FOB: abbreviation of Free on Board or Freight on Board, its Chinese meaning is "free on board (....) Named port of shipment) ". Using this term, the seller shall be responsible for export customs clearance, deliver the goods to the vessel designated by the Buyer at the port of loading and within the time limit specified in the contract, bear all risks before the goods cross the ship's rail at the port of loading, and promptly notify the Buyer.
The risk transfer rules in this article have been amended by InCOterms 2010, and the risk is transferred to the buyer after the goods are loaded on board at the loading port. (Modified because the risk transfer over the ship's rail as stipulated in the 2000 General Rules of Interpretation is not easy to prove whether it is over the ship's rail.)
Free on board also known as "FOB". One of the international trade terms. The Seller completes delivery when the goods pass over the ship's rail at the named loading port. This means that the buyer must bear all risks of loss or damage to the goods from that point forward. In addition, the seller must go through the formalities related to the export of the goods. This term applies only to sea or inland waterway transport. [1]
Delivery to carrier is one of the price terms of international trade. As long as the seller delivers the goods to the carrier designated by the buyer at the designated place and goes through the export customs clearance procedures, the delivery is completed. The choice of place of delivery has an impact on the obligation to load and discharge goods at that place. If the place of delivery is the place of the Seller, the delivery obligation shall be deemed to have been fulfilled when the goods are loaded onto a means of transport provided by a carrier designated by the Buyer or by another person acting on behalf of the Buyer; Otherwise, the delivery obligation shall be deemed to have been fulfilled and the Seller shall not be responsible for discharging the goods when they are on board the Seller's means of transport and have not yet been discharged to the care of the carrier or other person designated by the Buyer.
FOB -- free on board (...... Named port of shipment)
These Rules apply only to sea or inland waterway transport.
"Free on board" means that the seller delivers the goods at the named port of shipment on board the vessel designated by the buyer, or that (intermediary seller) seeks to acquire the goods so delivered. Once shipped, the buyer assumes all risks of loss or damage to the goods.
The seller is required to deliver the goods to the vessel or to obtain the goods that have been so delivered for shipment. The so-called "acquisition" here caters to even the sale, which is very common in the commodity trade.
FOB does not apply when the goods are delivered to the carrier prior to shipment. For example, goods are transported in containers and usually delivered at the destination. In these cases, the FCA rules apply.
When FOB is applicable, the seller is responsible for the customs clearance of the goods for export. However, the seller is not obliged to clear the goods for import, pay import duties or complete any import declaration procedures
A THE SELLER’ OBLIGATIONS
B THE BUYER 'OBLIGATIONS
Buyer's obligation
A1 General obligations of the seller
The Seller must provide a commercial invoice for the goods in conformity with the Contract of Sale and any other proof of conformity that may be required by the contract.
Any document referred to in Articles A1 to A10 may be regarded as an electronic document or document of equal force according to the mutual agreement or the custom of the transaction.
B1 General Obligations of the Buyer
The buyer must pay the price in accordance with the sales contract.
Any documents referred to in Clauses B1 to B10 may be regarded as electronic documents or formalities with equal force in accordance with the mutual agreement or customary transactions of the parties
A2 Permit, approval, security clearance and other procedures
Where the Treaty applies, the seller must, at his own risk and expense, obtain any export license or other official permission and complete all customs formalities necessary for the export of the goods.
B2 Permit, approval, security clearance and other procedures
If applicable, the Buyer decides, at his own risk and expense, whether to obtain any import licence or other official permission or to complete all customs formalities required for the importation of the goods and, if necessary, transit from another country.
A3 Contract of Carriage and Insurance
a) Contract of carriage
The seller has no obligation to conclude a contract of carriage for the buyer. However, the seller may conclude the contract of carriage for the Buyer on general terms if it is based on the Buyer's request or business practice and the Buyer fails to make a contrary request in time at the Buyer's risk and expense. In any of these cases, the Seller shall have the right to refuse to enter into a contract of carriage for the Buyer and shall promptly notify the Buyer if the Seller enters into a contract of carriage.
b) Insurance contract
The seller has no obligation to provide the insurance contract to the buyer. However, the seller must provide the buyer with the buyer when the buyer requests it
The information required to obtain insurance, at which time all risks and costs (if any) are borne by the buyer. (Modified: Qin Ruoxi) (The 2000 version only says that the seller has no obligation, and the 2010 version adds the explanation that the seller must provide some information to the buyer without obligation)
B3 Transport contract and insurance contract
a) Contract of carriage
The buyer, at his own expense, must enter into a contract for the carriage of the goods from the named port of shipment, unless the seller has made a contract of carriage in accordance with the provisions of A3 a).
b) Insurance contract
The buyer has no obligation to provide the insurance contract to the seller.
A4 delivery
The seller must ship the goods to the vessel designated by the buyer or, if available, to the Buyer's designated port of shipment or obtain such goods from a middleman. In both cases, the seller must deliver the goods to the port on the agreed date or period in accordance with the customary manner of the port.
If the buyer does not specify the place of shipment, the seller may select the most suitable loading point among the specified loading ports.
B4 Receipt of Goods (Receipt of goods)
The buyer must take delivery of the goods as specified in Seller A4
A5 Risk transfer
The Seller shall bear the full risk of loss of or damage to the goods until the goods have been delivered in accordance with A4; Except in the case of loss of or damage to the goods specified in B5.
B5 Risk transfer
From the time the goods are delivered in accordance with A4, the Buyer assumes the full risk of loss or damage to the goods.
If:
a) The buyer fails to notify the designation of the vessel in accordance with B7; Or,
b) the Buyer's designated vessel does not arrive on time, so that the Seller is unable to comply with A4; Or (the designated vessel) does not take over the cargo; Or (named vessel) stop loading earlier than the time notified in accordance with B7.
The Buyer shall bear the full risk of loss of or damage to the goods from the date stated below) :
1) From the date set forth in the agreement, if there is no date set forth in the Agreement,
2) from the date of the Seller's notice within the term of the Agreement as set out in A7, or, if no date of notice has been agreed,
3) from the date of expiry of any agreed period of delivery,
Provided, however, that the goods have been accurately and undoubtedly established as the goods stipulated in the contract.
A6 Cost division
The Seller must pay:
a) The Seller must pay all expenses in connection with the goods except those which are due to be paid by the Buyer as specified in B6 until the goods have been delivered in accordance with A4; and
b) When it is necessary to go through customs formalities, the customs formalities required for the export of the goods and all duties, taxes and other fees payable at the time of export.
B6 Cost division
The buyer must pay:
a) All costs associated with the goods from the time of delivery in accordance with A4, except for customs formalities required for the export of the goods and all duties, taxes and other charges referred to in subparagraph A6b) payable at the time of export; and
b) One of the following two situations will result in additional charges:
(I) Due to the Buyer's failure to give corresponding notice to the Seller in accordance with B7,
(ii) the vessel appointed by the Buyer does not arrive on time, or does not take delivery of the goods, or ceases loading earlier than the time notified in accordance with B7
Unless the goods have been duly assigned to the contract; and
When customs formalities are required, all duties, taxes and other charges payable on the importation of the goods, as well as the costs of customs formalities on the importation of the goods, and the costs of the transit of the goods from other countries.
A7 Notify the buyer
At the Buyer's risk and expense, the Seller must give the Buyer sufficient notice that the goods have been delivered in accordance with A4 or that the vessel fails to take delivery of the said goods within the agreed time.
B7 Notify the seller
The Buyer must give the Seller adequate notice of the name of the vessel, the point of shipment and, if necessary, the time of delivery chosen within the agreed period.
A8 Delivery certificate
The Seller must provide to the Buyer, at his own cost, the usual documents proving that the goods have been delivered in accordance with A4.
Unless the documents referred to in the preceding paragraph are transport documents, the seller must, at the Buyer's request and at his risk and expense, assist the Buyer in obtaining the transport documents.
B8 Evidence of delivery
The Buyer must accept the delivery document provided in accordance with A8.
A9 Inspection, packaging, marking
The Seller must pay the cost of the checks (such as checking the quality of the goods, measuring, weighing, counting) required for delivery in accordance with A4, as well as the cost of the pre-shipment inspection required by the relevant authorities of the exporting country.
The seller must, at his own expense, pack the goods unless, in accordance with relevant industry practice, the goods shipped do not need to be packaged for sale. The Seller must pack the goods in a form suitable for transport unless the Buyer has informed the Seller of specific packing requirements prior to the conclusion of the contract of sale. Packages should be properly marked.
The Seller must pack the goods at his own expense, unless the goods shipped are of a type that does not require packing according to the custom of the transaction. The Seller may pack the goods in a manner suitable for the carriage of the goods, unless the Buyer notifies the Seller of the specific packing requirements prior to the conclusion of the contract of Sale. Packages must be properly marked.
B9 Goods inspection
The buyer must pay the cost of any pre-shipment inspection, except for inspections mandated by the relevant authorities of the exporting country.
A10 Information assistance and related fees
Where applicable, at the Buyer's request and at his risk and expense, the Seller must give the Buyer all assistance in a timely manner in obtaining all documents and information necessary for the import and/or delivery of the goods to their final destination. (Contains information related to safety factors)
The Seller must pay to the Buyer all costs incurred by the Buyer in providing or assisting the Seller in obtaining the documents or information specified in B10.
B10 Information assistance and related fees
The Buyer must inform the Seller of its requirements for any safety-related information in a timely manner so that the Seller can comply with A10.
The Buyer must pay all costs and all costs incurred by the Seller in providing and giving assistance to the Buyer in obtaining documents and information as set out in A10.
Where applicable, the Buyer must, at the Seller's request and at their risk and expense, provide or give to the Buyer in a timely manner all assistance in obtaining all documents and information required by them for the transport and export of the goods and for the transit transport. (Contains information related to safety factors)
