How the term CIP is used in international trade

I. Introduction of CIP terminology

       The term CIP means "freight and insurance paid to (...Named destination)

 

       CIP means that the seller delivers the goods to the carrier named by the seller, but the seller must also pay the freight to the destination of the goods, CIP means that the buyer bears all the risks and additional costs of the seller after delivery。However, in CIP terms, the seller must also insure the buyer against the risk of loss or damage to the goods in transit。It is therefore up to the seller to conclude the insurance contract and pay the premium。

 

       The Buyer should note that the CIP term requires the seller to cover only a minimum amount of insurance coverage。If the buyer needs a higher insurance coverage, it will need to explicitly agree with the seller or make additional insurance arrangements on its own。

 

       "Carrier" means any person who, in a contract of carriage, undertakes to perform carriage by rail, road, air, sea, inland waterway or a combination thereof, or to be performed by another person。

 

       If the receiving carrier is also used to carry the goods to the agreed destination, the risk passes when the goods are delivered to the first carrier。

 

       The CIP term requires the seller to clear the export customs。

 

       The term can be applied to various modes of transport, including multimodal transport。

 

       A Seller's obligations

 

       B Buyer's Obligations

 

       A1 Supply the goods in accordance with the contract

 

       The Seller must provide the goods in conformity with the Contract of Sale and the commercial invoice or equivalent electronic message, as well as any other proof of conformity that may be required by the contract。

 

       B1 Payment of price

 

       The buyer must pay the price in accordance with the sales contract。

 

       A2 Permits, other permits and procedures

 

       The seller must, at his own risk and expense, obtain any export license or other official permission and, where necessary, complete all customs formalities necessary for the export of the goods。

 

       B2 Licenses, other permits and procedures

 

       The buyer must, at his own risk and expense, obtain any import licence or other official permission and, where necessary, complete all customs formalities necessary for the importation of the goods and for their transit from another country。

 

       A3 Contracts of carriage and insurance

 

       a) Contract of carriage

 

       The seller must, at his own expense, conclude the contract of carriage on the usual terms and conditions, transporting the goods to the agreed point of destination in accordance with the usual route and customary method。If the point of delivery is not agreed or cannot be determined by custom, the seller may select the point of delivery at the specified destination that best suits its purpose。

 

       b) Insurance contract

 

       The seller must obtain insurance for the goods at his own cost and provide the Buyer with the insurance policy or other evidence of insurance in accordance with the contract so as to entitle the Buyer or any other person with an insurable interest in the goods to claim directly against the insurer。The contract of insurance shall be concluded with a reputable underwriter or insurance company and, in the absence of an express agreement to the contrary, shall be covered in accordance with the best extent of the risks in the Institute of Cargo Insurance Clauses (the Institute of London Underwriters) or other similar clauses。The term of insurance shall be stipulated in B5 and B4。The Seller shall, at the Buyer's request and at the Buyer's expense, take out additional insurance against war, strike, riot and civil unrest, if available。The minimum insurance amount shall include the price specified in the contract plus 10% (i.e. 110%) and shall be in the contract currency。

 

       B3 Transport contract and insurance contract

 

       a) Contract of carriage: no obligation。

 

       b) Insurance contract: no obligation。

 

       A4 delivery

 

       The Seller must deliver the goods on the agreed date or period to the carrier contracted in accordance with A3 or, if there is a receiving carrier, to the first carrier to enable the goods to be delivered to the agreed point of destination。

 

       B4 Take delivery of goods

 

       The buyer must take delivery of the goods upon delivery by the Seller in accordance with A4 and receive the goods from the carrier at the named destination。

 

       A5 Risk transfer

 

       Subject to the provisions of B5, the Seller shall bear all risks of loss of or damage to the goods until such time as they have been complied with

 

       A4 says until delivery。

 

       B5 Risk transfer

 

       The Buyer shall bear all risks of loss of or damage to the goods after delivery in accordance with A4。If the Buyer fails to notify the Seller in accordance with B7, he shall bear all risks of loss of or damage to the goods from the agreed delivery date or the expiry of the delivery period, provided that the goods have been duly assigned to the contract, that is, clearly delineated or otherwise identified as the goods under the Contract。

 

       A6 Cost division

 

       Except as specified in B6，The seller must pay the costs associated with the goods，Until delivery has been made in accordance with A4，And freight and all other expenses incurred in accordance with A3a)，Including loading charges and discharging charges at the destination payable by the seller under the contract of carriage;And insurance costs incurred in accordance with A3b);And when customs formalities are required，Customs fees required for the export of goods，And all duties, taxes and other charges payable when the goods are exported，And the cost of transit of the goods from another country paid by the seller under the contract of carriage。

 

       B6 Cost division

 

       Except as provided in A3，The buyer must pay all expenses in connection with the goods from the time of delivery in accordance with A4;And all expenses incurred in transit until the goods arrive at the agreed destination，Unless such charges shall be paid by the Seller under the contract of carriage;Landing charge，Unless such charges shall be paid by the Seller under the contract of carriage;And if the Buyer fails to give notice to the Seller in accordance with B7，From the agreed date of shipment or the expiry date of the shipment period，All additional costs incurred for the goods，However, the goods have been duly assigned to the contract，To the extent that they are clearly marked out or otherwise identified as the goods under the contract;And when customs formalities are required，All duties, taxes and other charges payable on the importation of goods，And customs fees，And the cost of transit from another country，Unless these costs have been included in the contract of carriage。

 

       A7 Notify the buyer

 

       The Seller must give the Buyer sufficient notice that the goods have been delivered in accordance with A4 and any other notice required to enable the Buyer to take such steps as are normally necessary to take delivery of the goods。

 

       B7 Notify the seller

 

       Once the Buyer has the right to decide the time and/or destination of the goods to be shipped, the Buyer must give the Seller adequate notice to this effect。

 

       A8 Delivery documents, transport documents or equivalent electronic messages

 

       The Seller must, at his own expense (if customary) furnish the Buyer with the usual transport documents (e.g. negotiable bills of lading, non-negotiable sea waybills, inland waterway documents, air waybills, rail waybills, road waybills or multimodal transport documents) to which the contract of carriage under A3 is subject.。

 

       If the buyer and seller agree to communicate electronically, the documents referred to in the preceding paragraph may be replaced by an electronic data interchange (EDI) message that has the same function。

 

       B8 Delivery certificate, transport document or equivalent electronic message

 

       The Buyer must accept the transport document provided in accordance with A8 if it complies with the contract。

 

       A9 Check, pack and mark

 

       The Seller must pay the costs of checking (e.g. checking the quality of the goods, measuring, weighing, counting) necessary for delivery in accordance with A4.。

 

       The Seller must, at his own cost, provide such packing as is required for the carriage he has arranged (unless the goods described in this contract are shipped without packing in accordance with relevant industry practice)。Packages should be properly marked。

 

       B9 Goods inspection

 

       The buyer must pay the cost of any pre-shipment inspection, except for inspections mandated by the relevant authorities of the exporting country。

 

       A10 Other obligations

 

       At Buyer's request and at Buyer's risk and expense，The seller must render every assistance to the buyer，To assist the Buyer in obtaining any documents or equivalent electronic messages (other than those listed in A8) issued or transmitted by the country of shipment and/or the country of origin that the Buyer can request for the import of the goods and for transit from another country。

 

       B10 Other obligations

 

       The Buyer must pay all costs incurred in obtaining documents or equivalent electronic messages referred to in A10 and reimburse the Seller for the costs incurred in providing assistance。

 

       At the request of the Seller, the buyer must provide the Seller with the information necessary to apply for the insurance。