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The Free Carrier (FCA) Incoterm defines the seller’s responsibilities in the sale and shipment of goods. The seller must deliver goods to the named place and arrange for their transport to the buyer. The seller is responsible for the costs of and risk of loss or damage to the goods until that point, at which time the responsibility passes to the buyer.
The FCA Incoterm is one of a series of international trade definitions managed by the International Chamber of Commerce (ICC). The ICC introduced FCA in its 2010 version and updated the definition in 2020. The ICC is responsible for issuing Incoterms guidance, which sets the international standards for trade. The ICC also has the role of ensuring the Incoterms remain reliable and up-to-date.
Using FCA allows buyers and sellers to agree on which party will bear shipping, insurance, and other transport costs. When using FCA, it is important to agree on the scope and timing of these costs. Specifically, sellers must agree who will meet the cost of transport, loading and unloading, as well as customs formalities.
Depending on the trade agreement, the seller might also be obligated to meet the cost of any necessary inspections and/or establish a secure payment process. For instance, FCA may require the seller to use secure payment methods such as irrevocable letters of credit or intermediation from a third party.
FCA ensures that the seller is liable for loss or damage only until goods reach the designated point for delivery, such as the airport or shipping terminal. After this point, the buyer assumes responsibility for the goods and must accept and pay for them regardless of their condition.
Overall, FCA is an important trade term as it sets out the respective liabilities and responsibilities of both the buyer and seller. It also helps to establish a secure and reliable system for the shipment of goods between countries. FCA is a moveable Incoterm, meaning it can be used anywhere in the world, which has made it especially useful during the COVID-19 pandemic when traditional systems of trade have been compromised.
The FCA Incoterm is one of a series of international trade definitions managed by the International Chamber of Commerce (ICC). The ICC introduced FCA in its 2010 version and updated the definition in 2020. The ICC is responsible for issuing Incoterms guidance, which sets the international standards for trade. The ICC also has the role of ensuring the Incoterms remain reliable and up-to-date.
Using FCA allows buyers and sellers to agree on which party will bear shipping, insurance, and other transport costs. When using FCA, it is important to agree on the scope and timing of these costs. Specifically, sellers must agree who will meet the cost of transport, loading and unloading, as well as customs formalities.
Depending on the trade agreement, the seller might also be obligated to meet the cost of any necessary inspections and/or establish a secure payment process. For instance, FCA may require the seller to use secure payment methods such as irrevocable letters of credit or intermediation from a third party.
FCA ensures that the seller is liable for loss or damage only until goods reach the designated point for delivery, such as the airport or shipping terminal. After this point, the buyer assumes responsibility for the goods and must accept and pay for them regardless of their condition.
Overall, FCA is an important trade term as it sets out the respective liabilities and responsibilities of both the buyer and seller. It also helps to establish a secure and reliable system for the shipment of goods between countries. FCA is a moveable Incoterm, meaning it can be used anywhere in the world, which has made it especially useful during the COVID-19 pandemic when traditional systems of trade have been compromised.