Understanding International Trade: Certificate of Origin and Incoterms

What is the Certificate of Origin?

It certifies the product origin on their raw material. It's useful to obtain international trade agreement benefits in the country of destination.

Purpose of the Economic Inconvenience Clause

Summarizes the operation of export or import, specifying the costs incurred and the time it takes to occur.

Why Aren't 100% Risky Events Insured?

There isn't 100% risky events insured because an insurer doesn't want to pay for an insurance knowing that the risk is very high. The buyer of the cargo is responsible for buying or transporting the merchandise taking into account the risks not covered by the insurer.

Three Important Functions Covered by the Incoterms

Determine the moment of risk transference between seller and buyer, responsibilities, expenses like taxes, insurance, obligations in an international sale and purchase contract, delivery conditions, costs distribution, and document making.

Incoterm with Least Level of Services

Exworks has the least level of services offered by the seller to the buyer because the buyer has the maximum responsibility. The seller only facilitates the document and specifies the day when the cargo would be available.

Incoterm with the Highest Level of Services

Delivered Duty Paid offers the highest level of services as the delivery is performed at the destination country, on top of the mean of transport.

Main Points to Structure the Export Price

Basic criteria, shipment characteristics, total cost of operation, total transit time. COST AND TIME.

Criteria for Fixing an Export Price

Cost marketing or competitors.