Carriage And Insurance Paid (CIP) Definition
Carriage and Insurance Paid (CIP) is an Incoterm. It represents the situation where the seller delivers goods in his own country for transportation to the buyer in another country. Under a CIP agreement, the seller must purchase insurance against the risk borne by the buyer for the loss or damage of the goods during international transport. In this Incoterm, the seller has to perform the procedures and assume the costs of export customs clearance, but not the import clearance that corresponds to the buyer.
A Little More on Carriage and Insurance Paid
Obligations of the Seller:
- Supply the merchandise and the commercial invoice (or its equivalent electronic message) by the contract of sale, as well as any other proof of conformity that may be required by a said contract.
- Obtain, at its own risk and expense, any export license or other official authorization and carry out, when pertinent, the customs procedures for the export of the goods.
- The contract, under the usual conditions and at their own expense, the transport of the merchandise to the agreed point of destination, by the usual route and in the agreed manner.
- Obtain, at its own cost, cargo insurance as agreed in the contract, which entitles the buyer, or any other body who has an insurable interest in the merchandise, to demand straight from the insurer and give the buyer with the policy of insurance or other proof of insurance coverage.
- Deliver the merchandise to the contracted carrier or, if there are successive porters, to the first carrier, for transportation to the agreed point in the agreed place and on the date or within the agreed period.
- To bear all the risks of loss or damage of the merchandise up to the moment in which it has been given to the contracted carrier or, if there are successive porters, to the first carrier.
- Pay all expenses related to the merchandise until the moment it is delivered in accordance with the contract.
- Provide the buyer adequate notice that the goods have been delivered as agreed.
- Pay the expenses of the verification operations (quality, measurements, weight, etc.) necessary to deliver the goods in accordance with the agreement.
- Provide at their own expense the packaging required for the transport of the goods (if it is usual in the specific traffic to pack the goods in question).
- Provide, at the request, risk and expense of the buyer, the precise help to obtain, when appropriate, any document or electronic equivalent message issued or transmitted in the country of delivery and / or origin, that the buyer may require for importation of the merchandise and, if necessary, for its transit through any country.
- Provide the buyer, at his request, with the necessary information to obtain supplementary insurance.
Obligations of the Buyer
- Pay the value of the goods, as provided in the contract.
- Take, at its risk and expense, any import license or other official permission and perform, when appropriate, the customs procedures for the importation of the goods and their transit through any country.
- Receive the delivery of the merchandise when it has been delivered in accordance with the agreement.
- Bear all the risks of loss or damage of the merchandise from the moment in which it has been delivered to the contracted carrier or, if there are successive porters, to the first carrier, as agreed.
- Pay all expenses related to the merchandise from the moment it is delivered in accordance with the contract.
- When authorized to determine the time of issuing the merchandise and/or destination, give the seller sufficient notice in this regard.
- Pay the expenses of any pre-shipment inspection, except the inspection ordered by the authorities of the country of export.
References for Carriage and Insurance Paid (CIP)