The inclusion of an ‘Incoterms’ should be done at the procurement stage and agreed with the supplier. Incoterms are a set of international rules, issued by the International Chamber of Commerce, for the interpretation of the chief terms of delivery used in foreign trade contracts. Incoterms define the rights and obligations of the seller and the buyer with respect to the:
- party responsible for packing, transport, insurance, transport, handling, customs
- party that pays for the above mentioned activities
- transfer of the risk (at which point and time the risk passes from seller to buyer).