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This term can be used regardless of the chosen mode of transport, as well as when using more than one mode of transport.
CIP-Incoterms-2010-VINCULUM-Customs clearance Vladivostok-GC-IMPORT40Factory or warehouse of the manufacturer or sellerDelivery from the factory or warehouse to the departure terminalPlacement of goods at the cargo terminalPlacement of goods on board the vesselState borderSea transportation to the port of dischargePlacement in a temporary storage warehouse at the port of arrival (unloading)Delivery of goods ready for unloading from the vehicleCargo recipient's warehouseThe area of expenses and responsibility of the seller whenCIPThe area of costs and responsibility of the buyer at CIPThe moment of transition of risks at CIP!

Carriage and Insurance Paid to(Cost and insurance paid before) means that the seller transfersproductto the carrier or another person nominated by the seller at an agreed place (if such a place is agreed by the parties) and that the seller is obliged to conclude a contract of carriage and bear the transportation costs necessary to deliver the goods to the agreed destination.

The seller must conclude an insurance contract with minimal coverage covering the risk of loss or damage to the goods during transportation. If the buyer wishes to have more protection through insurance, he must either clearly agree this with the seller or carry out additional insurance at his own expense.

When using CIP terms, the seller fulfills his delivery obligation when he delivers the goods to the carrier, and not when the goods have reached their destination.

This term contains two critical points, since risk and costs are transferred in two different places. The parties are recommended to determine as accurately as possible in the contract the place of delivery of the goods in which the risk passes to the buyer, as well as the named destination to which the seller is obliged to conclude a contract of carriage.

When using several carriers to transport goods in an agreed direction and if the parties have not agreed on a specific delivery point, the disadvantage is that the risk passes when the goods are transferred to the first carrier at a point whose choice completely depends on the seller and which is beyond the buyer's control. Hin order for the transfer of risk to be carried out at a later stage (i.e. at the seaport or at the airport), this must be defined in the contract.

The parties are also advised to identify the point at the agreed destination as accurately as possible, since the costs up to this point are borne by the seller. It is recommended that the seller provide contracts of carriage that accurately reflect this choice. If the seller under his contract of carriage bears the costs of unloading at the agreed destination, the seller has no right to demand from the buyer compensation for such costs, unless otherwise agreed by the parties.

The CIP conditions require the seller to perform customs formalities for export, if applicable. However, the seller is not obliged to perform customs formalities for importation, pay import duties or perform other customs formalities upon importation.

For the importer, CIP is convenient because the exporter takes care of the organizational aspects with the delivery of the goods and its insurance. But all these costs, the seller will still include in the price of the goods.

 

Find out what needs to be considered and taken into account when choosing CIP Close the list of actions with CIP
  • to clarify in detail the parameters and characteristics of cargo packages (including labeling), this is necessary for subsequent customs clearance of goods;
  • clearly coordinate with the seller the port of delivery of the goods;
  • to determine in the contract the place of transfer of the goods to the carrier, since the seller fulfills his delivery obligations when he transfers the goods to the carrier;
  • to agree with the insurance company the terms of the increased insurance, if necessary (according to CIP, the seller is obliged to provide insurance with only minimal coverage);
  • obtain permits if necessary;
  • pay customs fees for the import of goods;
  • to carry out customs clearance of goods;

This list is not complete and depends on the specific case, under these conditions of delivery, the seller's logistics may give a lower freight cost compared to, for example,FOB, but it may happen that in the end, due to the fact that the buyer pays various port fees at the port of arrival and this increases the total cost, it is also not recommended to use this term ifcargoit is planned to ship further across Russia in container trains.

 

1.General obligations of the seller and the buyer under the conditions of CIP

A.1.The seller is obliged, in accordance with the contract of sale, to provide the buyer with the goods, a commercial invoice-invoice, as well as any other proof of compliance of the goods with the terms of the contract of sale, which may be required under the terms of the contract.
Any document referred to in paragraphs A1-A10 may be replaced by an equivalent electronic record or procedure, if this is agreed by the parties or is customary.
V.1.The buyer is obliged to pay the price of the goods, as stipulated in the contract of sale.
Any document referred to in paragraphs B1-B10 may be in the form of an equivalent electronic record or other procedure, if this is agreed by the parties or is customary.

2.Licenses, permits, security controls and other formalities under CIP conditions

A.2.If necessary, the seller is obliged, at his own expense and at his own risk, to obtain an export license or other official permit and to perform all customs formalities necessary for the export of goods and their transportation through any country.
B.2.If necessary, the buyer is obliged to obtain, at his own expense and at his own risk, an import license or other official permit and perform all customs formalities necessary for the import of goods and their transportation through any country.

3.Contracts of carriage and insurance under CIP conditions

A.3.a) Contract of carriage
The seller is obliged to conclude or ensure the conclusion of a contract for the carriage of goods from the named point of delivery, if it is determined, or from the place of delivery to the named destination or, if agreed, to any point in such a place.
The contract of carriage must be concluded on the usual terms at the expense of the seller and provide for transportation in the usual direction and in the usual way. If a specific point is not agreed or cannot be determined based on practice, the seller can choose the delivery point or the point at the agreed destination that is most suitable for his purposes. 
b) Insurance contract
The seller is obliged to carry out cargo insurance at his own expense, corresponding to at least the minimum coverage, as provided for in paragraph "C" of the Institute's Cargo Insurance Conditions (LMA/IUA) or other similar conditions. The insurance contract must be concluded with an insurer or with an insurance company that has a good reputation, and provide the buyer or any person with an insurance interest in the product with the right to claim directly to the insurer.
At the request of the buyer, the seller is obliged, provided that the buyer provides the necessary information required by the seller, to carry out at the buyer's expense such additional insurance as is possible to obtain, for example, as provided for in paragraph "A" or "B" of the Institute Conditions of Cargo Insurance (LMA/IUA) or other similar conditions, and/or coverage corresponding to the Institute conditions on military operations, and/or Institute Conditions (LMA/IUA) on strikes or other similar conditions.
Insurance must cover at least the price stipulated in the contract of sale plus 10% (i.e. 110%) and be carried out in the currency of the contract of sale.
Insurance must cover the goods starting from the point of delivery, as provided in paragraphs A4 and A5 and at least up to the named destination.
The seller is obliged to provide the buyer with an insurance policy or other proof of insurance coverage.
In addition, the seller is obliged to provide the buyer, at the buyer's request, at his risk and at his expense, with information that the buyer may need to provide additional insurance.
B.3.a) Contract of carriage
The buyer has no obligation to the seller to conclude a contract of carriage.
b) Insurance contract
The buyer has no obligation to the seller to conclude an insurance contract. However, the buyer is obliged to provide the seller, at his request, with the necessary information to provide additional insurance required by the buyer, as provided in paragraph A3 (b).

4.Delivery and acceptance of goods under CIP conditions

A.4.The seller is obliged to deliver the goods by transferring them to the carrier with whom the contract is concluded, in accordance with paragraph A3, on the agreed date or in the agreed period.
V.4.The buyer is obliged to take delivery of the goods as soon as they are delivered in accordance with paragraph A4, and receive them from the carrier at the named destination.

5. Transfer of risks under CIP conditions

A.5.The seller bears all risks of loss or damage to the goods until the moment of its delivery in accordance with paragraph A4, except for the risks of loss or damage in the circumstances specified in paragraph B5.
V.5.The buyer bears all risks of loss or damage to the goods from the moment of its delivery in accordance with paragraph A4.
If the buyer fails to fulfill the obligation to provide notice in accordance with paragraph B7, he bears all risks of loss or damage to the goods, starting from the agreed date or from the date when the agreed delivery period expired, provided that the goods were explicitly individualized as goods that are the subject of the contract.

6.Cost allocation under CIP conditions

A.6.The seller is obliged to pay:
  • all expenses related to the goods until the moment of its delivery in accordance with paragraph A4, except for expenses paid by the buyer, as provided for in paragraph B6;
  • With the development of the world transport system, the concept of freight has spread to air (English air freight) and land (English land freight) transport.

    " >freight
    and other expenses specified in paragraph A3 (a), including the costs of loading the goods and any charges in connection with unloading the goods at the destination, which are assigned to the seller under the contract of carriage;
  • insurance costs specified in paragraph A3 (b)
  • if necessary, the costs of performing customs formalities necessary for the export of goods, as well as duties,taxesand the fees paid upon export, as well as the costs of its transportation through any country, if they are imposed on the seller under the terms of the contract of carriage.
V.6.The buyer is obliged, subject to the provisions of paragraph A3, to pay:
  • all expenses related to the goods from the moment of their delivery in accordance with paragraph A4, except, if applicable, the costs of performing customs formalities for the export of goods, as well as taxes, fees and other expenses payable upon export, as provided in paragraph A6 (d);
  • all costs and charges related to the goods during transit prior to their arrival at the agreed destination, unless such costs and charges are attributed to the seller under the contract of carriage;
  • unloading costs, unless such costs are borne by the seller under the contract of carriage;
  • any additional costs incurred as a result of the seller's failure to send a notice in accordance with paragraph B7, from the agreed date or from the date of expiry of the agreed period for shipment, provided that the goods have been explicitly individualized as goods that are the subject of the contract;
  • if necessary, the costs of paying taxes, duties and other official fees, as well as customs formalities to be paid upon importation of the goods, and the costs of transporting it through any country, unless such costs and fees are attributed to the seller under the contract of carriage;
  • the costs of additional insurance provided at the request of the buyer, as provided in paragraphs A3 and BZ.

7.Notification to the buyer and seller under CIP conditions

A.7.The seller is obliged to give the buyer a notice that the goods have been delivered in accordance with paragraph A4.
The seller is obliged to send a notice to the buyer to enable the buyer to take such measures as are usually necessary for the buyer to receive the goods.
V.7.If the buyer has the right to determine the time for the shipment of the goods and /or the named destination or the point of receipt of the goods at this place, he is obliged to give the seller proper notice of this.

8.Documentary proof of delivery under CIP conditions

A.8.If it is generally accepted or at the request of the buyer, the seller, at his own expense, is obliged to provide the buyer with an ordinary transport document(s) in accordance with the contract of carriage concluded in accordance with paragraph A3.
The transport document must cover the goods under the contract and be dated within the agreed shipping period. If this is agreed or is generally accepted, the document should also provide the buyer with the opportunity to claim the goods from the carrier at the named destination and allow the buyer to sell the goods during transit by transferring the document to a subsequent buyer or by notifying the carrier.
If the transport document is negotiable and issued in several originals, the buyer must be given a complete set of originals.
V.8.The buyer is obliged to accept the transport document issued in accordance with paragraph A8, if it complies with the terms of the contract.

9.Inspection, packaging, labeling and inspection of goods under CIP conditions

A.9.The seller is obliged to bear all the costs associated with the inspection of the goods (quality control, measurement, weighing, counting) necessary for the delivery of the goods in accordance with paragraph A4, as well as the costs of inspecting the goods before shipment, which is prescribed by the authorities of the country of export.
The seller is obliged to ensure the packaging of the goods at his own expense, except in cases when it is usually customary in this branch of trade to ship the goods specified in the contract without packaging. The seller may pack the goods in such a way as is necessary for their transportation, unless the buyer notifies the seller of the specific packaging requirements prior to the conclusion of the contract.Markingthe packaged goods must be carried out properly.
V.9.The buyer is obliged to bear the costs of mandatory inspection of the goods before shipment, except in cases when such inspection is carried out by the order of the authorities of the country of export.

10.Assistance in obtaining information and related costs under CIP conditions

A.10.If necessary, the seller is obliged to provide the buyer in a timely manner or assist him in obtaining, at the buyer's request, at his risk and at his expense, documents and information, including security information, which the buyer may need to import the goods and/or transport them to the final destination.
The seller is obliged to reimburse the buyer for all costs and fees incurred by the buyer when receiving or assisting in obtaining documents and information, as provided in paragraph B10.
Q.10.If necessary, the seller is obliged to provide the buyer in a timely manner or assist him in obtaining, at the buyer's request, at his risk and at his expense, documents and information, including security information, which the buyer may need to import the goods and/or transport them to the final destination.
The seller is obliged to reimburse the buyer for all costs and fees incurred by the buyer when receiving or assisting in obtaining documents and information, as provided in paragraph B10.