Learning more about Incoterms®2010

Cost Insurance and Freight
or CIF (named port of
destination) Incoterms®2010
is the final of the eleven
Incoterms (it is always
plural) for the class “Rules
for Sea and Inland Waterway
Transport”. According to
the International Chamber
of Commerce (ICC),
in “the second class of
Incoterms®2010 rules, the
point of delivery and the place
to which the goods are carried
to the buyer are both ports,
hence the label ‘sea and inland
waterway’ rules”.
The ICC’s Incoterms ®2010
identifies ten obligations that
the seller may need to fulfil
in terms of CIF: (1) general
obligations of the seller;
(2) licences, authorisations,
security clearances and other
formalities; (3) contracts
of carriage and insurance;
(4) delivery; (5) transfer of
risks; (6) allocation of costs;
(7) notices to the buyer;
(8) delivery document; (9)
checking – packaging –
marking; and (10) assistance
with information and
related costs.
The general obligations
of the seller are essentially
the provision of goods and
the commercial invoice in
conformity with the contract
of sale, which implies that
the documents stipulated in
the contract of sale must be
provided.
In respect of the licences,
authorisations, security
clearances and formalities the
seller must obtain these at his
own risk and expense, and
also carry out the customs
formalities necessary for the
export of the goods.
With respect to the contract
of carriage, the seller must
contract or procure a contract
for the carriage of the goods
from the agreed point of
delivery to the named port
of destination, or if agreed,
any other point. As for the
contract of insurance, the
seller must obtain this at his/
her expense cargo insurance.
As for the delivery to be
effected, the seller must
place the goods on board the
vessel or procure the goods so
delivered. The seller bears all
risks of loss of or damage to
the goods until they have been
delivered.
As for the allocation of
costs, the seller must pay all
costs until the goods have
been delivered, as well as the
freight and all other costs, and
the cost of insurance.
The seller must notify the
buyer in order to allow the
buyer to take delivery of
the goods. The seller must
provide the buyer with the
usual transport document.
With respect to the
checking – packaging –
marking, the seller must pay
the costs of the necessary
checking required ie, quality,
etc, as well as the costs of
any pre-shipment inspection
mandated by the authority in
the country of origin.
As for the assistance
with information (including
security-related information)
and related costs, this would
be for the seller’s account.