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What is FAS? Free Alongside Ship Incoterms 2020 explanation

What is FAS incoterms 2020

What is FAS? – FAS incoterms 2020 (Free Alongside Ship) is the latest version of FAS ICC’s Incoterms. Free Alongside Ship is belong to Group F (Main Carriage Unpaid) obliges the seller to perform export customs clearance. The seller does not pay transport and insurance costs. FCA, FAS, and FOB belong to this group.

What is FAS – Free Alongside Ship?

Free Alongside Ship means that the seller delivers the goods to the buyer:

  • When the goods are placed alongside the ship (e.g. on a quay or a barge), nominated by the buyer, at the named port of shipment or when the seller procures goods already so delivered.

The risk of loss or damage to the goods transfers when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.

This rule is to be used only for sea or inland waterway transport where the parties intend to deliver the goods by placing the goods alongside a vessel. Thus, the FAS rule is not appropriate where goods are handed over to the carrier before they are alongside the vessel, for example where goods are handed over to a carrier at a container terminal. Where this is the case, parties should consider using the FCA rule rather than the FAS rule.

The parties are well advised to specify as clearly as possible the loading point at the named port of shipment where the goods are to be transferred from the quay or barge to the ship, as the costs and risk to that point are for the account of the seller and these costs and associated handling charges may vary according to the practice of the port.

Incoterms 2020 FAS requires the seller to clear the goods for export, where applicable. However, the seller has no obligations to clear the goods for import or for transit through third countries, to pay any import duty or to carry out any import customs formalities.

FAS – Free Alongside Ship’s Cost and obligation

Blue: Cost/ Yellow: Risk/ Orange: Insurance

INCOTERMS 2020 FAS

Using FAS Incoterms 2020, the seller bears costs

  • The costs of export formalities: customs, taxes, export authorization, export security clearance and the cost of obtaining all official permits;
  • The costs of providing the buyer with proof that the goods have been delivered under the contract;
  • The costs related to the shipment of goods until they are delivered;
  • The costs of control activities, such as quality control, measurement, weighing, counting, delivery of appropriately labeled packaging.

Obligations of the seller

  • The seller has to carry out all the duties under the terms of delivery specified in the contract. This means delivery of the goods along with a commercial invoice in conformity with the contract of sale and other related documents.
  • He delivers goods by placing them alongside the ship within the prior specified period and at the named port indicated by the buyer.
  • He informs the buyer in advance of the delivery of the goods.
  • He provides at his own expense a document confirming delivery of the goods to the buyer. If such proof is a transport document, the seller must assist the buyer, at his request, risk, and cost, in obtaining it.
  • The seller assists the buyer at the buyers request, risk and cost in obtaining any documents necessary for transit and import clearance formalities.
  • He packs and marks the goods.
  • He operates according to all transport-related requirements until delivery of the goods to the buyer.

The buyer bears costs

  • The costs of import and transit formalities: customs, taxes, import permit, import security clearance and costs of obtaining all official permits;
  • The costs of obtaining the contract of carriage;
  • Any additional costs if the buyer to fulfill its obligations;
  • The costs related to the conclusion of the contract of carriage.

The buyer’s obligations

  • He concludes the contract of carriage from the named port of shipment, expect where the contract of carriage is made by the seller (at the buyer’s expense and risk).
  • He assists the seller, at his request, risk and cost, in obtaining any documents necessary for the export clearance formalities.
  • The buyer must notify the seller in advance of any safety requirements related to transport, ship name, loading point and the delivery date within the period agreed in the contract.

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Source: Shiphub

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