In practicing Customs law, one should know the terms used internationally including Pakistan-<\/p>\n

(LC):-<\/u><\/strong>       A Letter of Credit (LC) is a document issued mostly by a financial institution that usually provides an irrevocable payment undertaking (it can sometimes be revocable, confirmed, unconfirmed, transferable or others e.q. back to back or revolving but is most commonly irrevocable \/ confirmed) to a beneficiary against complying documents as stated in the credit.<\/p>\n

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BL:-<\/u><\/strong>         <\/strong>Bill of Loading (BOL or B\/L) is a document issued by a carrier, eg. A ship\u2019s master or by a company\u2019s shipping department acknowledges that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified.<\/p>\n

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(CFR)<\/u><\/strong>         Cost and Freight (CFR) means that the seller pays for transportation to the port of Loading (POL), subsequent loading, and the freight. The buyer pays for the insurance and transportation of the goods from the part of Discharge (POD) to his destination. The passing of risk occurs when the goods pass the ship\u2019s rail at the port of shipment which means that this term cannot be used for airfreight or land transport and also is inappropriate for most container sea shipments.<\/p>\n

(CIP)<\/u><\/strong>         <\/strong>Carriage and Insurance Paid (CIP), the passing of risk occurs when the goods have been delivered into the custody of the first carrier. This means that the buyer bears all risk and any additional costs occurring after the goods have been so delivered. This is the same as CPT except that the seller also pays for the insurance.  The seller is required to obtain insurance only on the minimum cover, additional coverage is the responsibility of the buyer or must be agreed upon between the seller and buyer.  Under CIP, the seller is also required to clear the goods for export.<\/p>\n

(FCA)<\/u><\/strong>              <\/strong>Free Carrier (FCA), the seller delivers the goods into the custody of the first carrier, and this is where risk passes from seller to buyer.  The buyer pays for the transportation. It can be used for all modes of transportation including multimodal transport, such as in shipping containers where the ship’s rail plays no relevant part in determining a shipping point.<\/p>\n

(CPT)<\/u><\/strong>             Carriage Paid To (CPT) is an international trade term that means the seller delivers the goods at their expense to a carrier or another person nominated by the seller. The seller assumes all risks, including loss, until the goods are in the care of the nominated party.<\/p>\n

(FAS)<\/u><\/strong>             Free Along Side (FAS) means that the seller pays for transportation of the goods to the port o shipment. The buyer pays loading costs, freight, insurance, unloading costs and transportation from the port of destination to his factory. The passing of risk occurs when the goods have been delivered to the quay at the port of shipment.<\/p>\n

(FOB)<\/u><\/strong>           Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB shipping point” or “FOB origin” means the buyer is at risk once the seller ships the product.<\/p>\n