The FCA Incoterm is a multimodal Incoterm. It is part of the “F” family of Incoterms, a group distinguished by the limitation of the exporter’s obligations to the receipt of the goods by the carrier. This group is often chosen by sellers because it greatly limits the risk they will bear in international transactions.
What is the Free Carrier Incoterm?
The FCA Incoterm limits the seller’s obligations to the delivery of the goods to the carrier chosen by the buyer. Once the export taxes have been paid by the seller and the legal obligations have been fulfilled, the risk is transferred to the buyer. The FCA Incoterm offers two delivery options to the buyer:
- The carrier chosen by the buyer can pick up the goods at the seller’s warehouse. The costs will have to be paid by the buyer.
- The seller can pre-route the goods to a point of departure chosen by the buyer.
In both cases, the buyer has to pay the transportation costs. The seller’s only obligations are to clear the goods through customs and to provide the necessary documents for export.
The obligations of the seller and the buyer with the Incoterm FOB ?
When the FCA Incoterm is chosen for an international commercial transaction, the major part of the transport costs is taken by the buyer. The costs and risks are therefore borne mostly by the buyer.
The seller’s obligations:
- Prepare the goods (pack and label) in order to load them into the means of transport chosen by the buyer.
- To fill and complete the procedure of customs clearance in the country of export and to pay the taxes and rights so that the goods leave the country of origin.
The buyer’s obligations:
- He is responsible for organizing and supporting the transportation of the goods from the point of shipment to the final destination.
- He has to fill and complete the procedure of customs clearance at the importation of the goods. He will have to pay the duties and taxes so that the goods can arrive at their destination.
The Free Carrier Incoterm greatly favors the seller because it clearly limits his obligations contrary to those of the buyer. This Incoterm remains rather flexible, it is thus important to pay attention to certain points and to take precautions:
- Negotiate the costs of passage in the warehouse.
- Define the packaging and labeling procedures of the goods.
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