The terms of trade when exporting and importing products from Japan | Incoterms 2020
When we sell goods to our customers, the terms of trade dictate the shipping costs, insurance premiums, and the amount of risk borne by both parties during transportation. This article explains the currently stipulated terms of trade. Please refer to this article when purchasing goods from us.

1. Incoterms of Trade

Incoterms (Incoterms/International Commercial Terms) are international rules established by the International Chamber of Commerce (ICC) that stipulate the terms and conditions of trade, including the burden and scope of costs in trade transactions.
Incoterms 2020 consists of a total of 11 rules.
In the following section, we will introduce four types of terms and conditions that we often use in trade. 

2. Types of Incoterms

EXW (Ex-Works)

The seller completes the cargo delivery obligation at his/her own facilities or other destination place. All subsequent costs and risks are borne by the buyer. Export customs clearance is also arranged by the buyer. 

FOB (Free on Board)

The seller's delivery obligation is completed when the cargo is reached at the buyer's detnation port, and all subsequent costs and risks are borne by the buyer. Export customs clearance is to be arranged by the seller.

CIF (Cost, Insurance and Freight)

 CIF is an international shipping agreement used when freight is shipped via sea or waterway. Under CIF, the seller is responsible for covering the costs, insurance, and freight of the buyer's shipment while in transit. The buyer is responsible for any costs once the freight has reached the buyer's destination port.

DAP (Delivery at Place)

DAP is an international trade term used to describe a deal in which a seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location. 
Under DAP, the buyer is responsible for paying import duties and any applicable taxes, including clearance and local taxes, once the shipment has arrived at shipping destination. 
We discuss these terms of trade with our customers at the time of quotation and negotiation to establish shipping charges and burden of risk. If you wish to purchase goods from us, an understanding of the above terms of trade will facilitate smooth negotiations.