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  • Items proposed for consideration at the next meeting of Dispute Settlement Body February 28, 2020
    The WTO Secretariat has circulated a meeting notice and list of items proposed for the next meeting, on 28 February 2020, of the Dispute Settlement Body, which consists of all WTO members and oversees legal disputes among them. The meeting notice is circulated in the form of a document officially called an “airgram”.
    WTO
  • US donates USD 600,000 to further developing countries’ trading capacities February 25, 2020
    The United States contributed USD 600,000 (CHF 590,000) in 2019 to help developing and least-developed countries (LCDs) participate effectively in global trade negotiations. This donation will finance training workshops for officials from WTO member governments to help them deepen their understanding of multilateral trade rules and strengthen their negotiating capacity.
    WTO
  • Lithuania donates EUR 50,000 to enhance developing countries’ trading capacity February 24, 2020
    Lithuania is contributing EUR 50,000 (CHF 53,000) to help developing and least-developed countries take an active part in global trade negotiations. The contribution was acknowledged by Director-General Roberto Azevêdo at a meeting with Lithuania’s Minister of Foreign Affairs, Linas Linkevičius, on 24 February 2020.
    WTO
  • Third anniversary of Trade Facilitation Agreement sees increasing implementation rate February 22, 2020
    Three years since the Trade Facilitation Agreement (TFA) entered into force on 22 February 2017, WTO members have continued to make steady progress in its implementation. Director-General Roberto Azevêdo, on the occasion of the TFA’s third anniversary, welcomed members’ efforts to ensure traders can reap the full benefits of the Agreement.
    WTO

Cost Insurance and freight CIF



 

Maritime and Inland Waterway transport only

Cost Insurance Freight

Here the Seller is liable for every cost up to the port of destination. In other words, the Seller has to pay for pre-carriage transport costs, Terminal Handling charges (depending on liner terms), main transport costs and insurance costs.

However, the transfer of risks (loss and damage) occurs as soon as the goods are on board the vessel at the port of shipment (departure).

Moreover, the Seller is required to purchase cargo insurance with a minimum cover (Clause C of the Institute Cargo Clauses LMA/ IUA), from an insurance company of good reputation. Note that the buyer should be entitled to make a claim directly.

Any additional coverage requested by the buyer (riots, strikes, war etc.) is at his own expense.

The selected insurance must cover 110% of the value declared within the sales contract and must be denominated in the same currency.

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

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

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 expense of the buyer.

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.

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

Usual Documents required:

  • Commercial Invoice
  • Documents as agreed in the contract
  • Insurance Policy (where the buyer should be entitled to claim)
  • Transport documents:
    1. Dated in line with agreed period for shipment
    2. Clean Bill of lading with the mention “freight prepaid” and full set of originals when issued in negotiable form

Caution!

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

When should I use the Cost Insurance and Freight (CIF) Incoterms rule?

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, CIF is not fit for purpose and Carriage insurance paid to (CIP) rule should be considered instead.