FOB contracts and foreign customs charges

Question

Hi guys,

I have had some goods inspected at customs in Shaghai and have been charged $254 for the privilege. Unfortunately I was unfamiliar with the specifics on FOB and wondered if there was a generic FOB contract I could use that states that any charges received from customs (their side) would be covered by the manufacturer. This way it would be clear who covers these charges and I could get my manufacturer to sign this before the goods are produced.

Does anyone know where the responsibility lies here for this charge? Myself or the Manufacturer?

If anyone has any knowledge on this subject I would greatly appreciate this. My Freight Forwarder informs this is just bad luck and is one of the possible disadvantages of import/export.

Thanks in advance for the support, it is greatly appreciated!

Kind regards

Answer

Hi Paul,

Incoterms are set out very clearly in the ICC Incoterms 2010, you shouldnt really have to specify anything beyond this as there really is no ambiguity. Under an FOB contract it is the seller’s responsibility to clear the goods for export – if a fine has been incurred from Chinese customs then it should be the supplier’s responsibility to absorb this. Your Freight Forwarder really should fight that charge away.
If you want to discuss this or any other shipping or international trade matters further I am happy to help, we are family owned and run freight forwarders with 23 years trading behind us – you can call me on 02392756575 or email me on james@mercatorcargo.co.uk
Thanks
James

Answer

Hi Paul,
Under INCO terms 2010, which is the latest edition, the seller (your manufacturer) is fully responsible for costs ; INCOTERMS State ‘Where applicable, the seller must obtain, at its own risk and expense, any export licence or other official authorisation and carry out all customs formalities necessary for the export of the goods." I am just waiting for absolute clarification from BIFA, but I am pretty confident that your supplier should be absorbing these costs.

Answer

Hi guys,

I thought this was the case but wanted to clarify, as I’m a relatively new to all this.
I will re-read the Incoterms2010 to help familiarise myself with the finer details.

Kind regards

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