Incoterms 2020 · group F — main carriage unpaid

FOB — Free On Board: delivery terms under Incoterms 2020

The seller delivers the goods to the port of shipment, clears export customs and loads them on the buyer's vessel. Freight, insurance and the risk at sea are the buyer's. The FOB term is already selected in the generator

What you are drafting

Import of goods Export of goods

Annex No. 1 Contract

Import of goods on FOB termsExport of goods on FOB terms DOCX

КОНТРАКТCONTRACTMoscow

1. Предмет Контракта 2. Стоимость Контракта 3. Условия поставки 4. Условия оплаты 5. Гарантии и качество 6. Ответственность сторон 7. Арбитраж

1. Subject of the Contract 2. Cost of Contract 3. Terms of the Delivery 4. Terms of the Payment 5. Guarantee and Quality 6. Liability of the Parties 7. Arbitration

ПРОДАВЕЦ / THE SELLERПОКУПАТЕЛЬ / THE BUYER

ПРИЛОЖЕНИЕ № 1 к КОНТРАКТУANNEX No. 1 to CONTRACTСПЕЦИФИКАЦИЯ · SPECIFICATION

На поставку Товаров, на общую сумму

# Описание / Description ТН ВЭД / HS CODE Ед. изм. / Unit of meas. Кол-во / Q-ty Цена / Price Сумма / Total 1 2

Прочие условия / Other terms Гарантия / Warranty Документация / Documentation Условия поставки / Delivery terms Порядок оплаты / Terms of payment Период оказания услуг / Period of provision of services Срок возврата оплаты / Period of refund of payment

ПРОДАВЕЦ / THE SELLERПОКУПАТЕЛЬ / THE BUYER

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Deal scheme

What the draft already fills

Parties, documents and specifics for every deal scheme

Import of goods on FOB terms

PartiesBuyer — Russia, seller — foreign company

Delivery termFOB + port of shipment

DocumentsInvoice, packing list, declaration, waybill

SpecificsHS code · Supplier's SWIFT details

Export of goods on FOB terms

PartiesSeller — Russia, buyer — foreign company

Delivery termFOB + port of shipment

DocumentsInvoice, packing list, declaration, waybill

SpecificsAdvance refund on cancellation · HS code in the specification

How it works

How to write FOB into the contract

The FOB term is passed into the form from this page

1. Deal type

Import or export of goods. The parties, the goods with HS codes and the prices go into the same form; the Russian party's details are filled in from its INN (tax ID).

2. FOB and port

The FOB term is already selected. Enter the port of shipment: the port where the goods are loaded on the vessel. The delivery term text in the specification will be assembled for FOB.

3. Preview and DOCX

The whole document is visible before payment: the English and Russian columns, the specification, the delivery term. After payment you get the DOCX.

Deal types

A contract on FOB terms

An Incoterms rule applies to the supply of goods — import or export

Import of goods

The supplier loads the goods on the vessel at its port — you pay freight and insurance.

FOB already selected

HS code

Supplier's SWIFT details

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Export of goods

You load the goods on the buyer's vessel at the port of shipment.

FOB already selected

Advance refund on cancellation

HS code in the specification

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Obligations

Who does what under FOB

Risk passes when the goods are on board the vessel nominated by the buyer at the port of shipment

Obligation

Seller

Buyer

Loading at the place of dispatch

Yes

—

Export customs clearance

Yes

—

Main carriage

—

Yes

Cargo insurance

—

Optional: the risk in transit is the buyer's

Unloading at the destination

—

Yes

Import clearance, duties and taxes

—

Yes

What to check

FOB in the contract: what to specify

A delivery term without an exact place and without the conditions around it does not work well

✓Code and edition: “FOB [place], Incoterms® 2020” — without the year it is unclear which rules apply

✓Exact port of shipment: the port where the goods are loaded on the vessel

✓Mode of transport: sea and inland waterway only

✓Deadline for notifying that the goods are ready for shipment

✓Transfer of title — Incoterms does not govern it; in the contract it is tied to the moment of delivery

✓Insurance: Incoterms imposes no obligation; decide for yourselves who insures

✓Payment procedure and the deadline for refunding the advance if there is no delivery

✓Documents the seller hands over: invoice, packing list, transport document

FAQ

Questions about the FOB term

Meaning, risk, costs, title

FOB stands for Free On Board. The seller is responsible for the goods until they are loaded on the buyer's vessel at the port of shipment, including export clearance; freight, insurance and the risk at sea are borne by the buyer.

Under both terms risk passes at the same point — when the goods are on board at the port of shipment. The difference is in costs: under FOB the buyer pays freight and insurance; under CIF the seller pays freight to the port of destination and insures the cargo in favour of the buyer. That is why FOB names the port of shipment and CIF the port of destination.

FOB is a term for sea and river transport. The Incoterms 2020 rules state in the explanatory notes that it is not appropriate where the goods are handed over to the carrier before loading on board — like a container left at a terminal. FCA is intended for this case.

Incoterms does not govern the transfer of title — the rules deal only with delivery, risk and costs. The moment title passes is set by the contract or the applicable law; under Russian law (Article 223 of the Russian Civil Code) title arises from the moment the thing is handed over, unless the contract provides otherwise. In our contract title passes together with risk — at the moment of delivery under FOB.

The term code, the exact port of shipment and the edition of the rules, for example: FOB Shanghai, Incoterms® 2020. Under Article 1211(6) of the Russian Civil Code, if the contract uses a trade term accepted in international commerce, the parties are deemed to have agreed on the customs that the term denotes — so it is better to name the edition explicitly.

A contract on FOB terms — 2 990 ₽

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✓ DOCX · Word / LibreOffice

✓ Bilingual EN/RU

✓ 173-FZ · CISG · Incoterms 2020

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FOB Incoterms 2020 — delivery terms

FOB in simple terms

FOB is a sea term: the seller is responsible for the goods until they are on board the vessel at its port, while the buyer charters the vessel and insures the cargo itself. The place in the contract is the port of shipment.

How FOB is written in our contract

The delivery term is set out in Annex No. 1 (Specification) in English and Russian. The English column for this term:
FOB [place]
Delivery and transfer of risk: The Seller has fulfilled its delivery obligation when it places the Goods on board the vessel nominated by the Buyer at the named port of shipment ([place]). The risk of loss of or damage to the Goods and the title to the Goods pass from the Seller to the Buyer at that moment. This rule is to be used only for sea and inland waterway transport.
Costs: The Seller bears the costs until the Goods are on board, including export formalities. The Buyer bears freight, insurance, unloading and all subsequent costs.
Customs clearance: export clearance is the Seller's obligation; import clearance, duties and taxes are the Buyer's.

FOB and customs value on import

When goods are imported into Russia under FOB, the carriage to the border is paid by the buyer, and these costs are not included in the price of the goods. Under Article 40 of the EAEU Customs Code, the costs of carriage to the place of arrival in the customs territory of the EAEU, as well as loading, unloading, transshipment and insurance in connection with that carriage, are added to the price when the customs value is calculated. So the carrier's and insurer's invoices up to the border will be needed for the declaration.

All terms: Incoterms 2020 · EXW · FCA · FAS · CPT · CIP · CFR · CIF · DAP · DPU · DDP. See also: import contract, export contract.