Incoterms - International Commercial Terms

The Incoterms rules began development in 1921 with the forming of the idea by the International Chamber of Commerce (ICC).

The Incoterms rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. First published in 1936, Incoterms rules provide internationally accepted definitions and rules of interpretation for most common commercial terms.

Group E - Departure
EXW = EX WORKS (named place)

Group F - Main Carriage Unpaid
FCA = FREE CARRIER (named place)
FAS = FREE ALONGSIDE SHIP (named port of shipment)
FOB = FREE ON BOARD (named port of shipment)

Group C - Main Carriage Paid
CFR = COST AND FREIGHT (named port of destination)
CIF = COST, INSURANCE AND FREIGHT (named port of destination)
CPT = CARRIAGE PAID TO (named place of destination)
CIP = CARRIAGE AND INSURANCE PAID TO (named place of destination)

Group D - Arrival
DES = DELIVERED EX SHIP (named port of destination)
DEQ = DELIVERED EX QUAY (named port of destination)
DDU = DELIVERED DUTY UNPAID (named place of destination)
DDP = DELIVERED DUTY PAID (named place of destination)

FCA Kota Kinabalu Incoterms 2000


When contract disputes arise in international trade, there is always the question of which country's laws to apply. To resolve this issue, a number of countries, including the United States, have ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS).

However, many nations, including United Kingdom and Japan, have not ratified the CIGS. When firms do not wish to accept the CIGS, they often opt for arbitration by a recognized arbitration court to settle contract disputes. The most well known of these courts is the International Court of Arbitration of the International Chamber of Commerce (ICC).

International Shipping

The International Maritime Organization (IMO) is a specialized agency of the United Nations which is responsible for measures to improve the safety and security of international shipping and to prevent marine pollution from ships. It is also involved in legal matters, including liability and compensation issues and the facilitation of international maritime traffic. It was established by means of a Convention adopted under the auspices of the United Nations in Geneva on 17 March 1948 and met for the first time in January 1959. It meets normally once every two years.

Legal instruments:
      SOLAS = Safety of Life at Sea
      MARPOL = marine pollution
      STCW = Standards of Training, Certification and Watchkeeping
      COLREG = collision regulation
      PSC = Port State Control

What is the ISPS Code?
The International Ship and Port Facility Security Code (ISPS Code) is a comprehensive set of measures to enhance the security of ships and port facilities, developed in response to the perceived threats to ships and port facilities in the wake of the 9/11 attacks in the United States. The ISPS Code is implemented through chapter XI-2 Special measures to enhance maritime security in the International Convention for the Safety of Life at Sea (SOLAS). The Code has two parts, one mandatory and one recommendatory.

Who has to comply with the ISPS Code?
The ISPS Code is part of SOLAS so compliance is mandatory for the 148 Contracting Parties to SOLAS.

Are all IMO Member States obliged to comply with the ISPS Code?
No. Only States who are Contracting Governments to SOLAS have a legal obligation to comply with the requirements of the ISPS Code and to submit information to IMO

International Law

Strictly speaking, there is no such thing as international law. The laws between different nations is generally governed by treaties, which may, in turn, be bilateral or multilateral. International law is consent-based governance. This means that a state member of the international community is not obliged to abide by international law unless it has expressly consented to a particular course of conduct. This is an issue of state sovereignty.

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