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  • WTO launches new edition of Handbook on the TRIPS Agreement November 27, 2020
    The WTO launched today (27 November) the second edition of “A Handbook on the WTO TRIPS Agreement”, which describes the historical and legal background to the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), its role in the organization and its institutional framework. The publication coincides with the 25th anniversary of the entry into […]
  • WTO to host first Trade for Peace Week November 25, 2020
    The WTO will host the first edition of the Trade for Peace Week from 30 November to 4 December 2020. Ten virtual panel sessions will explore the nexus between trade and peace, with the focus on fragile and conflict-affected countries in accession which want to use trade and economic integration to promote sustainable and inclusive […]
  • DDG Agah at ITC Joint Advisory Group: Open trade and economic inclusion key to post-COVID recovery November 25, 2020
    In remarks on 25 November to the 54th session of the Joint Advisory Group that oversees the work of the International Trade Centre (ITC), WTO Deputy Director-General Yonov Frederick Agah argued that open international trade, together with efforts to ensure the benefits from economic activity are widely shared, would be necessary to repair the social […]
  • DDG Wolff: “WTO reform is both necessary and feasible” November 24, 2020
    Speaking at the “1+6” roundtable meeting presided by Chinese Premier Li Keqiang on 24 November, Deputy Director-General Alan Wolff urged WTO members to begin serious engagement on improving the WTO, arguing there was enough common ground to reach major new agreements. He also called on China to participate actively and contribute positively to planning far-reaching […]

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.