CIF
COST, INSURANCE AND
FREIGHT
(... named port of destination)
«Cost, Insurance and Freight» means that the seller delivers when the goods
pass the ship's rail in the port of shipment. The seller
must pay the costs and freight necessary to bring the goods
to the named port of destination BUT the risk of loss of or
damage to the goods, as well as any additional costs due to
events occurring after the time of delivery, are transferred
from the seller to the buyer. However, in CIF the seller
also has to procure marine insurance against the buyer's
risk of loss of or damage to the goods during the carriage.
Consequently, the seller contracts for insurance and pays
the insurance premium. The buyer should note that under the
CIP term the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have the protection
of greater cover, he would either need to agree as much
expressly with the seller or to make his own extra insurance
arrangements. The CIF term requires the seller to clear the
goods for export. This term can be used only for sea and
inland waterway transport. If the parties do not intend to
deliver the goods across the ship's rail, the CIP term
should be used.
THE
SELLER'S OBLIGATIONS
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THE
BUYER'S OBLIGATIONS
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A1
Provision of goods in conformity with the contract
The
seller must provide the goods and the commercial
invoice, or its equivalent electronic message, in
conformity with the contract of sale and any other
evidence of conformity which may be required by the
contract.
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B1
Payment of the price
The
buyer must pay the price as provided in the contract
of sale.
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A2
Licences, authorisations and formalities
The
seller must obtain at his own risk and expense any
export licence or other official authorisation and
carry out, where applicable, all customs formalities
necessary for the export of the goods.
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B2
Licences, authorisations and formalities
The
buyer must obtain at his own risk and expense any
import licence or other official authorisation and
carry out, where applicable, all customs formalities
for the import of the goods and for their transit
through any country.
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A3
Contracts of carriage and insurance
a)
Contract of carriage
The seller must contract on usual terms at his own
expense for the carriage of the goods to the named
port of destination by the usual route in a seagoing
vessel (or inland waterway vessel as the case may be)
of the type normally used for the transport of goods
of the contract description.
b) Contract of insurance
The seller must obtain at his own expense cargo
insurance as agreed in the contract, such that the
buyer, or any other person having an insurable
interest in the goods, shall be entitled to claim
directly from the insurer and provide the buyer with
the insurance policy or other evidence of insurance
cover.
The insurance shall be contracted with underwriters or
an insurance company of good repute and, failing
express agreement to the contrary, be in accordance
with minimum cover of the Institute Cargo Clauses
(Institute of London Underwriters) or any similar set
of clauses. The duration of insurance cover shall be
in accordance with B5 and B4. When required by the
buyer, the seller shall provide at the buyers expense
war, strikes, riots and civil commotion risk
insurances if procurable. The minimum insurance shall
cover the price provided in the contract plus ten per
cent (i.e. 110%) and shall be provided in the currency
of the contract.
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B3 Contracts of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance No obligation.
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A4
Delivery
The
seller must deliver the goods on board the vessel at
the port of shipment on the date or within the agreed
period.
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B4
Taking delivery
The buyer must accept delivery of the goods when they
have been delivered in accordance with A4 and receive
them from the carrier at the named port of
destination.
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A5
Transfer of risks
The
seller must. subject to the provisions of B5, bear all
risks of loss of or damage to the goods until such
time as they have passed the ship's rail at the port
of shipment.
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B5
Transfer of risks
The buyer must bear all risks of loss of or damage to
the goods from the time they have passed the ship's
rail at the port of shipment.
The buyer must, should he fail to give notice in
accordance with B7, bear all risks of loss of or
damage to the goods from the agreed date or the expiry
date of the period fixed for shipment provided,
however, that the goods have been duly appropriated to
the contract, that is to say, clearly set aside or
otherwise identified as the contract goods.
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A6
Division of costs
The
seller must, subject to the provisions of B6, pay
• all costs relating to the goods until such time as
they have been delivered in accordance with A4: and
• the freight and all other costs resulting from A3
a), including the costs of loading the goods on board:
and
• the costs of insurance resulting from A3 b); and
• any charges for unloading at the agreed port of
discharge which were for the seller's account under
the contract of carriage; and
• where applicable, the costs of customs formalities
necessary for export as well as all duties, taxes and
other charges payable upon export, and for their
transit through any country if they were for the
seller s account under the contract of carriage.
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B6
Division of costs
The buyer must, subject to the provisions of A3. pay
• all costs relating to the goods from the time they
have been delivered in accordance with A4; and
• all costs and charges relating to the goods whilst
in transit until their arrival at the port of
destination, unless such costs and charges were for
the seller's account under the contract of carriage;
and
• unloading costs including lighterage and wharfage
charges. unless such costs and charges were for the
seller's account under the contract of carriage: and
• all additional costs incurred if he fails to give
notice in accordance with B7, for the goods from the
agreed date or the expiry date of the period fixed for
shipment, provided, however, that the goods have been
duly appropriated to the contract. that is to say,
clearly set aside or otherwise identified as the
contract goods: and
• where applicable, all duties, taxes and other
charges as well as the costs of carrying out customs
formalities payable upon import of the goods and,
where necessary, for their transit through any country
unless included within the cost of the contract of
carriage.
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A7
Notice to the buyer
The
seller must give the buyer sufficient notice that the
goods have been delivered in accordance with A4 as
well as any other notice required in order to allow
the buyer to take measures which are normally
necessary to enable him to take the goods.
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B7 Notice to the seller
The
buyer must, whenever he is entitled to determine the
time for shipping the goods and/or the port of
destination, give the seller sufficient notice
thereof.
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A8
Proof of delivery, transport document or equivalent
electronic message
The
seller must, at his own expense, provide the buyer
without delay with the usual transport document for
the agreed port of destination.
This document (for example a negotiable bill of
lading, a non-negotiable sea waybill or an inland
waterway document) must cover the contract goods, be
dated within the period agreed for shipment, enable
the buyer to claim the goods from the carrier at the
port of destination and, unless otherwise agreed,
enable the buyer to sell the goods in transit by the
transfer of the document to a subsequent buyer (the
negotiable bill of lading) or by notification to the
carrier.
When such a transport document is issued In several
originals, a full set of originals must be presented
to the buyer. Where the seller and the buyer have
agreed to communicate electronically, the document
referred to in the preceding paragraphs may be
replaced by an equivalent electronic data interchange
(EDI) message.
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B8
Proof of delivery, transport document or equivalent
electronic message
The
buyer must accept the transport document in accordance
with A8 if it is in conformity with the contract.
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A9
Checking - packaging - marking
The
seller must pay the costs of those checking operations
(such as checking quality, measuring, weighing,
counting) which are necessary for the purpose of
delivering the goods in accordance with A4.
The seller must provide at his own expense packaging
(unless it is usual for the particular trade to ship
the goods of the contract description unpacked) which
is required for the transport of the goods arranged by
him. Packaging is to be marked appropriately.
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B9
Inspection of goods
The
buyer must pay the costs of any pre-shipment
inspection except when such inspection is mandated by
the authorities of the country of export.
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A10
Other obligations
The
seller must render the buyer at the latter's request,
risk and expense, every assistance in obtaining any
documents or equivalent electronic messages (other
than those mentioned in AS) issued or transmitted in
the country of shipment and/or of origin which the
buyer may require for the import of the goods and,
where necessary, for their transit through any
country.
The seller must provide the buyer, upon request, with
the necessary information for procuring any additional
insurance.
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B10
Other obligations
The
buyer must pay all costs and charges incurred in
obtaining the documents or equivalent electronic
messages mentioned in A10 and reimburse those incurred
by the seller in rendering his assistance in
accordance therewith.
The buyer must provide the seller, upon request, with
the necessary information for procuring insurance.
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