Incoterms 2020 for first-time exporters: who pays what, and when the risk changes hands

Every international sale needs an answer to two questions: who organises and pays for each leg of the transport, and at which point the risk of loss passes from seller to buyer. The Incoterms published by the International Chamber of Commerce are the standard shorthand for that answer. Fujisan writes the chosen Incoterm on every quotation and every order.

The four terms we use most

• EXW, Ex Works. The maker places the goods at its own premises; the buyer handles everything from there, including export clearance in Japan. Simple for the maker, but it leaves Japanese export formalities to a foreign party. We rarely recommend it.
• FCA, Free Carrier. The maker delivers the goods, export-cleared, to the carrier nominated by the buyer, typically at the maker's premises or at a Japanese port or airport. Risk passes at that moment. This is our preferred term for most partners: the maker stays in control of Japanese export formalities, and Fujisan controls the international transport.
• DAP, Delivered at Place. The seller organises transport all the way to the named place in Europe; the buyer handles import clearance and duties. Used when a maker already has a forwarder and prefers to quote delivered prices.
• DDP, Delivered Duty Paid. The seller does everything, including import duties and VAT in the destination country. Rarely suitable for a Japanese maker without a European entity.

Practical consequences

The Incoterm determines who buys the transport insurance, who files which customs declaration, and which documents the maker must provide. Under FCA, for example, the maker issues the commercial invoice and packing list and obtains the certificate of origin; Fujisan's forwarder issues the transport document.

A simple rule

Choose the term that keeps each party responsible for the formalities in its own country. For Japan to Switzerland, that is usually FCA on the maker's side, with Fujisan as importer of record on the Swiss side.

This guide is general information prepared by Fujisan Sagl and is not legal advice. Regulations change; we verify the applicable requirements for each product before import.