Import Finance

2. Terms of Delivery

2.1 The terms of delivery specify how responsibility and costs are shared between you and your supplier. They should cover:

• Who is responsible for packaging and labelling the goods.
• Who is responsible for arranging and paying for each stage of the delivery.
• Who is responsible for insuring the goods over each stage of the delivery.
• When ownership of the goods passes from the supplier to you.

2.2 There is a range of internationally recognised standard terms known as INCOTERMS. The terms used will depend on how the goods are to be transported and what you negotiate with the supplier. They include:

• Ex-works - where you arrange to collect goods from the supplier's premises, taking immediate ownership and responsibility.
• Delivered duty paid - where your supplier is responsible for delivery to your premises and pays any import duties and taxes.
• Several other terms are used where responsibility and costs are shared in specified ways.For example, cost, insurance and freight (CIF), where the supplier pays for the delivery of goods to your port of destination. The risk of loss or damage to the goods passes to you, but the supplier must take out a minimum level of insurance cover against it.

2.3 Taking more control over the delivery process may cut your overall costs and risks.

• It is difficult to be sure that the exporter is handling things in the way you would like while delivery remains the exporter's responsibility.