Questions and answers about INCOTERMS


    QUESTION: I am in a situation where my company is exporting pharmaceutical clinical trial materials that were obtained free of charge and are being exported to global locations. Because these samples are not purchased and my company is not selling them to the global locations, I am not sure how to assign the appropriate INCOTERM. […]


    QUESTION: My procurement and sourcing teams are working with vendors to buy equipment and machinery that will be purchased by our US entity for domestic use and by our International Subsidiaries for international transactions. They are drafting contracts that incorporate INCOTERMS into both international and domestic transactions. Do you foresee any issues using INCOTERMS for […]


    QUESTION: We are purchasing costly equipment subject to regular and 301 duties. Most of the contracts were negotiated under DAP but a couple are under DDP. Since we are  going to pay for the freight because it was included in the quote, can we have the supplier identify the cost of the freight separately on […]


    QUESTION: We have a plant in Europe that manufactures product we sell in the US. We take the orders from the US customers in the US and have been shipping from our warehouse in the US. To increase efficiency, we are going to be drop shipping directly from our overseas plant to the end user […]

  • DAP Incoterm- Responsibility of Insurance

    QUESTION: I am see a lot of conflicting information on insurance requirements under DAP incoterm and am looking for answer on liability. We shipped an order to Canada, customer instruction was prepay freight and add. Customer did not specifically request insurance.  We shipped DAP via our chosen Courier- no insurance. Under DAP terms, we as […]


    QUESTION: What is the key difference between Incoterm EXW and FCA for a domestic shipments?  We would be the buyer in this scenario (using our own carrier), but are there much difference considering there is no export clearance? As the buyer, is it more in my favor to suggest FCA(My location)? ========== Answers: The difference […]

  • INCOTERM – difference between Place of Delivery vs Place of Arrival

    QUESTION: What is the difference between “place of delivery” and “place of destination/arrival”.    ·         Delivery: The point in the transaction where the risk of loss or damage to the goods is transferred from the seller to the buyer ·         Arrival: The point named in the Incoterm to which carriage has been paid What is […]

  • Incoterms and Export Regulations

    QUESTION: How do you combine Incoterms and export regulations in order for the business to understand that the regulatory requirements are not dependent on Incoterms? %%%%%%%%%% ANSWERS: If your selling to a customer outside the USA, no matter what INCO term you apply, your export responsibilities and obligations are essentially the same. The trigger for […]

  • Incoterms guidelines for sales terms and revenue recognition

    QUESTION: I would like to get the memberships input on incoterms and sales terms on PO. We use incoterms guidelines on PO and for revenue recognition. My concerns are to what extent we include incoterms in our sales and purchases and how we include them – and whether and when their inclusion results in a […]

  • Ownership for Imported goods in China under DAP

    QUESTION: Our customer in China received a FCL as DAP and already cleared customs and paid taxes/duties.  I know Incoterms don’t address title transfer/ownership but since the customer already has possession and paid customs clearance, do they own the goods?  We want to take the product back and store it in a non-bonded warehouse and […]

  • Ex Works to a foreign buyer

    QUESTION: Ex-works to a foreign buyer. We have a Canadian buyer who buys our products on an ex-works basis from our US plants.  We “know” that our product is exported to Canada. Our product is building supplies. Do we have any export compliance obligations/risks/liabilities on this type of a transaction? =========== Answers: Sounds like you […]


    .       US company to Customer in Mexico – Direct US company pays for delivery to US side of the border, customer in Mexico clears customs and pays for delivery to destination in Mexico. Is FCA (US border city) or DAP (US border city) more appropriate?  2.       US Company to customer or US company’s subsidiary in […]