INCOTERMS EXAM QUESTIONS AND
ANSWERS
Each incoterm consists of - answer- rules (scope, modality, and syntax),
responsibilities, and transfer of ownership
A scope - answer- The type of products for which it can be used
A modality - answer- The mode of transport for which it can be used
A syntax - answer- The way it has to be stated on invoices and paperwork
Ex-Works (EXW) Rules - answer- Scope: can be used for any type of good, but in
2010 it was specified for small products that are picked up by express package
services like FedEx or DHL
Modality: EXW can be used for any mode of transportation
Syntax: EXW [address of departure that goods are made available], Incoterms 2020
Free Carrier (FCA) Rules - answer- Scope: FCA can be used for any type of goods
Modality: FCA can be used for any mode of transportation
Syntax: FCA [address of departure that goods are made available], Incoterms 2020
EXW Responsibilities - answer- Exporter responsibilities: exporter must package the
goods for the international voyage and provide the importer with documents
necessary to clear the goods for export in the exporting country and to clear customs
in the importing country.
Importer Responsibilities: the importer must do everything else
the responsibility for the good shifts when the goods are available to the importer.
FCA Premises - answer- There are 2 choices for the delivery of the goods that the
exporter and importer can agree on:
1) FCA Exporter's Premises: the exporter loads the goods at its place of business on
a truck provided by the importer
2) the exporter loads the goods on its own truck and delivers them to the carrier's
place of business, still loaded on the truck. It is the responsibility of the carrier to
unload them from the truck
FCA Responsibilities - answer- Exporter Responsibilities: the exporter must package
the goods for the international voyage, provide the importer with the documents
necessary to clear customs in the importing country, and deliver the goods on the
truck either at its own place of business or the carrier's place of business
, Importer Responsibilities: The importer must do everything else
The responsibility shifts when the goods are delivered to the carrier, loaded on the
truck.
CARRIAGE PAID TO (CPT) Rules - answer- Scope: Carriage Paid To can be used
for any type of product.
Modality: Carriage Paid To can be used for any mode of transportation.
Syntax: CPT [Address in the City of Destination where goods are delivered],
Incoterms ® 2020.
CPT Responsibilities - answer- Responsibilities of the Exporter:
The exporter must package the goods for the international voyage, provide the
importer with the documents necessary to clear Customs in the importing country, as
well as arrange and pay for pre-carriage, main carriage and on-carriage to the city of
destination.
Responsibilities of the Importer:
The importer must do everything else.
Point at which the responsibility for the good shifts from exporter to importer:
When the exporter delivers the goods to the first carrier in the exporting country
CARRIAGE AND INSURANCE PAID TO (CIP) Rules - answer- Scope: Carriage and
Insurance Paid To can be used for any type of product
Modality: Carriage and Insurance Paid To can be used for any mode of
transportation.
Syntax: CIP [Address in the City of Destination where goods are delivered],
Incoterms ® 2020
CIP Responsibilities - answer- Responsibilities of the Exporter:
The exporter must package the goods for the international voyage, provide the
importer with the documents necessary to clear Customs in the importing country, as
well as arrange and pay for pre-carriage, main carriage, on-carriage and insurance
to the city of destination.
Responsibilities of the Importer:
The importer must do everything else
Point at which the responsibility for the good shifts from exporter to importer:
When the exporter delivers the goods to the first carrier in the exporting country
Insurance under CIP - answer- Under the CIP Incoterms® rule, the exporter must
provide insurance for the goods, but it is minimum insurance (coverage C of the
Institute Cargo Clauses). The amount of insurance is always 110 percent of the
value of the goods
ANSWERS
Each incoterm consists of - answer- rules (scope, modality, and syntax),
responsibilities, and transfer of ownership
A scope - answer- The type of products for which it can be used
A modality - answer- The mode of transport for which it can be used
A syntax - answer- The way it has to be stated on invoices and paperwork
Ex-Works (EXW) Rules - answer- Scope: can be used for any type of good, but in
2010 it was specified for small products that are picked up by express package
services like FedEx or DHL
Modality: EXW can be used for any mode of transportation
Syntax: EXW [address of departure that goods are made available], Incoterms 2020
Free Carrier (FCA) Rules - answer- Scope: FCA can be used for any type of goods
Modality: FCA can be used for any mode of transportation
Syntax: FCA [address of departure that goods are made available], Incoterms 2020
EXW Responsibilities - answer- Exporter responsibilities: exporter must package the
goods for the international voyage and provide the importer with documents
necessary to clear the goods for export in the exporting country and to clear customs
in the importing country.
Importer Responsibilities: the importer must do everything else
the responsibility for the good shifts when the goods are available to the importer.
FCA Premises - answer- There are 2 choices for the delivery of the goods that the
exporter and importer can agree on:
1) FCA Exporter's Premises: the exporter loads the goods at its place of business on
a truck provided by the importer
2) the exporter loads the goods on its own truck and delivers them to the carrier's
place of business, still loaded on the truck. It is the responsibility of the carrier to
unload them from the truck
FCA Responsibilities - answer- Exporter Responsibilities: the exporter must package
the goods for the international voyage, provide the importer with the documents
necessary to clear customs in the importing country, and deliver the goods on the
truck either at its own place of business or the carrier's place of business
, Importer Responsibilities: The importer must do everything else
The responsibility shifts when the goods are delivered to the carrier, loaded on the
truck.
CARRIAGE PAID TO (CPT) Rules - answer- Scope: Carriage Paid To can be used
for any type of product.
Modality: Carriage Paid To can be used for any mode of transportation.
Syntax: CPT [Address in the City of Destination where goods are delivered],
Incoterms ® 2020.
CPT Responsibilities - answer- Responsibilities of the Exporter:
The exporter must package the goods for the international voyage, provide the
importer with the documents necessary to clear Customs in the importing country, as
well as arrange and pay for pre-carriage, main carriage and on-carriage to the city of
destination.
Responsibilities of the Importer:
The importer must do everything else.
Point at which the responsibility for the good shifts from exporter to importer:
When the exporter delivers the goods to the first carrier in the exporting country
CARRIAGE AND INSURANCE PAID TO (CIP) Rules - answer- Scope: Carriage and
Insurance Paid To can be used for any type of product
Modality: Carriage and Insurance Paid To can be used for any mode of
transportation.
Syntax: CIP [Address in the City of Destination where goods are delivered],
Incoterms ® 2020
CIP Responsibilities - answer- Responsibilities of the Exporter:
The exporter must package the goods for the international voyage, provide the
importer with the documents necessary to clear Customs in the importing country, as
well as arrange and pay for pre-carriage, main carriage, on-carriage and insurance
to the city of destination.
Responsibilities of the Importer:
The importer must do everything else
Point at which the responsibility for the good shifts from exporter to importer:
When the exporter delivers the goods to the first carrier in the exporting country
Insurance under CIP - answer- Under the CIP Incoterms® rule, the exporter must
provide insurance for the goods, but it is minimum insurance (coverage C of the
Institute Cargo Clauses). The amount of insurance is always 110 percent of the
value of the goods
