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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 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 occuring 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 CIF 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 arrangement.
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 shipm's rail,
the CIP term should be used.
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S |
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THE SELLER'S OBLIGATIONS |
S1 |
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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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S2 |
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Licences, authorizations and formalities
The seller must obtain at his own risk and expense any export licence or
other official authorization and carry out, where applicable, all
customs formalities necessary for the export of the goods.
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S3 |
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Contracts of carriages 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
compnay 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 buyer's expense
war, strikes, riots and civil commotion risk insurances if procurable.
The minimum insurance shall cover the price provided in the contract
plus ten percent (i.e. 110%) and shall be provided in the currency of
the contract.
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S4 |
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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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S5 |
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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 ort of shipment
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S6 |
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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 S4; and
? the freight and all other costs resulting from S3 a., including the costs of loading the goods on board; and
? the costs of insurance resulting from S3 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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S7 |
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Notice to the buyer
The seller must give the buyer sufficient notice that the goods have
been delivered in accordance with S4 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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S8 |
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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 nogotiable
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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S9 |
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Checking - packaging - marking
The seller must pay the costs of those checking operators (such as
checking quality, measuring, weighing, counting) which are necessary for
the purpose of delivering the goods in accordance with S4.
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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S10 |
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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 S8) 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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B |
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THE BUYER'S OBLIGATIONS
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B1 |
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Payment of the price
The buyer must pay the price as provided in the contract of sale.
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B2 |
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Licences, authorizations and formalities
The buyer must obtain at his own risk and expense any import licence or
other official authorization 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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B3 |
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Contracts of carriage and insurance
a) Contract of carriage
No obligation
b) Contract of insurance
No obligation
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B4 |
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Taking delivery
The buyer must accept delivery of the goods when they have been
delivered in accordance with S4 and receive them from the carrier at the
named port of destination.
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B5 |
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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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B6 |
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Division of costs
The buyer must, subject to the provisions of S3, pay
? all costs relating to the goods from the time they have been delivered in accordance with S4;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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B7 |
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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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B8 |
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Proof of delivery, transport document or equivalent electronic message
The buyer must accept the transport document in accordance with S8 if it is in conformity with the contract.
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B9 |
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Inspection of goods
The buyer must pay the costs of any pre-shipment inspection except when
such inspection in mandated by the authorities of the country of export.
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B10 |
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Other obligations
The buyer must pay all costs and charges incurred in obtaining the
documents or equivalent electronic messages mentioned in S10 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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