The Incoterm CIF stands for ‘Carriage and Insurance Paid to’. CIF is a shipping clause that can only be used in maritime or inland waterway transport. This Incoterm is one of the dispatch clauses whereby the seller bears the costs of sea transport and sea freight insurance.
Under the CIF trade clause, in addition to delivery at the port of dispatch, the seller must conclude the sea freight contract and bear the regular freight costs to the port of destination. The sea carrier is therefore the seller's agent.
- The marine cargo insurance that the seller must take out on behalf of the buyer must cover at least 110% of the value of the goods, but only cover the few risks of ‘limited cover’ (Institute Cargo Clauses – Covering C).
- Remember that when calculating the statistical value, all transport costs after leaving the EU external border must be deducted from the value of the goods.
- This clause is particularly suitable for bulk goods. For general cargo or container transport, the CIP clause may therefore be preferable.
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