Incoterms were invented by the Int'l Chambers of Commerce in the 1930's to provide a means of avoiding disputes between international traders.The term itself means 'International Commercial Trade Terms' and they provide a set of rules, which give certainty to traders when arranging international sales contracts. It is vital that exporters and importers are familiar with, and use these terms, for they define several important responsibilities of the traders, and also define the point where risk transfers from seller to buyer. The inclusion of an Incoterm in an international sale also provides for identification of which party is responsible for particular costs, and allows easy identification of the correct value on which import duties and taxes are calculated.

Using an Incoterm defines the responsibility of the buyer and seller in relation to:
• Obtaining licences, permits or other authorisations to export and import the goods.
• Documents to be prepared and passed from seller to buyer
• Transportation of the goods and the Contract of Carriage
• Transit Insurance
• Division of costs and charges
• Responsibility for packaging, marking and inspection.
• Point of transfer of risk in the cargo from the seller to the buyer.
• Proof of delivery

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• Table of Incoterms