthesameunderCFRandCIF.the"C"-termsaredistinguishablefromallothertermsinthattheycontaintwo"critical"points:

oneindicatingthepointtowhichthesellerisboundtoarrangeandbearthecostsofacontractofcarriage,andanotheronefortheallocationofrisk.20Section2Incoterms2000SummaryTheessentialnatureofthe"C"-termsareshipmentcontracts.Thesellershouldnot-andindeedcouldnot,withoutchangingtheverynatureofthe"C"-terms-undertakeanyobligationwithrespecttothearrivalofthegoodsatdestination,sincetheriskofanydelayduringthecarriageisbornebythebuyer.Forexample,“CFRHamburgnotlaterthan…”1.ThegoodsmustactuallyarriveatHamburgatthespecifieddate,inwhichcasethecontractisnotashipmentcontractbutanarrivalcontract.2.AlternativelythesellermustshipthegoodsatsuchatimethattheywouldnormallyarriveatHamburgbeforethespecifieddateunlessthecarriagewouldhavebeendelayedbecauseofunforeseenevents.

21Section2Incoterms2000SummaryThe"D"-termsaredifferentinnaturefromthe"C"-terms.Theselleraccordingtothe"D"-termsisresponsibleforthearrivalofthegoodsattheagreedplaceorpointofdestinationattheborderorwithinthecountryofimport.Thesellermustbearallrisksandcostsinbringingthegoodsthereto.Hence,the"D"-termssignifyarrivalcontracts,whilethe"C"-termsevidencedeparture(shipment)contracts.Underthe"D"-termsexceptDDP,thesellerdoesnothavetodeliverthegoodsclearedforimportinthecountryofdestination.22Section2Incoterms2000Summary7.MODEOFTRANSPORTANDTHEAPPROPRIATEINCOTERMS2000AnymodeoftransportEXWFCACPTCIPDAFDDUDDPMaritimeandinlandwaterwaytransportonlyFASFOBCFRCIFDESDEQ8.THEBILLOFLADINGANDELECIRONICCOMMERCE

Traditionally,theonboardbillofladinghasbeentheonlyacceptabledocumenttobepresentedbythesellerundertheCFRandCIFterms.Thetransportdocumentmustevidencenotonlydeliveryofthegoodstothecarrierbutalsothatthegoods,asfarascouldbeascertainedbythecarrier,werereceivedingoodorderandcondition."seawaybills",linerwaybills",freightreceipts".

23Section2Incoterms2000SummaryCases4-3(BPOilInternational,Ltd.,Plaintiffs-Appellantsv.Empresa

Estatal

PetroleosdeEcuador,Defendants):Facts:Theseller,BPOilInternational,Ltd.withitsplaceofbusinessintheUSagreedtosell140,000barrelsofunleadedgasolinefromTexas,UStothebuyer,Empresa

Estatal

PetroleosdeEcuadorwithitsplaceofbusinessinEcuador.Thecontractprovidedthatthegasoline'sgumcontentwastobelessthanthreemilligramsperonehundredmillilitersasdeterminedbyathirdpartybeforeshipment.Deliverywastobe“CFRLaLibertad-Ecuador.”Thecontractformstated“Jurisdiction:LawsoftheRepublicofEcuador”.24Section2Incoterms2000SummaryCases4-3Thethirdparty（Saybolt,Inc.）certifiedthatthegumcontentlimitationwassatisfiedbeforeshipment.However,thebuyertestedtheoilafterreceivingitatLaLibertadandfoundthatthelimitwasnotsatisfied.Thebuyerrefusedtoacceptdeliveryoftheoilanddrewuponaletterofguarantee.Question:WasIncoterm(CFR)incorporatedintothesalescontract?

25Section2Incoterms2000SummaryCase4-4

(St.PaulGuardianInsuranceCo.etal.v.NeuromedMedicalSystems&Support):BackgroundsandFacts:PlaintiffsSt.PaulGuardianInsuranceCompanyandTravelersPropertyCasualtyInsuranceCompanyinAmericahavebroughtthisactionassubrogreesofSharedImaging,Inc.(hereinaftercollectivelyreferredtoasBuyer),torecover$285,000theypaidtoSharedImagingfordamagetoamobilemagneticresonanceimagingsystem("MRI")purchasedbySharedImagingfromdefendantNeuromedMedicalSystems&SupportGmbH("Neuromed")(referredtoasSeller)inGermany.TheBuyerandtheSellerenteredintoacontractofsaleforaSiemensHarmony1.0TeslamobileMRI.Accordingtothecomplaint,theMRIwasloadedaboardthevessel"AtlanticCarrier"undamagedandingoodworkingorder.WhenitreacheditsdestinationofCalumetCity,Illinois,ithadbeendamagedandwasinneedofextensiverepair,whichledtheBuyertoconcludethattheMRIhadbeendamagedintransit.26Section2Incoterms2000SummaryCase4-4Theonepagecontractofsalecontainsnineheadings,including:"Product;""DeliveryTerms;""PaymentTerms;""Disclaimer;"and"ApplicableLaw."Under"Product"thecontractprovides,the"systemwillbedeliveredcoldandfullyfunctional."Under"DeliveryTerms"itprovides,"CIFNewYorkSeaport,thebuyerwillarrangeandpayforcustomsclearanceaswellastransporttoCalmutCity."Under"PaymentTerms"itstates,"Bymoneytransfertooneofouraccounts,withfollowingpaymentterms:US$93,000-downpaymenttosecurethesystem;US$744,000-priortoshipping;US$93,000-uponacceptancebySiemensoftheMRIsystemwithin3businessdaysafterarrivalinCalmutCity."27Section2Incoterms2000SummaryCase4-4Under"