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  • Trade Policy Review: Saudi Arabia March 3, 2021
    The third review of the trade policies and practices of Saudi Arabia takes place on 3 and 5 March 2021. The basis for the review is a report by the WTO Secretariat and a report by the Government of Saudi Arabia.
    WTO
  • Civil society call for fishing subsidies deal welcomed by Dr Ngozi and negotiations chair March 1, 2021
    Director-General Ngozi Okonjo-Iweala welcomed civil society’s plea for a successful conclusion to the fisheries subsidies negotiations, illustrated through a fish ice sculpture set up by a coalition of non-governmental organizations (NGOs) in front of the WTO headquarters on 1 March. Dr Okonjo-Iweala visited the sculpture accompanied by the chair of the negotiations, Ambassador Santiago Wills […]
    WTO
  • Twelfth Ministerial Conference to take place in Geneva in late 2021 March 1, 2021
    WTO members have agreed that the organization’s Twelfth Ministerial Conference (MC12) will take place in the week of 29 November 2021 in Geneva, Switzerland. The timing and venue were endorsed at a meeting of the WTO’s General Council on 1 March.
    WTO
  • DG Okonjo-Iweala: WTO can deliver results if members “accept we can do things differently” March 1, 2021
    Addressing the WTO General Council immediately after taking office on 1 March, Director-General Ngozi Okonjo-Iweala called on members to “do things differently” to achieve reforms necessary to keep the WTO relevant, starting with swift action to curb harmful fisheries subsidies, and to help scale up COVID-19 vaccine production and distribution. The new head of the […]
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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.