• CARRIAGE AND INSURANCE PAID TO [... named place of destination]
  • COST AND INSURANCE PAID TO [... name of destination]
This term may be used irrespective of the chosen mode of transport and by using more than one mode of transport.
CIP-Incoterms-2010-VINCULUM- Customs clearance Vladivostok-GK-IMPORT40Factory or warehouse manufacturer or sellerDelivery from the factory or warehouse to the departure terminalPlacement of goods on the cargo terminalPlacing goods on boardState borderSea transportation to the port of dischargeAccommodation at the temporary storage at the port of arrival (unloading)Delivery of goods ready for unloading from the vehicleConsignee WarehouseSeller’s cost and responsibility area for CIPThe cost zone and the responsibility of the buyer when CIPMoment of risk transfer when CIP!

Carriage and Insurance Paid to (Cost and insurance paid to) means that the seller transmits product to the carrier or other person nominated by the seller in the agreed place (if such a place is agreed by the parties) and that the seller is obliged to enter into 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 minimum coverage, covering the risk of loss or damage to the goods during transportation. If the buyer wants to have more protection through insurance, he must either clearly coordinate this with the seller or carry out additional insurance at his own expense.

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

This term has two critical points, as the risk and expense go into two different places. Parties are encouraged to most accurately as possible to determine in the contract the place of delivery of goods, in which the risk passes to the buyer, as well as a named place of destination to which the seller is obliged to conclude a contract of carriage.

If several carriers are used to transport goods in the agreed direction and if the specific delivery point is not agreed by the parties, the disadvantage is that the risk passes when the goods are transferred to the first carrier at a point whose choice depends entirely on the seller and which is beyond the buyer's control. HIn order for the transfer of risk to take place at a later stage (i.e. at the seaport or at the airport), this must be specified in the contract.

Parties are also encouraged by the possibility of more accurately determine the point at the agreed place of destination, as the costs to this point is the seller. Seller recommended that contracts of carriage, which accurately reflect this choice. If the seller is in his contract of carriage bears the costs of discharge at the agreed place of destination, the seller is not entitled to claim compensation from the purchaser of such costs, unless otherwise agreed by the parties.

Terms CIP requires the seller to perform customs formalities for export, if applicable. However, the seller is not obliged to carry out customs formalities for importation, pay import duties or perform other customs formalities upon importation.

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

 

Learn what you need to consider and take when choosing CIP Close the list of actions for CIP
  • to clarify in detail the parameters and characteristics of the packages (including labeling), this is necessary for the subsequent customs clearance of goods;
  • clearly coordinate with the seller the port of delivery of the goods;
  • determine in the contract the place of transfer of the goods to the carrier, since the seller fulfills his obligations for delivery when he transfers the goods to the carrier;
  • agree with the insurance company the terms of the increased insurance, if necessary (according to CIP the seller must provide insurance only with minimal coverage);
  • obtain permits, if necessary;
  • pay customs charges for importing 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 logisticians 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 charges at the port of arrival and this increases the total cost, it is also not recommended to use this term if cargo It is planned to ship further across Russia in container trains.

 

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

A.1.The seller is obliged, in accordance with the contract of sale, to provide the buyer with the goods, the commercial invoiceinvoice, 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 agreed by the parties or is common.
V.1. The buyer must pay the price of the goods, as provided for in the contract of sale.
Any document referred to in paragraphs B1-B10 may be an equivalent electronic record or other procedure, if agreed by the parties or is common.

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

A.2.If required, the seller must, at his own expense and risk, to obtain an export license or other official authorization and carry out all customs formalities necessary for the export of goods and their transport through any country.
V.2.If required, the buyer must obtain at his own expense and risk import license or other official authorization and carry out all customs formalities for the import of goods and its transportation through any country.

3. Contracts of carriage and insurance under conditions CIP

A.3.a) Contract of carriage
The seller must contract or procure the conclusion of the contract of carriage of goods from a named point of delivery, if it is defined, or by delivery to the named place of destination or, if agreed, to any point in such a place.
The contract of carriage must be made on usual terms at the seller's expense and provide for carriage by generally accepted direction and the normal way. If a specific point is not agreed or can not be determined on the basis of practice, the seller may select the point of delivery or at the agreed point of destination which best suits his purpose. 
b) Contract of insurance
The seller is obliged, at his own expense, to insure the goods corresponding to at least the minimum coverage as provided for in clause "C"Institutional Cargo Clause (LMA / IUA) or other similar conditions. The insurance contract must be entered into with a reputable insurer or insurance company and give the buyer or any person with an insured interest in the product the right to claim directly to the insurer.
At the request of the buyer the seller is obliged, provided that the buyer the necessary information required by the seller to carry the buyer's expense such additional insurance, which may be obtained for example as provided by paragraph "A" or "B" Institutskaya terms of cargo insurance (LMA / IUA) or other similar conditions, and / or coating the corresponding Institutsky terms of military action, and / or university conditions (LMA / IUA) strikes or other similar conditions.
Insurance should cover a minimum stipulated in the sales contract price plus 10% (ie 110%) and carried out in the currency of the contract of purchase - sale.
Insurance must provide the goods, starting from the point of delivery, as provided in paragraphs A4 and A5 and, at least to a named destination.
The seller must provide the buyer with the insurance policy or other evidence of insurance cover.
In addition, the seller must provide the buyer at the buyer's request, at his risk and expense information that may be required to the buyer to provide additional security.
V.3.a) Contract of carriage
The buyer has no obligation to the seller to conclude a contract of carriage.
b) Contract of insurance
The buyer has no obligation to the seller to conclude a contract of insurance. However, the buyer must provide the seller, at his request, the necessary information to provide additional insurance required by the buyer, as provided for in paragraph A3 b).

4. Delivery and acceptance of goods under conditions CIP

A.4.The seller must deliver the goods by transferring it to the carrier with whom a contract in accordance with paragraph A3 on the date or within the agreed period.
V.4.The buyer must take delivery of the goods as soon as they have been delivered in accordance with paragraph A4, and receive them from the carrier at the named place of destination.

5. Transfer of risks under conditions CIP

A.5.Seller shall bear all loss or damage to the goods until it is delivered in accordance with paragraph A4, with the exception of the risks of loss or damage in the circumstances referred to in paragraph B5.
V.5.The buyer bears all risks of loss or damage to the goods from the moment of delivery in accordance with paragraph A4.
At default by the buyer obligations to provide notification in accordance with paragraph B7, he shall bear all risks of loss or damage to the goods from the agreed date or the date on which expired the agreed delivery period, provided that the goods were explicitly individualized as a commodity, which is the subject agreement.

6 Allocation of costs under conditions CIP

A.6.The seller must pay:
  • all expenses related to the goods until the time of their delivery in accordance with paragraph А4, with the exception of expenses paid by the buyer, as provided for in paragraph Б6;
  • freight and other expenses specified in clause A3 a), including the costs of loading the goods and any fees in connection with unloading the goods at destination, which are imposed on the seller under the contract of carriage;
  • insurance costs specified in paragraph A3 b)
  • if necessary, the cost of the customs formalities required for the export of goods, as well as duties, taxes and fees paid upon export, as well as the costs of its transportation through any country, if they are charged to the seller under the terms of the contract of carriage.
V.6.The buyer must, subject to the provisions of paragraph A3, pay:
  • all expenses related to the goods from the moment of their delivery in accordance with paragraph А4, except, if applicable, the cost of customs formalities for the export of goods, as well as taxes, fees and other expenses payable during export, as provided for in paragraph А6 d);
  • all costs and charges relating to the goods during transit prior to their arrival at the agreed destination, unless such costs and charges are not applicable to the seller under the contract of carriage;
  • the cost of unloading, unless such costs do not relate to the seller under the contract of carriage;
  • any additional costs incurred due to the seller’s failure to send the notice in accordance with paragraph 7, from the agreed date or from the date of expiration of the agreed period for shipment, provided that the goods were explicitly individualized as goods subject to the contract;
  • if necessary, the cost of paying taxes, duties and other official charges, as well as the implementation of customs formalities payable when importing goods, and the cost of transporting it through any country, unless such costs and charges are not attributed to the seller on the contract of carriage;
  • costs of additional insurance, provided at the request of the buyer, as provided in paragraphs A3 and GZ.

7.Notification to buyer and seller under conditions CIP

A.7.The seller must give the buyer notice that the goods have been delivered in accordance with paragraph A4.
The seller must give the buyer a notice to provide the customer the possibility of adopting such measures, which are usually needed to get the goods by the buyer.
V.7.If the buyer is entitled to determine the time for shipment and / or a named destination or point of receipt of goods in this place, he must account to the seller due notice thereof.

8.Documentary proof of delivery under conditions CIP

A.8.If it is customary or requested by the buyer, the seller, at his own expense, must provide the buyer with the usual transport document (-s) in accordance with the contract of carriage in accordance with paragraph A3.
The transport document shall include the goods under the contract and be dated within the agreed period of shipment. If it is agreed or is customary, the document should also provide the buyer to claim the goods from the carrier at the named place of destination and allow the buyer to sell the goods in transit time by sending the document to a subsequent buyer or by notification to the carrier.
If the transport document is negotiable and issued in several originals, a buyer must be a full set of originals.
V.8.The buyer must accept the transport document issued in accordance with paragraph A8 if it complies with the conditions of the contract.

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

A.9.The seller must pay all costs associated with checking (checking quality, measuring, weighing, counting) which are necessary for the delivery of goods in accordance with paragraph A4, as well as the costs of inspection of goods before shipment, which is prescribed by the authorities of the exporting country.
The seller must, at his own expense, ensure the packing of the goods, unless it is customary in the industry to ship the goods specified in the contract in unpacked packaging. The seller may pack the goods in such a way as is necessary for his transportation, unless the buyer informs the seller about the specific packaging requirements before entering into the contract. Marking packaged goods must be properly implemented.
V.9.The buyer must pay the costs for the mandatory inspection of goods prior to shipment, except when such inspection is carried out by order of the authorities of the exporting country.

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

A.10.If need be, the seller is obliged to provide the purchaser or to assist him in obtaining, at the request of the buyer, at his risk and expense, documents and information, including important safety information, which may require the buyer to the goods import and / or transport it to the final destination.
The seller is obliged to compensate the buyer for all costs and charges incurred by the buyer in obtaining or assisting in obtaining documents and information as provided for in paragraph B10.
V.10.If need be, the seller is obliged to provide the purchaser or to assist him in obtaining, at the request of the buyer, at his risk and expense, documents and information, including important safety information, which may require the buyer to the goods import and / or transport it to the final destination.
The seller is obliged to compensate the buyer for all costs and charges incurred by the buyer in obtaining or assisting in obtaining documents and information as provided for in paragraph B10.
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