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The International Commerce Terms (INCOTERMS) define the obligations of both buyer and seller relating to shipment of goods. INCOTERMS 2020 shall govern shipment terms of all UNDP contracts.

Commonly used terms in UNDP procurement include:

  • for local procurement use the term “FCA” (Free Carrier);
  • for international procurement where the transportation is arranged by the Business Unit, use the term “FOB” (Free on Board) or “FCA”, depending on where the goods are to be delivered;
  • for international procurement where the Supplier arranges for transport, use the term “CPT” (Carriage Paid To);
  • for international procurement where the Supplier arranges both transportation and insurance, use the term “CIP” (Carriage and Insurance Paid To); and
  • for international procurement where UNDP elects for the Supplier to bear all risks and costs associated with the transport of goods to the country of destination, use the term “DDU” (Delivered Duty Unpaid). Note: this method is expensive and should be used only during emergency operations or for the procurement of medical supplies.

All the terms referred to above should be followed by named place/destination point.

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