Incoterms in Brazil

International Trade Agreements

Incoterms, or International Commercial Terms, relate to standardized agreements defining the rights and duties governing the relationship between an importer (buyer) and an exporter (seller) during an international exchange. Defined responsibilities are related to the loading, the transport, the type of transport, the insurances and the delivery. Moreover, these three-letters abbreviations determine the place and the moment of the risk transfer between the buyer and the seller.

In the international business system, 11 different incoterms exist, beginning with the letters C, D, E, F. However, we will not take into account the three incoterms beginning with the letter D, such as they imply, in the Brazilian case, that the exporter pays the nationalization taxes, and that is forbidden in the Brazilian legal system. Indeed, only a Brazilian company or a Brazilian subsidiary is able to pay the Brazilian taxes.

Incoterms in Brazil

Most Used Incoterms in Brazil

EXW Incoterm (EX Works)

The buyer is in charge of exportation modalities. The risk and costs transfer occurs when the seller makes the goods available to the buyer in the seller’s factory at the place and deadlines agreed.

FCA Incoterm (Free Carrier)

The seller is in charge of export customs clearance modalities and costs. He can organize himself the pre-carriage until the port agreed, according to the agreements defined with the buyer, but he is not forced to do it. The risk and costs transfer occurs at the delivery in the port agreed.

FAS Incoterm (Free Alongside Ship)

The seller is in charge of export customs clearance modalities and costs. He also has to organize himself the pre-carriage until the port agreed and the handling such as the goods should be ready to be loaded. The risk and costs transfer occurs at this time.

 

FOB Incoterm  (Free On Board)

The seller is in charge of export customs clearance modalities and costs. He also has to organize himself the pre-carriage until the port agreed and the handling such as the goods should be loaded “on board”. The risk and costs transfer occurs at this time.

Brazilian Incoterms International Commercial Terms

CFR Incoterm (Cost Insurance and Freight)

The seller is in charge of the customs clearance modalities, and has to organize and pay the transport until the port agreed. The risk and costs transfer occurs when the seller makes available the goods to the buyer, loaded “on board”, in the deadlines agreed. The buyer has to contract insurance, the seller not.

CIF Incoterm (Cost and Freight)

The seller is in charge of the customs clearance modalities, and has to organize and pay the transport until the port agreed. The risk and costs transfer occurs when the seller makes available the goods to the buyer, loaded “on board”, in the deadlines agreed. The seller has to contract insurance for the international transport.

CPT Incoterm (Carriage Paid To)

The seller is in charge of the customs clearance modalities, and has to organize and pay the shipping transport until the port agreed. The risk and costs transfer occurs when the seller delivers the goods to the first carrier in the deadlines agreed. The buyer has to contract insurance for the international transport.

CIP Incoterm (Carriage and Insurance Paid To)

The seller is in charge of the customs clearance modalities, and has to organize and pay the shipping transport until the port agreed. The risk and costs transfer occurs when the seller delivers the goods to the first carrier in the deadlines agreed. The seller has to contract insurance for the international transport.

Share: