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Information International rules and organization Incoterms 2010 [iNKOTERMS 2010] CIF - Cost Insurance and Freight - Cost, Insurance and Freight

CIF

Incoterms 2010

COST INSURANCE AND FREIGHT [... named port of destination]
Cost, Insurance and Freight [... named port of destination]

This term is to be used only for sea or inland waterway transport.
"Cost, Insurance and Freight" ( "Cost, Insurance and Freight") means that the seller delivers the goods on board the ship or provide goods delivered in such a way. The risk of loss or damage to the goods passes when the goods are on board the vessel. The seller must sign the contract and pay the costs and freight necessary to bring the goods to the named port of destination.
The seller also contracts for insurance covering the risk of loss or damage to the goods during transport. Buyer should note that under the CIF seller is obliged to provide insurance with minimum coverage only. If the buyer wish to have more protection through insurance, he must either clearly align it with the seller or to carry out at its own expense additional insurance.
When using the term CPT, CIP, CFR or CIF the seller fulfills his obligation to deliver when it hands the goods over to the carrier specified in favorites term way, but not when the goods reached their destination.
This term has two critical points, as the risk and expense go into two different places. While the contract is always determined by the destination port can not be specified port of shipment when the risk passes to the buyer. If the port of shipment is of particular interest to the buyer, the parties are encouraged to more clearly define it in the contract.
Parties are also encouraged by the possibility of more accurately determine the point at the named port of destination, as the costs to this point is the seller. Seller recommended that contracts of carriage, which accurately reflect this choice. If the seller is in his contract of carriage bears the costs of discharge to the agreed point at the port of destination, the seller is not entitled to claim compensation from the purchaser of such costs, unless otherwise agreed by the parties.
The seller must deliver the goods either on board, or ensure that the delivered goods in such a way at the destination. In addition, the seller is obliged to enter into any contract of carriage or to ensure such an agreement. Pointing to the obligation to "provide" takes into account the numerous sales chain, which are used frequently in commodity trading.
CIF may not be appropriate when the goods are handed over to the carrier prior to its placement on board the vessel, for example goods in containers typical for delivery to the terminal. In such situations, it is advisable to use the term CIP.
CIF requires the seller to perform customs formalities for export, if applicable. However, the seller is not obliged to carry out customs formalities for import, pay import duties or perform other customs formalities for import.

THE SELLER

OBLIGATIONS OF THE BUYER

A.1. General obligations of the seller

B.1. General obligations of the buyer

The seller must, in accordance with the contract of sale provide the goods and the commercial invoice counters, as well as any other evidence of conformity conditions of the contract of sale, which may be required by the contract.
Any document referred to in paragraphs A1-A10 may be replaced by an equivalent electronic record or procedure if agreed by the parties or is common.

The buyer must pay the price of the goods, as provided for in the contract of sale.
Any document referred to in paragraphs B1-B10 may be an equivalent electronic record or other procedure, if agreed by the parties or is common.

A.2. Licenses, permits, security checks and formalities

B.2. Licenses, permits, security checks and formalities

If required, the seller must at his own expense and risk to get an export license or other official authorization and carry out all customs formalities necessary for the export of goods.

If required, the buyer must obtain at his own risk and expense, import license or other official authorization and carry out all customs formalities for the import of goods and its transportation through any country.

A.3. carriage and insurance

B.3. carriage and insurance

a) Contract of carriage
The seller must contract or procure the conclusion of transport of goods from a named point of delivery of the contract, if it is determined at the point of delivery to the named port of destination or, if agreed, to any point in a port. The contract of carriage must be made by the seller, on the usual conditions and provide for carriage by generally accepted direction of the ship of the type normally used for the transport of goods sold.
b) Contract of insurance
The seller must at his own expense carry cargo insurance, corresponding to at least the minimum coverage, as required by paragraph "C" Institutskaya terms of cargo insurance (Institute Cargo Clause) (LMA / IUA) or other similar conditions. The insurance contract must be concluded with an insurer or an insurance company having a good reputation, and provide the purchaser or any person having an insurable interest in the goods, the right to claim directly against the insurer.
By the purchaser, the seller is obliged, provided that the buyer the necessary information required by the seller to carry the buyer's expense such additional insurance, which is possible to get, for example, as provided in paragraphs "A" or "B" Institutskaya terms of cargo insurance (LMA / IUA) or other similar terms, and / or coating the corresponding Institutsky terms of military action, and / or university terms of strikes (LMA / IUA), or other similar conditions.
Insurance should cover, at a minimum, provided for in the sales contract price plus 10% (ie 110%) and carried out in the currency of the contract of sale.
Insurance should provide goods ranging from the delivery of the item, as provided for in paragraphs A4 and A5 and, at least to a named port of destination.
The seller must provide the buyer with the insurance policy or other evidence of insurance cover.
In addition, the seller must provide the buyer, at the buyer's request, risk and expense (if any expenses) information that may be needed to the buyer to provide additional security.

a) Contract of carriage
The buyer has no obligation to the seller to conclude a contract of carriage.
b) Contract of insurance
The buyer has no obligation to the seller to conclude a contract of insurance. However, the buyer must provide the seller, at his request, the necessary information to provide additional insurance required by the buyer, as provided for in paragraph A3 b).

A.4. Supply

B.4. Taking delivery

The seller must deliver the goods either by placing it on the board or through the provision of goods delivered in this way. In this and in another case, the seller must deliver the goods on the date or within the agreed period and in the manner which is usual for this port.

The buyer must take delivery of the goods as soon as they have been delivered in accordance with paragraph A4, and take the goods from the carrier at the named port of destination.

A.5. Transfer of risks

B.5. Transfer of risks

Seller shall bear all loss or damage to the goods until it is delivered in accordance with paragraph A4, with the exception of the risks of loss or damage in the circumstances referred to in paragraph B5.

The buyer bears all risks of loss or damage to the goods from the moment of delivery in accordance with paragraph A4.
At default by the buyer obligations to provide notification in accordance with paragraph B7, he shall bear all risks of loss or damage to the goods from the agreed date or the date on which expired the agreed delivery period, provided that the goods were explicitly individualized as a commodity, which is the subject agreement.

A.6. Division of costs

B.6. Division of costs

The seller must pay:
a) all costs relating to the goods until they have been delivered in accordance with paragraph A4, except for expenses payable by the purchaser as provided in paragraph B6; and
b) Freight and other specified in paragraph A3 a), including the costs of loading the goods on board and any charges in connection with the unloading of the goods at the agreed port of discharge which the contract of carriage charged to the seller; and
c) insurance costs referred to in paragraph A3 b);
d) if necessary, the costs of customs formalities necessary for export of goods, as well as all duties, taxes and charges payable on export, as well as the cost of its transportation through any country if they are under the terms of the contract of carriage charged to the seller.

The buyer must, subject to the provisions of paragraph A3 a), pay:
a) all related product costs since it was delivered in accordance with paragraph A4, except, if applicable, the costs of customs formalities necessary for export of goods, as well as taxes, duties and other charges payable for export as provided for in A6 d) clause;
b) all related product costs and fees in transit until their arrival at the agreed port of destination, unless such costs and charges do not apply under the contract of carriage for the seller;
c) the discharge, including lighterage and port charges, unless such costs and charges do not belong to the seller under the contract of carriage;
d) any additional costs incurred as a result of failure to give notice to the seller in accordance with paragraph B7, from the agreed date or the expiry of the agreed period for shipment, provided that the goods were explicitly individualized as a commodity, which is the subject of the contract;
e) if applicable, the cost of payment of taxes, duties and other official charges as well as for the implementation of customs formalities payable upon import of the goods and the cost to transport it through any country unless such costs and charges do not apply under the contract of carriage to the seller.
f) cost of additional insurance provided at the request of the buyer, as provided for in paragraphs A3 b) and B3 b).

A.7. Notice to the buyer

B.7. Notice to the seller

The seller must provide the buyer proper notice, allowing the buyer to take steps normally required in order that he may carry out acceptance of the goods.

If the buyer is entitled to determine the time for shipment and / or the point of receipt of the goods at the named port of destination, he must account to the seller due notice thereof.

A.8. Document delivery

B.8. Proof of delivery

The seller must at his own expense in a timely manner to provide the buyer with the usual transport document to the agreed port of destination.
Such a transport document should cover the goods under the contract and be dated within the agreed period of shipment, provide the buyer the right load requirements from the carrier at the port of destination and, unless otherwise agreed, enable the buyer to sell the goods in transit time by sending the document to a subsequent buyer or by notification to the carrier . If the transport document is negotiable and issued in several originals, a buyer must be a full set of originals.

The buyer must accept the transport document issued in accordance with paragraph A8 if it corresponds to the contract.

A.9. Checking, packaging, labeling

B.9. Inspection of goods

The seller must pay all costs associated with checking (checking quality, measuring, weighing, counting) which are necessary for the delivery of goods in accordance with paragraph A4, as well as the costs of inspection of goods before shipment, which is prescribed by the authorities of the exporting country.
The seller must at his own expense packaging of goods, except in cases when the particular trade is usually taken to ship specified in the contract goods unpacked. The seller can pack the goods in such a way as is necessary for its transportation, unless the buyer before the contract does not notify the seller of specific packaging requirements. Marking packaged goods must be carried out properly.

The buyer must pay the costs for the mandatory inspection of goods prior to shipment, except when such inspection is carried out by order of the authorities of the exporting country.

A.10. Assistance in obtaining information and relating to this expenditure

B.10. Assistance in obtaining information and relating to this expenditure

If need be, the seller is obliged to provide the purchaser or to assist him in obtaining, at the request of the buyer, at his risk and expense, documents and information, including important safety information, which may require the buyer to the goods import and / or transport it to the final destination.
The seller is obliged to compensate the buyer for all costs and charges incurred by the buyer in obtaining or providing assistance in obtaining documents and information as provided for in paragraph B10.

The buyer must notify the seller in a timely manner the requirements with regard to safety information, so that the seller could act in accordance with paragraph A10.
The buyer must reimburse the seller incurred by him costs and charges for providing or rendering assistance in obtaining documents and information as provided for in paragraph A10.
If required, the buyer is obliged to provide the seller or facilitate in the seller receiving, at the request of the seller, at his risk and expense, documents and information, including important safety information, which may require the seller to transport, export of goods and for their transport through any country.