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  • WTO issues 2020 Annual Report May 28, 2020
    The WTO’s Annual Report, published today (28 May), provides a comprehensive account of the organization’s activities in 2019 and early 2020. The Report opens with a message from Director-General Roberto Azevêdo and a brief overview of the year. This is followed by in-depth accounts of the WTO’s main areas of activity over the past 12 […]
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  • 2020 WTO Public Forum cancelled May 28, 2020
    After careful consideration of COVID-19 related uncertainties and health concerns, the WTO has decided to cancel this year’s WTO Public Forum, scheduled for 29 September to 2 October. This decision responds to the complexities around planning to host thousands of people from around the world for a public event under the WTO roof, as well […]
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  • DDG Wolff: This is the time to consider the future of the multilateral trading system May 27, 2020
    The outbreak of the COVID-19 pandemic has heightened the urgent need to examine the underlying principles and values of the WTO and whether the organization needs change, Deputy Director-General Alan Wolff said on 27 May. Speaking at a webinar hosted by the Korean International Trade Association, DDG Wolff called for immediate action to control the […]
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  • Members discuss impact of COVID-19 on developing economies’ participation in world trade May 26, 2020
    On 26 May, WTO members assessed the impact of the COVID-19 pandemic on the trading capacity of developing countries in a virtual meeting of the Committee on Trade and Development. The new chair, Afghanistan’s WTO Ambassador, Mohammad Qurban Haqjo, said: “Trade must form part of the solution in assisting and supporting recovery in developing countries.”
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Cost and Freight CFR



 

Maritime and Inland Waterway transport only

Cost and Freight

With the Cost and Freight (CFR) Incoterms rule, the Seller must bear all the costs of transport up to the port of destination. This includes the pre-carriage transport, main transport costs and terminal handling costs (depending on liner terms).

In addition, the Seller is liable for the export custom clearance formalities (export licence for instance).

However, as soon as the goods are on board the ship, the delivery is deemed completed and the risks (damage and loss) are transferred to the Buyer.

Accordingly, the buyer is liable for import custom duties, terminal handling costs at the port of arrival (depending on liner terms) and post-routing transport costs.

Although there is no formal obligation regarding insurance coverage, upon buyer’s request the seller must provide any information needed for insuring the goods (at the buyer’s expense).

Furthermore, the Seller has the obligation to provide the transport documents needed by the buyer for claiming the goods from the carrier in the port of destination.

Moreover, any pre-shipment inspection required by law in the seller’s country, is at the seller’s expense.

 

Usual Documents required:

Commercial Invoice

Documents as agreed in the contract

Transport documents (Clean Bill of lading with the mention “freight prepaid” and full set of originals when issued in negotiable form)

 

The Seller must assist the Buyer for obtaining documents that might be required for the importation.

Note that the related costs engendered by such assistance are at the buyer’s expense.

Caution:

Make sure the port of departure (transfer of risk from seller to buyer) and the exact point in the port of arrival are precisely specified in the sales contract (paid for by the seller).

When should I use the Cost and Freight (CFR) Incoterms?

This Incoterm is recommended when the Seller trades produces and raw materials (such as commodities for instance) and where he has an easy access to bulk cargo (dry or liquid)

However for containerised goods, usually handed over to the carrier before the loading aboard the vessel, CFR is not fit for purpose and CPT (Carriage paid to) should be considered instead.