The Exporters Pocketbook Essay Research Paper Sam — страница 5

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destination and is responsible to them until they are delivered there) ? All the Incoterms, which start with the letter D. Insurance This is why insurance is critical (policy types A, B, or C). It must include: Location in which the policy becomes valid Location at which the policy expires Extensions to the basic policy Political risks Value of coverage and types of coverage (replacement value, damages, etc.) Insurance of loss of profits The policy?s currency Currency hedging Important ? The buyer must provide full specifications of packing of goods If the parties use a C Incoterm, the buyer is usually responsible for costs associated with an inspection of the goods by the authorities of the country of origin (PSI ? Pre Shipment Inspection). If the buyer demands an inspection

(quality and quantity controls) ? it must be stated clearly who will bear the cost. If not specified ? the buyer shall bear it. It is recommended to use FCA when goods are not delivered to the carrier on quay or on board. Buyer must arrange the transport and provide the seller with exact instructions. ?FOB Airport? should not be used. FOB is ONLY for marine transportation. For air transport use FCA. Incoterms in conjunction with Bill of Lading (BL) When CIF or CFR is used, use ?on board BL? (goods have been loaded on board ship). If goods shipped in containers, carrier may issue ?Received for Shipment? (when he receives the goods and prior to their loading on board) ? instead of BL. It is preferable to use CPT or CIP if BL not required to conclude the transaction. If goods arrive

prior to original BL ? they are delivered to buyer against a bank guarantee. Avoid it as it negates the function of the BL. Non Negotiable Waybills and Receipts If a waybill is non-negotiable, there is no need to present its original to obtain delivery of the goods. The following are non-negotiable: Liner Waybill Ocean Waybill Data Freight Receipt Cargo Key Receipt Sea Waybill All air waybills are non-negotiable. Only the seller can instruct the carrier (not the buyer or his bank). Importers dislike non-negotiable waybills (unless explicitly stated that they are irrevocable). The names of the parties in the waybill must be irrevocable ? otherwise, the seller can change them. BLs, Receipts and Waybills Let us call all waybills and receipts ? as well as bills of lading ? transport

documents (TD). TDs are delivered to the buyer or to the seller according to instructions given to the carrier (never mind who paid for the carriage). The seller might get them to prove delivery. The buyer needs them to release the goods (to instruct the carrier). TDs can be divisible (article A8 of Incoterms) in case one TD covers goods deliverable to many buyers. Buyers responsible to release the goods and accept delivery ? or to compensate seller for any damages. Buyer is liable for damages to the goods after the transfer of responsibility from seller to buyer (?Price Risk?). It is recommended to use ?Force Majeure? articles in sales contracts. Some countries oblige exporters and importers to insure the goods in their own countries (to minimize foreign exchange outlays). Rules

of Use of Incoterms Use DEQ, DES, CIF, FOB and FAS only in marine carriage and for marine freight. Use CPT, CIP, FCA universally except if goods are in bulk of carried in chartered vessels. Be clear: how are the goods to be transported, who has the obligation to have them loaded, who pays for what, who is responsible to clear the goods, to release them and to unload them and so on. Be clear: how much insurance you require and what type (A, B, C) What restrictions and special demands would you like to impose on the carriage and the carrier. Include ?Force Majeure? and validity, expiry and termination clauses Indicate which Incoterms version is used (example: FOB-Incoterms 1990). The Incoterms CPT, CIP, CFR and CIF deal only with the transport aspect of the transaction ? not with

the transfer of responsibility or ownership. IV. PaymentPayment Payments schedule (when?) Payment mode or method of payment (how?) Place of payment (where?) Currency of payment (which?) Payments Forms Advance payments (cash in advance) Open account credit Cash Against Documents (CAD) Documents for collection, Cash on Delivery (COD) Letter of Credit or Documentary Credit (L/C) General Principles of Payment If cash was paid in advance by buyer, seller will give buyer the documents, courier them to the buyer or airmail them (Captain Mail them). COD ? the carrier delivers the good against cash (collect). But in all other forms of payment: The carrier of the goods is hired by either the seller or the buyer to carry the goods, in accordance with instructions, to a destination. The