Delivery terms (Incoterms 2020)
Eleven three-letter terms decide who pays for which leg, who clears customs and when risk passes — and therefore what the invoice price does and does not include. That last part is what customs valuation is built on: an EXW price that looks cheaper than a CIF quote may cost more once every missing leg is added back.
Who does what, when risk passes
Plain-language summary of the main obligations — the authoritative rules are ICC's Incoterms® 2020 publication.
- EXWEx Works
Risk passes: At the seller's premises
Seller pays: Only packing and making goods available at their premises
Clearance exp. · imp.: Buyer · Buyer
- FCAFree Carrier
Risk passes: On handover to the buyer's nominated carrier at the agreed place
Seller pays: Delivery to the handover point and export clearance
Clearance exp. · imp.: Seller · Buyer
Risk passes: Alongside the ship at the loading port
Seller pays: Delivery alongside the ship and export clearance
Clearance exp. · imp.: Seller · Buyer
Risk passes: On board the ship at the loading port
Seller pays: Loading on board and export clearance
Clearance exp. · imp.: Seller · Buyer
Risk passes: On board at the loading port (though the seller pays freight to destination)
Seller pays: As FOB, plus sea freight to the destination port
Clearance exp. · imp.: Seller · Buyer
- CPTCarriage Paid To
Risk passes: On handover to the first carrier (though the seller pays carriage to destination)
Seller pays: As FCA, plus carriage to the agreed destination
Clearance exp. · imp.: Seller · Buyer
Risk passes: On board at the loading port
Seller pays: As CFR, plus minimum-cover insurance for the buyer
Clearance exp. · imp.: Seller · Buyer · Seller must buy minimum-cover insurance for the sea leg
- CIPCarriage and Insurance Paid To
Risk passes: On handover to the first carrier
Seller pays: As CPT, plus high-cover insurance for the buyer
Clearance exp. · imp.: Seller · Buyer · Seller must buy high-cover insurance for the whole carriage
- DAPDelivered At Place
Risk passes: At the named destination, ready for unloading
Seller pays: The whole carriage to destination (unloading and import clearance excluded)
Clearance exp. · imp.: Seller · Buyer
- DPUDelivered at Place Unloaded
Risk passes: After unloading at the named destination
Seller pays: The whole carriage plus unloading at destination
Clearance exp. · imp.: Seller · Buyer
- DDPDelivered Duty Paid
Risk passes: At the named destination, import-cleared
Seller pays: Everything: carriage, both clearances and destination taxes
Clearance exp. · imp.: Seller · Seller
From invoice price to customs value
Vietnam values imports at the price up to the FIRST import gate and exports at the price at the export gate (Circular 39/2015/TT-BTC, amended by 60/2019/TT-BTC) — so each term's price needs these adjustments. Declaring an FOB price as-is understates import duty; found in a post-clearance audit it means back-collection plus late-payment penalties.
| Term | Importing into Vietnam | Exporting from Vietnam |
|---|---|---|
| EXW | add int'l freight, add insurance try it → | add cost to the export gate try it → |
| FCA | add int'l freight, add insurance try it → | add cost to the export gate try it → |
| FAS | add int'l freight, add insurance try it → | = invoice price try it → |
| FOB | add int'l freight, add insurance try it → | = invoice price try it → |
| CFR | add insurance try it → | deduct int'l freight try it → |
| CPT | add insurance try it → | deduct int'l freight try it → |
| CIF | = invoice price try it → | deduct int'l freight, deduct insurance try it → |
| CIP | = invoice price try it → | deduct int'l freight, deduct insurance try it → |
| DAP | deduct out-of-scope costs* try it → | deduct int'l freight, deduct insurance, deduct out-of-scope costs* try it → |
| DPU | deduct out-of-scope costs* try it → | deduct int'l freight, deduct insurance, deduct out-of-scope costs* try it → |
| DDP | deduct out-of-scope costs* try it → | deduct int'l freight, deduct insurance, deduct out-of-scope costs* try it → |
* Deductible only when separately shown on documents — e.g. inland transport past the import gate; under DDP also the Vietnamese taxes included in the price (for exports: destination-country costs and taxes).
Reference summary in the site's own words — "Incoterms" is a registered trademark of the International Chamber of Commerce (ICC), and the official rules are published by ICC. Customs valuation for a specific shipment follows the customs authority's determination.