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  • WTO issues 2020 Annual Report May 28, 2020
    The WTO’s Annual Report, published today (28 May), provides a comprehensive account of the organization’s activities in 2019 and early 2020. The Report opens with a message from Director-General Roberto Azevêdo and a brief overview of the year. This is followed by in-depth accounts of the WTO’s main areas of activity over the past 12 […]
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  • 2020 WTO Public Forum cancelled May 28, 2020
    After careful consideration of COVID-19 related uncertainties and health concerns, the WTO has decided to cancel this year’s WTO Public Forum, scheduled for 29 September to 2 October. This decision responds to the complexities around planning to host thousands of people from around the world for a public event under the WTO roof, as well […]
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  • DDG Wolff: This is the time to consider the future of the multilateral trading system May 27, 2020
    The outbreak of the COVID-19 pandemic has heightened the urgent need to examine the underlying principles and values of the WTO and whether the organization needs change, Deputy Director-General Alan Wolff said on 27 May. Speaking at a webinar hosted by the Korean International Trade Association, DDG Wolff called for immediate action to control the […]
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  • Members discuss impact of COVID-19 on developing economies’ participation in world trade May 26, 2020
    On 26 May, WTO members assessed the impact of the COVID-19 pandemic on the trading capacity of developing countries in a virtual meeting of the Committee on Trade and Development. The new chair, Afghanistan’s WTO Ambassador, Mohammad Qurban Haqjo, said: “Trade must form part of the solution in assisting and supporting recovery in developing countries.”
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Free on Board FOB



 

Maritime and Inland Waterway transport only

With  the Free on Board (FOB) Incoterms, Seller’s responsibility is engaged until goods are on board of the vessel in the specified port of shipment.

The seller must bear the pre-carriage costs and Terminal-handling costs (depending on the liner terms) of the shipping company.

In addition, the Seller is liable for export custom clearance formalities (might include export licence for instance).

In much the same way, the Buyer is liable for import customs clearance formalities (import licence, taxes and duties, VAT)

However any pre-shipment inspection required by law in the seller’s country, is at the seller’s expense.

Eventually, the buyer will be liable for main and post carriage transport costs as well as for terminal-handling charges (depending on the liner terms of the shipping company).

Usual Documents required:

  • Commercial Invoice
  • Documents as agreed in the contract
  • Proof of delivery (forwarder’s certificate of receipt)
  • Clean Bill of lading with the mention “Freight Payable at” (at named place) or “freight Collect” (at port of destination)

Upon request, the Seller may assist the Buyer for obtaining any documents needed for arranging the transport and the import clearance.

Note that the related costs engendered by such assistance are at the expense of the buyer.

When should I use the Free on Board (FOB) Incoterms rule?

Basically the Free on Board (FOB) Incoterms is recommended when the seller trades produces and raw materials (such as commodities for instance) and where he has an easy access to bulk cargo (dry or liquid).

However, for containerised goods usually handed over to the carrier before the loading aboard the vessel or at a Terminal, FOB is not fit for purpose and FCA should be considered instead.