Incoterms 2020

1. What are the purpose and scope of incoterms 2020?

The purpose of Incoterms is to provide a set of international rules for the interpretation of the
most commonly used trade terms in foreign trade. The scope of Incoterms is limited to matters
relating to the rights and obligations of the parties to the contract of sale with respect to the
delivery of goods sold.

2. What are some comon misconceptions about Incoterms? When choosing a rule in
Incoterms 2020, which issues should be considered by contracting parties?
- Using FOB for containerized cargo
- Not specifying the location
- Sellers committing to DDP or DAP without checking if he/she can handle import responsibilities
in the buyer’s country
- Buyers using EXW without considering his/her implications in export procedures
- Using CIP or CIF without checking whether insurance coverage is sufficient and matches the
requirements of the commercial contract
- Not aligning Incoterm with bank’s security requirements for payment To avoid uncertainty and disputes,
trading companies should ensure they know the new Incoterms rules and make any amendments to their
contracts and
general terms and conditions that are necessary. It is important to ensure that
the most appropriate Incoterms are selected for each contract and that they are fully understood before they
are incorporated. Parties dealing with such contracts will need to:

• Check their standard contract forms

• Consider the changes introduced by Incoterms 2020 and whether they wish their contracts to incorporate
Incoterms 2020 or an earlier version of Incoterms (or none)

• Make any necessary consequential changes in the standard forms for new contracts (for example,
changing ‘DAT’ (Delivered at Terminal) to ‘DPU’ (Delivered at Place Unloaded)

Inform counterparties and trading/execution departments of the changes to Incoterms and any revisions to contract
documentation
3. Point out the similarities and differences in seller’s and buyer’s obligations in CIF and
CIP rules under Incoterms 2020. (In terms of means of transportation, risk transfer,
contracting for carriage, main carriage, loading and unloading costs)
CIF CIP
Seller Buyer Seller Buyer
Means of Sea or inland All modes of
transportation waterway transport transport
Risk transfer The seller's risk passes to The risk is transferred
the buyer when the goods when the seller
have been placed on board delivers the goods to
the vessel at the port of the carrier.
export.

Contracting for The seller contracts for the The seller contracts
carriage carriage (charter) and pays
for transportation
the shipping costs.
(hire means of
transport) and pays
the shipping costs.

Main carriage Waterway Waterways, airways,

roadways,
railways, pipeline
transport.

Loading cost The seller completes the For any form of

loading of the goods on transport, the seller
board the vessel at the port must complete the
of departure and unloading of the
completes the export goods from the
clearance procedures (if domestic means of
any). transport and the
loading of the goods
onto the primary
means of transport as
well as clearing the
goods for export (if
any).
Unloading costs Buyer is The buyer is
responsible for responsible for
unloading the unloading the
goods upon goods from
arrival at the the primary
port of import means of
and is transport as
responsible for well as
customs clearing the
clearance (if customs for
any). import.
4. Point out the similarities and differences in seller’s and buyer’s obligations in FOB and
FCA rules under Incoterms 2020. (In terms of means of transportation, risk transfer,
contracting for carriage, main carriage, loading and unloading costs)
FOB FCA
Seller Buyer Seller Buyer
Means of Sea or inland
transportatio n waterway
transport
Risk transfer The seller's risk The seller's risk passes
passes to the buyer to the buyer when
when the goods have goods have been
been loaded on the stuffed on the transport
buyer's vessel at arranged
the port of export. by the buyer.

Contracting for The buyer The buyer contracts

carriage contracts for the for transportation
carriage (charter) (hire means of
and pays the transport) and
shipping costs. pays the shipping
costs.

Main Waterway Waterways, airways,

carriage roadways, railways,
pipeline
transport.

Loading cost The seller completes Bear the costs of

the loading of the stuffing the goods on
goods on board the the buyer's nominated
vessel at the port of domestic means of
departure and transport in the
completes the export country of export.
clearance procedures Customs clearance for
(if any). export goods. Pay
export tax (If any)

Unloading Buyer is bear the cost of

costs responsible for unloading the goods
unloading the from the
goods upon domestic means
 arrival at the of transport at
port of import the buyer's
and is warehouse.
responsible for Customs
customs clearance of
clearance (if imported goods.
any). Pay import tax
(if any).
5. Point out the similarities and differences in seller’s and buyer’s obligations in DPU and
DDP rules under Incoterms 2020. (In terms of means of transportation, risk transfer,
contracting for carriage, main carriage, loading and unloading costs)

SIMILARITIES
DPU DDP

Transportation Any modes of transport Any modes of transport

Risk transfer Risk transfers from seller to buyer Risk transfers from seller to buyer
when the goods have been when the goods are made available
unloaded. to the buyer, ready for unloading
from the arriving means of
transport

Contracting for carriage The seller must contract or arrange at The seller must contract or
its own cost for the carriage of the arrange at its own cost for the
goods to the named place of carriage of the goods to the named
destination or to the agreed point. place of destination or to the
agreed point, if any, at the named
place of destination.

Loading and unloading costs The seller pays for unloading. The The buyer is only responsible
buyer is responsible for all charges for the cost to unload their
after unloading, except (in theory) any cargo.
charges caused by delay, including The seller must pay for all other
demurrage charges at the shipping expenses, duties, and
terminal, which is generally the taxes.
seller's responsibility.

DIFFERENCES
Delivered at Place Unloaded (Named Place of Destination)

- Under DPU, the seller bears all responsibilities—including arranging and transporting the goods—up until the
goods are unloaded from the arriving means of transport at the named place of destination.
- The buyer bears all risks and costs from that point on to the final destination
- With the DPU term, an exporter takes the responsibility of unloading.
- The buyer is responsible for import customs
 - DPU is the only Incoterms law that requires the seller to unload products at the destination location.

DDP: Delivered Duty Paid (Named Place of Destination)

- Under DPU, the seller bears all responsibilities—including arranging and transporting the goods—up until the
goods are unloaded from the arriving means of transport at the named place of destination.
- With DDP, a seller is responsible for customs and taxes.
- The buyer bears all risks and costs from that point on to the final destination
- Under DDP, the seller is not accountable for unload goods
6. Point out the similarities and differences in seller’s and buyer’s obligations in CIP and
FCA rules under Incoterms 2020. (In terms of means of transportation, risk transfer,
contracting for carriage, main carriage, loading and unloading costs)

DIFFERENCES

CIF FCA
Seller Buyer Seller Buyer

1. Transportation Sea and inland Modes of

waterway transport
transport

2. Risk transfer The seller's risk The buyer The seller bears all
passes to the buyer assumes the risks of loss of or
when the seller risk after the damage to the goods
completes the goods have until they have been
delivery of the been delivered in
goods on board the delivered to accordance with A2,
vessel because the the ship's except in cases of
seller books the deck. loss or damage
vessel at the port of mentioned in B3.
the seller's country
as specified in the
contract.

3. Contracting for The seller will The buyer is The seller is not Sign and pay all
carriage carry out an not obliged to enter into costs for the
insurance contract responsible and pay for the contract with the
for the shipments, for entering contract of carriage. carrier. If the
and at the same into any However, if contract contains
time is responsible principal requested by the a clause "the
for paying the contracts of buyer, the seller seller enters into a
costs of carriage nor is must provide all contract of
transporting the it required to documents or carriage", the
shipments to the contract for information buyer does not
insurance necessary for need to do
the buyer to contract so
for
 designated for such carriage with the
destination. shipment. carrier.
The seller must
enter into a
contract of carriage
with the carrier if
so agreed in the
contract

4. Loading cost Such loading The seller bears the

costs shall be costs and risks of
borne by the loading the goods
seller. onto the means of
transport at the
seller's premises.

5. Unloading cost The cost of The buyer bears

unloading the costs and risks
goods from of unloading the
the main goods from the
means of vehicle at the
transport to buyer's premises.
the buyer's
port will be
borne by the
buyer.

SIMILARITIES
There is a similarity between these two conditions that is very important , which is the time when the risk of goods is
transferred from the buyer. According to Incoterms, the time when the risk of goods is transferred from the seller to the
buyer of these two types of conditions (CIF - FCA) is when the goods pass the ship's rail (CIF) or the goods have been
deliveredfor carrier s (CIF, FCA).

7.
8. What are the 07 key changes in Incoterms 2020 in comparison with Incoterms 2010
1) DAT Incoterm changed to DPU
2) Insurance points are clarified in CIF and CIP Incoterms rules
3) Costs ans cost structures are now clarified
4) Security in relation to transport is now clearly detailed
5) Provisions to allow for own transport rather than assuming 3rd party transport
6) FCA, FOB and bills of lading
7) Presentation and design are much more user friendly

Shipping documents
9. What is a commercial invoice? Subject to UCP 600, what provisions are required for a
commercial invoice? (P.96)
Commercial invoice is a document that gives details and value of the goods to be sold. It is made out by the seller. There
is no fixed or compulsory form of the invoice. Each company has its own form.

Subject to UCP 600, what provisions are required for a commercial invoice?

a. A commercial invoice:

• Must appear to have been issued by the beneficiary

• Must be made out in the name of the applicant

• Must be made out in the same currency as the credit; and need not be signed.

b. A bank may accept a commercial invoice issued for an amount in excess of the amount allowed for the credit and its
decision will be binding on all parties, provided that the bank in question has not acted. present or negotiate for an amount
in excess of the credit limit.

c. The description of the goods, services or performance in a commercial invoice must correspond with that appearing in
the credit.

10. What is a certificate of origin (C/O)? What is the significance of C/O? (104)

- What is a certificate of origin (C/O) : In international trade transactions, a Certificate of Origin, or CO, is a document
issued by the exporter and is the authentication that a product was manufactured in a certain country.

A CO is required by many treaty agreements for cross-border trade and can help determine if your goods are eligible for
import and to what extent they are subject to duties.

A CO can exist either in paper or digital format, and must be approved by the requisite chamber of commerce or customs
authority.

11. What is a bill of lading ? what are the fuctions of bill of lading? (SGK/111)
Bill of lading is a transport document issued to the shipper by the carrier or his representative after the goods have been
shipped on board or received for shipment.

Function of bill of lading: It is proof that the contract of carriage has been signed and specifies the content of that
contract.
12. What is " Received for shipment bill of lading" ? What is "clean and claused bill of
lading"?
 To Order Bill of Lading is a Document of Title used in logistics that is Negotiable, therefore the owner of the
shipped cargo is Transferrable. It is prepared as an Original Copy that is often used with a Letter of Credit to
facilitate a safe transfer of both the cargo and money between the buyer and the seller.
 A clean bill of lading is a type of ocean bill of lading. It is a transport document that indicates that the goods
received in the vessel are in good condition and free from any defect. The carrier examines the goods thoroughly
and checks packaging quality, the quantity of goods, and other deviations in quality before issuing a clean bill of
lading. The buyers or importers often do not accept the goods with clause/dirty/unclean bill of lading.
 A Claused Bill of Lading is issued whenever the carrier deems that the cargo received for transportation that is not
in an apparent good condition and in order. An additional remark is written onto the Bill of Lading to represent
the actual apparent condition of the cargo, which is why a Claused Bill of Lading is also referred to as a “Dirty
Bill of Lading” or “Unclean Bill of Lading”.

13. What is an Airway Bill? What is the importance of an Airwway bill

Air waybill is a document issued by a carrier to confirm receipt of a shipment for carriage by air. This term in English is
Air Waybill, often abbreviated as AWB.

The important document evidences the contract between the shipper and carrier(s) for carriage of goods over routes of the
carrier(s). The AWB combines several purposes: Documentary evidence of the conclusion of the Contract of Carriage.
Proof of receipt of the goods for shipment.
 International Payment
14. What is a Bill of Exchange? What are the features of bill of exchange?
A bill of exchange is often used to protect the transaction. It is a binding agreement between buyer and seller where the
buyer agrees to pay a fixed sum of cash at a predetermined date or upon demand from the seller.

Bills of exchange are commonly used in import and export payments and are often associated with international payment
forms such as collection entrustment, name all relevant parties, outline the time when the money is due, ...
15. What is payment by open account? What are the risks for the exporter if he accepts
payment by open account?
Open account is an arrangement in which the seller will ship the goods to the buyer and payment will be made after
certain periods of time or when a credit limit is reached.

 What are the risks for the exporter if he accepts payment by open account?

-Non- Payment Risk

-Non Payment of order even after goods delivered to the importer

-Goods are not accepted by the importer

-Short- payment risk

-Late Payment Risk

16. Point out the similarities and differences between payment by clean collection and
documentary collection?

SIMILARITIES
Both are methods in which the exporter, after delivering goods or providing services, entrusts his serving bank to present a
set of documents for the goods through the collection bank to the buyer, accompanied by Provided that the importer pays
or accepts a time draft, the bank will hand over the goods documents for the importer to pick up the goods.

Legal basis: according to the Uniform Rules for Collection (URC 522) of the International Chamber of Commerce.

DIFFERENCES
Clean collection Documentary collection
Range Used sparingly, almost all parties have Used a lot
a close and trusting relationship;
insider transactions; pay for the
services the seller provides to the
buyer.

Implementation methods The seller sends the goods to the buyer The seller sends the goods to the buyer
(including documents) (but without documents, the buyer is
not the owner)
The seller then issues a bill of
exchange for the buyer and asks the The seller draws the bill of exchange
bank to collect for him the amount for the buyer, gives the bank the bill of
stated on the bill of exchange exchange and the set of documents for
the bank to claim the buyer.
The bank asks the buyer for money
and then sends it back to the seller The bank sends the buyer of the bill of
exchange

If the buyer pays or accepts the bill of

exchange, the Bank will deliver the
goods documents to the buyer to pick
up the goods. If the buyer refuses to
 pay, the buyer cannot own the
documents and be the owner of the
goods

When receiving the money, the bank

will send it back to the seller

Condition There are no conditions on the goods The goods are only owned by the buyer
when he agrees to pay and the bank
delivers the documents.

Degree of risk Just a bill of exchange, so the risk is Because it is a bill of exchange with
high, the ability to collect money is documents, it ensures the ability to
low collect money, the risk is low

17. What is payment by DP? What is payment by DA?

 Payment by DP
Under D/P or Documents Against Payment, sellers instruct the bank to release documents only after buyers fully pay for
the shipments.

Compared with D/A,

o The difference is that D/P terms require buyers to pay first and then get B/L to take over goods. From the seller's
standpoint, D/P is safer than D/A.

o The common point is that sellers surrender documents including the B/E and B/L and buyers make their payments
through banks, instead of direct connections.

Typically, there are 2 common types:

o D/P at Sight, Documents Against Payment at Sight.

o D/P after Sight, Documents Against Payment After Sight.

 D/P at Sight
Simply put, D/P at sight means that buyers pay for their order once they confirm there is no problem with documents like
B/L.

Take 100% D/P at sight for example. The bank will notify the buyer to confirm documents and make a full payment to get
them for the receipt of the goods. Usually, the buyer will go to the bank to pay or authorize the bank to directly deduct the
amount from his account. After that, the buyer will get the B/L for customs clearance and cargo receiving.

 D/P after Sight

Under D/P after sight, buyers are supposed to make a promise of the paid date with the bank. Before the promised payment
date, the bank will keep B/E and shipping documents unreleased.

Generally, there are 3 ways to regulate the payment date under D/P after sight.
 1. xxx days payment after seeing the B/E.

2. xxx days payment after the B/L date.

3. xxx days payment after the date of issuing.

Additionally, some countries regulate xxx days payment after the arrival of the goods.

Concerning the payment term, it is often to see D/P 30-60 days after sight. Such payment terms are often used in long-
distance ocean shipping. It might take 30 days or more to transport goods. Buyers can wait until goods arrive or approach
the destination port, then finish all the payments to get the B/L. In this case, it can ease buyers’ cash flow pressures.

 Payment by DA
Under the payment term D/A, the abbreviation of Documents Against Acceptance, buyers can get shipping documents from
the bank after the acceptance of a B/E, bill of exchange, and just make payments by the due date of the bill. For buyers,
D/A is good as they can obtain the B/L to pick up goods before paying.

Take D/A 90 days for example. Notified by the bank, buyers will confirm the B/E and endorse “acceptance” on the bill, and
then tell the bank “I will pay within 90 days. Believe me and give me shipping documents first.” The bank replies: “Okay, I
trust you and release the documents for you to take delivery of goods.”

18. What is payment by collection? Present the procedures of payment by clean collection.
Seller or his/her bank in pursuant of the seller’s instruction, collects payment from the buyer by presenting draft of the
seller’s instruction, collects payment from the buyer by presenting draft to the buyer with or without accompanying
commercial document.

 Present the procedures of payment by clean collection?

-The exporter sends the goods and commercial documents to importer

-The exporter draws a draft/ bill of exchange and collection instruction to ask the bank to help collect the money

-The remitting bank (serving the exporter) send the B/E, collection instruction to presenting bank to ask to collect the
money from the importer

-Conduct the payment

-Send the signed B/E or refusal to the exporter

-The bank will send the result of collection to the exporter. It may be a signed B/E or a refusal.
 19. Present the procedures of payment by documentary collection.
-The importer sends the goods to the importer

-The exporter draw a draff/ bill of exchange, a collection instruction and set of commercial documents to ask the bank to
help collect the money

-The remitting bank (serving the exporter) send the B/E, collection instruction, the set of commercial document to
presenting bank to ask to collect the money from the importer.

-The presenting bank presents the B/E, collection instruction to the importer to ask for payment

-Conduct the payment

-Send the signed B/E or refusal with the documents to the importer

-The bank will send the result of collect to exporter. It may a signed B/E or a refusal with the set- of docoments

20. What is payment by documentary credit? Why is it said that this method can
guarantee the rights of sellers and buyers against documents?
 What is payment by document credit?

-Letter of credit is an arrangement whereby a bank acting at the request of another person or on its behaft undertakes to
pay, or authorise another bank to pay or negotiate, the sum specified in the credit to a beneficiary if the beneficiary
perfectly fulfils all terms of the credit.

 Why is it said that this method can guarantee the rights of sellers and buyers against documents?
 It's an established for ensuring that sellers will receive payment for goods that have been properly shipped. For buyers, ensures
that the buyer won’t have to pay for the goods unless the presented documents are in full compliance with the letter of credit
21. Specify the main procedures of payment by Documentary credit.( Nêu các thủ tục
chính của thanh toán bằng Tín dụng chứng từ.)

Step 1: Two parties sign a contract with the terms of payment according to the method of L / C.

Step 2: On the terms and conditions, the importer sends the application to the advising bank to request to issue an L / C
for the beneficiary.

Step 3: Based on the application for L / C, if agreed, the issuing bank sets up the L / C and through the advising bank to
notify the L / C to the exporter.

Step 4: The advising bank receipt of L / C, and notify the exporter.

Step 5: If the exporter accepts the L / C, they deliver the goods. If the exporter does not accept the L / C, they request to
repair the L / C.

Step 6: After delivery, the exporter makes a set of documents at the request of the L / C and presents it (through the
advising bank) to the issuing bank for payment.

Step 7: After checking the document set, the issuing bank will make payment; If it is not suitable, refuse to pay and send
back documents to the exporter.

Step 8: The issuing bank requires the importer and transfers the documents to the importer after receiving the money or
accepting the payment.

Step 9: The importer checks the documents, if they see thatim it is consistent with the L / C, pay or accept the payment, if
founding not suitable, they refuse to pay.
22. What are the main contents of contracts under Article 402 Civil Law 2005? (p.26)
-The contents of the contract are freely agreed by the parties. Article 402 Ciril Law 2005 stipulates that the parties may
agree on the following contents, subject to each type of contract:
1. Object of the contract, which is an asset to be handed over, or a task to be performed or not to be performed.

2. Quantity and quality

3. Price and method of payment

4. Time limit, place and approach to execution of the contract

5. Rights and obligations of the patties

6. Liability for breach of the contract

7. Penalty for breach of the contract

8. Other contents
An international sale contract usually consists of presentation, terms and conditions and closing.

22. N a m e t h e m e a s u r e s t o d e s c r i b e t h e " c o m m o d i t y " c l a u s e i n a

sale contract.
 Commercial/trade name and scientific name

 Origin of goods

 Brand name and trademark

 Major specifications

 Major uses

 Harmonized system code

 Note:Agricultural commodities, main specification, period of production,

origins

23. How many types of arbitration are there? When a dispute is

settled by ad hoc arbitration, what must the parties state in
their contract?
 There are 2 types of arbitration: Institutional Arbitration and Ad hoc Arbitration

 Ad hoc Arbitration: established to solve a case and dispersed alter that. In this available regulation situation, the
parties need to deal with: \

+Place of arbitration

+ Sequence of arbitration

+ Applicable laws

+Enforcement of arbitral awards.

24. What are the advantages of settlement by arbitration in comparison with litigation?

Advantages of Arbitration:
1. Arbitration is considered to be more flexible than Litigation. Laws related to the process of litigation are more
complex as compared to arbitration, litigation must follow law of civil court, it involves CPR rule book whereas
Arbitration rules are much more simple and small in number. In arbitration there is no code of procedure, it is
agreed by the parties, they can agree and settle to whatever they want.

2. Arbitration can provide better quality justice than many courts of the country as they are already overloaded
with cases. Arbitration in international agreement also provides better quality decision as compared to domestic
courts.

3. Arbitration expensive as compared to litigation is less time consuming as well as less. Arbitration aims at
providing expeditious resolution than the normal court proceedings, similarly, it is less expensive than the court
proceedings.

4. Arbitrators tend to provide greater level of expertise as compared to a judge, because Arbitrators are appointed
from the bunch of professionals who have specialized knowledge of particular trade or business thereby
boosting confidence and trust of businessmen in proceedings and the resulting award - likely in insurance
agreement where arbitrators chosen in that field. Rather than more general judges.

5. An Arbitration award is ultimate and permanent , and there are very limited chances of further appeal, even if
the arbitrator makes an error of fact or mistake of law. International Commercial arbitration is also unbiased
plus arbitration also guarantees privacy and confidentiality of the matter in dispute and unlike court proceedings
does not disclose the identity of the parties involved in it.

25. What is “penalty” defined by Article 300 in Vietnamese Commercial Law?

According to Article 300 of the Commercial Law of Vietnam (revised - 2005), Penalty/Fine for breach means a
remedy whereby the aggrieved party requests the breaching party to pay an amount of fine for its breach of a
contract, if so agreed in the contract (except for cases of liability exemption specified)

26. What's HS code (HS - Harmonized Commodity Description and Coding System?
Why is HS code important for import and export of goods?

o What's HS code (HS - Harmonized Commodity Description and Coding System

 Among industry classification systems, Harmonized System (HS) Codes are commonly used throughout
the export process for goods. The Harmonized System is a standardized numerical method of
classifying traded products. It is used by customs authorities around the world to identify products when
applicable duties and taxes and for gathering statistics.

o Why is HS code important for import and export of goods

 HS harmonized system code is crucial because it interprets the product's information and allows both
parties to avoid unwanted catalog based confusion during the exchange. Following are the other
elements where HS Codes are significant required:

 Import and tariff export rates specific to the product category.

 Collect and analyze international trade data.

  Internal taxes and liability to pay.

 Finally, the HS Code list also helps importers and exports avoid common foreign exchange challenges
such as exchange interruptions on the border, non-approval to access import privileges, and additional
penalties.

27. Specify the kind of letter of credit which sponsors an exporter.

Red Claused L/C (A red clause documentary credit is an obligation on the part of an opening bank to guarantee advance
payments made by a confirmation (or any other nominated bank) to the beneficiary prior to presentation of documents)

28. Specify the kind of letter of credit of which the value can be transferred to a third
party.
Transferable L/C (+ A credit which can be transferred by the beneficiary related to the terms of the credits. + A
transferable documentary credit is one where the beneficiary may request that part of prodceeds (payment) of the credit be
transferred to one or more other parties who become second beneficiaries)

29. Which kind of letter of credit requires an opening bank to pay on presentation?
At sight L/C (+ An L/C in which if beneficiary presents a perfect set of documents, he

shall get immediate payment. + It's used with sight draft)

30. Which kind of Bill of Lading which shows a defective condition of the goods loaded?
Claused/unclean B/L (It shows that the B/L is qualified which expressly declares a defective condition of goods)

31. Which kind of Bill of Lading which does not show a defective condition of the goods
loaded?
Clean B/L (It implies that there has been no defect in the apparent order or conditionn of goods at the time of receipt or
shipment of goods by the shipping company)

32. Which kind of Bill of Lading indicates that the transportation course covers several
modes of transport from the place of starting to the place of destination
Multimodal B/L (When different modes of transport are used; usually issued when goods stuffed at shipper’s premises
and delivered at consignee’s premises)

33. If a Vietnamese seller exports his goods to China, which form of C/O is he required to
obtain?
Form E (used for the goods traded between Vietnam and China)

34. If a Vietnamese seller exports his goods to Thailand, which form of C/O is he required
to obtain?
Form D (used for the goods trade in intra-ASEAN)

35. What are differences between Incoterms® 2020 and 2010 in terms of FCA, CIP and
DPU rules?
FCA: Incoterms 2020 assists the seller when the FCA rule applies in conjuntion with a

letter of credit. The buyer may require the carrier to provide the seller with the document

confirming the loading of the goods. Banks issuing letters of credit require a bill of lading.

The new rules emphasize that the carrier doesn’t have to comply with such a request. A

better solution is for the bank to request a “received for shipment” bill of lading instead of

a document proving that the cargo was loaded.

CIP: The Insstitute Cargo Clause changed from level C to A in Incoterms 2020/C in

Incoterms 2010

DPU: Not mentioned in Incoterms 2010=DAP (Incoterms 2010)

FCA: Bills of lading with on-board notation

36. What are conditions for an international sale of goods contract to be valid?
Parties to contract to be valid-Provide explanation

Forms of the contract to be valid-Provide explanation

Contents of the contract to be valid-Provide explanation

Subjects of the contract to be valid-Provide explanation

37. Under Vietnamese law, must an international sale contract be in writing?

YES

38. What does FCL in forwarding mean and when is it used?

FULL CONTAINER LOAD (Hàng nguyên công): The content of a container belongs to one shipper/owner

39. What does LCL in forwarding mean and when is it used?

LESS THAN A CONTAINER LOAD (Hàng lẻ): The content of a container belongs to more than one shipper/owner

40. Which method of payment is more secure for a seller: clean or documentary
collection? Why?
Document Collection (A payment method, the documents sent for a collection that include commercial documents and
financial documents; or commercial documents only

(NO attached the financial documents). The collecting bank will only hand over the documents to the buyer when they
have paid, accepted the payment, or completed the other conditions in the Collection Order)