CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (2024)

Table of Content

1. Introduction to CIF Risk Transfer

2. Understanding the CIF Incoterm

3. The Role of Insurance in CIF Risk Transfer

4. Who Bears the Responsibility for CIF Risk Transfer?

5. Common Mistakes in CIF Risk Transfer

6. Strategies for Successful CIF Risk Transfer

7. Legal Implications of CIF Risk Transfer

8. CIF Risk Transfer vs Other Incoterms

9. Best Practices for CIF Risk Transfer

1. Introduction to CIF Risk Transfer

When it comes to international trade, there are always risks involved. One of the most significant risks is the possibility of the goods being lost or damaged during transit. This is where CIF, or cost, insurance, and freight, comes into play. CIF is a widely used trade term that specifies which party is responsible for the goods at each point during transport. CIF transfers the risk of loss or damage from the seller to the buyer at a specific point in the supply chain. However, CIF risk transfer is often misunderstood, and many people are unsure of who bears the responsibility.

To help clear up the confusion, here is an in-depth look at CIF risk transfer:

1. CIF Definition: CIF is a trade term that refers to the cost, insurance, and freight involved in shipping goods from one location to another. The seller agrees to arrange for transportation of the goods to a specific destination, while also covering the cost of insurance and freight. CIF is typically used in international trade and applies to both ocean and inland waterway transport.

2. CIF Risk Transfer: CIF risk transfer occurs at a specific point in the supply chain, depending on the terms agreed upon by the buyer and seller. Typically, the risk transfers from the seller to the buyer when the goods are loaded onto the shipping vessel. At this point, the buyer becomes responsible for any loss or damage that occurs during transit.

3. CIF Pros and Cons: CIF has its advantages and disadvantages, depending on the perspective of the buyer and seller. For the seller, CIF offers a competitive advantage by including the cost of insurance and freight in the price of the goods. This simplifies the transaction process and allows the seller to offer a complete package to the buyer. However, the seller also has less control over the goods once they leave their possession. For the buyer, CIF offers peace of mind by ensuring that the goods are insured during transit. However, the buyer also has to bear the risk of loss or damage once the goods are loaded onto the shipping vessel.

4. CIF and Incoterms: CIF is one of the many terms included in the International Chamber of Commerce's (ICC) Incoterms. Incoterms are standardized trade terms used in international trade that specify the responsibilities of the buyer and seller. CIF is an Incoterm that specifies that the seller is responsible for the cost, insurance, and freight of the goods until they are loaded onto the shipping vessel.

Overall, CIF risk transfer is an important aspect of international trade that should not be overlooked. By understanding who bears the responsibility, both buyers and sellers can protect themselves against potential losses and ensure a smooth transaction process.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (1)

Introduction to CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

2. Understanding the CIF Incoterm

When it comes to international trade, one of the most important things to consider is the Incoterms. These are a set of standardized rules that define the responsibilities and obligations of buyers and sellers in international transactions. One of the most popular Incoterms is the CIF (Cost, Insurance, and Freight) Incoterm. CIF is used mainly for sea and inland waterway transport, and it is often preferred by buyers who want to receive goods without having to worry about transportation and insurance. In this section, we will discuss the CIF Incoterm in detail and explore who bears the responsibility for the goods during the different stages of the transaction.

1. CIF Incoterm Definition

CIF stands for "Cost, Insurance, and Freight". As the name suggests, this Incoterm covers the cost of the goods, the insurance, and the freight charges. Under CIF, the seller is responsible for arranging and paying for the transportation of the goods to the port of destination, as well as for obtaining marine insurance for the goods while they are in transit. The buyer, on the other hand, is responsible for unloading the goods at the port of destination and clearing customs.

2. CIF Incoterm Risk Transfer

Under CIF, the risk of loss or damage to the goods is transferred from the seller to the buyer when the goods pass the ship's rail at the port of shipment. This means that the seller bears the risk during transportation to the port of shipment, while the buyer bears the risk during transportation from the port of shipment to the final destination. It is important to note that the risk transfer does not mean that the responsibility for the goods is transferred as well. The seller remains responsible for the goods until they are delivered to the port of shipment, while the buyer is responsible for the goods from the port of destination onwards.

3. CIF Incoterm Insurance

Under CIF, the seller is responsible for obtaining marine insurance for the goods while they are in transit. However, the insurance only covers the minimum level of coverage required by the Institute Cargo Clauses (C) of the insurance industry. This means that the buyer may want to obtain additional insurance coverage to protect their interests in case of loss or damage to the goods during transit. It is important to note that the seller's insurance does not cover any risks associated with the buyer's country, such as war, civil unrest, or confiscation by customs.

4. CIF Incoterm Advantages and Disadvantages

The CIF Incoterm has several advantages for both buyers and sellers. For buyers, it provides a convenient way to receive goods without having to worry about transportation and insurance. For sellers, it can be an attractive option because it allows them to sell goods at a higher price than under other Incoterms. However, there are also some disadvantages to consider. For buyers, the lack of control over the transportation and insurance can be a disadvantage, as they may not be able to choose the carrier or the insurance provider. For sellers, the risk of loss or damage to the goods during transportation can be a disadvantage, as they may have to bear the cost of replacing the goods or refunding the buyer.

To illustrate the CIF Incoterm in action, let's say that a company in China wants to sell 10,000 units of a product to a company in the United States. The two companies agree to use the CIF Incoterm. The seller arranges for a freight forwarder to transport the goods from the factory in China to the port of shipment, and also obtains marine insurance for the goods. The goods are loaded onto a ship and transported to the port of destination in the United States. The buyer is responsible for unloading the goods at the port of destination and clearing customs. If the goods are lost or damaged during transportation, the seller's insurance will cover the loss up to the minimum level required by the Institute Cargo Clauses (C). However, if the loss or damage is due to a risk that is not covered by the insurance, such as war or civil unrest, the buyer may have to bear the cost of replacing the goods or refunding the seller.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (2)

Understanding the CIF Incoterm - CIF Risk Transfer: Who Bears the Responsibility

3. The Role of Insurance in CIF Risk Transfer

In any business dealing, there are risks involved, and the construction industry is no exception. The risks involved in the construction industry are many, and they can have significant consequences if not managed correctly. One of the most critical aspects of risk management in construction is risk transfer. Risk transfer involves shifting the responsibility of a risk from one party to another. In the construction industry, risk transfer is commonly used to alleviate the burden of potential losses. One of the most effective ways to transfer risk is through insurance. Insurance, in the context of CIF risk transfer, plays a critical role in mitigating the financial impact of unforeseen events.

Here are some insights on the role of insurance in CIF risk transfer:

1. Insurance companies provide financial coverage to construction companies and contractors who undertake CIF projects. This coverage can include third-party liability, property damage, and business interruption insurance.

2. Insurance companies can also provide surety bonds, which guarantee that a contractor will fulfill their contractual obligations. If the contractor fails to deliver on their promises, the surety bond will cover the costs of completing the project.

3. comprehensive insurance policies that cover multiple risks are also available to construction companies. These policies can include coverage for natural disasters, accidents, and other unforeseen events that can disrupt a CIF project.

4. The type of insurance coverage required for a CIF project depends on the specific risks involved in the project. For example, a project located in an earthquake-prone area may require additional coverage for earthquake damage.

5. Insurance companies require construction companies to adhere to strict safety protocols and risk management practices. Failure to do so can result in higher premiums or denial of coverage.

6. In some cases, insurance companies may take an active role in risk management and prevention. For example, an insurance company may offer advice on safety protocols or provide training for workers.

7. Insurance companies can also play a role in dispute resolution. If a dispute arises between the contractor and the owner, the insurance company can provide mediation services or legal representation.

Insurance plays a critical role in CIF risk transfer. It provides financial coverage for unforeseen events and helps to mitigate the financial impact of potential losses. By understanding the role of insurance in CIF risk transfer, construction companies can better manage their risks and ensure the success of their projects.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (3)

The Role of Insurance in CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

4. Who Bears the Responsibility for CIF Risk Transfer?

When it comes to CIF (Cost, Insurance, and Freight) contracts, risk transfer is a critical aspect of the agreement. It defines the responsibility for loss or damage to the goods during transit from the seller to the buyer. This is because, in CIF contracts, the seller is responsible for arranging and paying for the insurance of goods against loss or damage during shipment.

However, determining who bears the responsibility for the CIF risk transfer can be a complicated affair. Different parties involved in the transaction may have different views on this matter. Some may argue that the seller is responsible for the risk transfer, while others may contend that the buyer should assume the risk.

Here are some insights from different points of view regarding CIF risk transfer:

1. Seller's Responsibility: According to the International Chamber of Commerce (ICC), the seller is responsible for arranging and paying for the insurance of goods against loss or damage during shipment. The seller must also ensure that the goods are delivered to the port of destination and loaded onto the ship. Therefore, in CIF contracts, the seller bears the responsibility for risk transfer until the goods are loaded onto the ship.

2. Buyer's Responsibility: In some cases, the buyer may assume the risk for the goods during transit. This may happen if the contract explicitly states that the buyer is responsible for arranging and paying for the insurance of goods during shipment. In such cases, the buyer must ensure that the insurance policy covers all risks associated with the goods' transport.

3. Shared Responsibility: In some cases, the parties may agree to share the responsibility for the CIF risk transfer. This may be done by splitting the insurance premium or by agreeing to a specific arrangement that outlines the responsibilities of each party.

To sum up, CIF risk transfer is a complex issue that requires careful consideration by all parties involved in the transaction. It is important to understand who bears the responsibility for the risk transfer, as this can have significant implications for the buyer or seller. For instance, if the seller assumes the risk, they may need to pay a higher insurance premium to cover the goods' value during shipment. Conversely, if the buyer assumes the risk, they may need to pay a lower insurance premium, but they will be responsible for any loss or damage that occurs during transit.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (4)

Who Bears the Responsibility for CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

5. Common Mistakes in CIF Risk Transfer

When it comes to CIF Risk Transfer, there are many common mistakes that can occur. These mistakes can be costly and can lead to disputes between the parties involved. It is important to understand the risks involved and to take the necessary steps to ensure that the CIF Risk Transfer is carried out correctly.

One common mistake that often occurs is a lack of clarity in the contract between the buyer and the seller. The contract should clearly state who is responsible for the goods at each stage of the supply chain. This includes during transportation and any storage that may be necessary. If there is no clear delineation of responsibility, it can lead to disputes later on.

Another mistake is assuming that the carrier is responsible for the goods during transportation. While it is true that the carrier has a responsibility to take care of the goods, this responsibility is limited. The carrier is only responsible for loss or damage that occurs due to their own negligence. If the goods are damaged due to other factors, such as weather or improper packaging, the carrier may not be liable.

A third mistake is failing to properly document the condition of the goods at each stage of the supply chain. This documentation is important because it provides evidence of who is responsible for any damage that may occur. Without proper documentation, it can be difficult to determine who is responsible for any loss or damage that may occur.

To ensure that CIF Risk Transfer is carried out correctly, it is important to take the following steps:

1. Clearly define the responsibilities of each party in the contract.

2. Ensure that the carrier is properly licensed and insured.

3. Inspect the goods at each stage of the supply chain and document their condition.

4. Use proper packaging and labeling to prevent damage during transportation.

5. Consider purchasing additional insurance to cover any potential loss or damage.

For example, if a seller is shipping a fragile item to a buyer using CIF Incoterms, it is important to properly pack the item to avoid damage during transportation. The seller should also document the condition of the item before it is shipped. If the item arrives at the buyer's location damaged, the seller can use the documentation to prove that the damage occurred during transportation and not due to their own negligence.

By taking these steps, it is possible to avoid common mistakes and ensure that CIF Risk Transfer is carried out correctly. This can help to prevent disputes and ensure that both parties are satisfied with the outcome.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (5)

Common Mistakes in CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

6. Strategies for Successful CIF Risk Transfer

When it comes to CIF risk transfer, it is crucial to have a clear understanding of the responsibilities and strategies involved. There are different points of view regarding this matter, with some arguing that the buyer should take the lead while others believe that the seller should bear the responsibility. Regardless of where you stand, there are several strategies that can enable successful CIF risk transfer. In this section, well explore some of these strategies in depth.

1. Clear Communication: Communication is key when it comes to CIF risk transfer. Both the buyer and seller need to be clear about their responsibilities and expectations to avoid any misunderstandings. This includes outlining the terms of the contract, the point of transfer, and the documentation required.

2. adequate Insurance coverage: Another essential strategy for successful CIF risk transfer is to ensure that there is adequate insurance coverage. This can help to mitigate potential losses in case of damage or loss of goods during transit. It is important to review the insurance policies carefully to ensure that they meet the necessary requirements and cover the specific risks involved.

3. Proper Packaging and Labeling: Proper packaging and labeling are also critical for successful CIF risk transfer. The seller needs to ensure that the goods are packaged securely and labeled correctly to avoid any damage during transit. This includes using appropriate materials and labeling the packages with the necessary information, such as the contents, destination, and handling instructions.

4. Compliance with Regulations: Compliance with relevant regulations is also essential for successful CIF risk transfer. Both the buyer and seller need to be aware of the regulations that apply to the goods being shipped, including any import and export restrictions. Failure to comply with these regulations can result in delays, fines, or even the confiscation of goods.

5. Timely Documentation: Finally, timely documentation is crucial for successful CIF risk transfer. The buyer needs to ensure that all necessary documentation is provided on time to avoid delays in the shipment. This includes documents such as the bill of lading, commercial invoice, and packing list. The seller needs to ensure that these documents are accurate and complete to avoid any issues during customs clearance.

In summary, successful CIF risk transfer requires clear communication, adequate insurance coverage, proper packaging and labeling, compliance with regulations, and timely documentation. By implementing these strategies, both the buyer and seller can ensure a smooth and successful transaction.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (6)

Strategies for Successful CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

7. Legal Implications of CIF Risk Transfer

The transfer of risks and responsibilities in international trade is an essential aspect of the business. As a result, Incoterms have been established to define the roles and responsibilities of buyers and sellers in the transaction. CIF (Cost, Insurance, and Freight) is an Incoterm that is commonly utilized in international trade. CIF is a type of delivery agreement where the seller is responsible for delivering the goods to the port of destination, covering the cost of insurance, and paying for the freight. However, the transfer of risk under CIF is a complex issue that requires careful consideration. It is essential to understand the legal implications of CIF risk transfer to avoid disputes that may arise during the transaction.

Here are some key factors to consider when analyzing the legal implications of CIF risk transfer:

1. Risk of loss or damage: CIF requires the seller to bear the risk of loss or damage of the goods until they are loaded onto the ship. However, once the goods are loaded, the risk transfers to the buyer. For example, if the goods are damaged during transit, the buyer may be responsible for filing an insurance claim if the seller has not provided adequate insurance coverage.

2. Insurance coverage: The seller is required to provide insurance coverage for the goods until they are loaded onto the ship. However, the insurance coverage is often limited, and the buyer may need to obtain additional insurance to cover the risk of loss or damage during transit.

3. Compliance with shipping regulations: CIF requires the seller to comply with all shipping regulations and obtain any necessary licenses or permits. However, the buyer is responsible for obtaining any licenses or permits required for the import of the goods.

4. Payment of duties and taxes: CIF requires the seller to pay for the freight and insurance, but the buyer is responsible for paying any duties and taxes associated with the import of the goods. The buyer should be aware of any duties or taxes that may apply to the goods and factor these costs into the overall transaction.

5. Dispute resolution: CIF risk transfer can be a complex issue that may lead to disputes between the buyer and seller. It is essential to have a clear understanding of the terms of the agreement and to have a dispute resolution mechanism in place to resolve any disputes that may arise.

CIF risk transfer is a complex issue that requires careful consideration. It is essential to understand the legal implications of CIF risk transfer to avoid disputes that may arise during the transaction. By considering the factors outlined above, buyers and sellers can ensure a successful transaction that meets the needs of both parties.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (7)

Legal Implications of CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

8. CIF Risk Transfer vs Other Incoterms

When it comes to international trade, there are a number of incoterms that may be used to define a buyer's and seller's responsibilities. One of these incoterms is the Cost, Insurance and Freight (CIF) term. CIF is commonly used in international trade, and it is important to understand how it differs from other incoterms. The CIF term is often used in the sale of goods between a buyer and a seller in different countries. Under CIF, the seller is responsible for delivering the goods to a port of shipment, as well as for obtaining and paying for transport and insurance for the goods until they arrive at the port of destination. Once the goods have arrived at the port of destination, the buyer is responsible for arranging and paying for onward transport.

1. CIF and FOB

CIF is often compared to Free on Board (FOB), which is another common incoterm. Under FOB, the seller is responsible for delivering the goods to the port of shipment, but the buyer is responsible for arranging and paying for transport and insurance from that point onwards. FOB is often used when the buyer has more knowledge of the transport market and can obtain more favorable rates than the seller.

2. CIF and EXW

Another incoterm that is often compared to CIF is Ex Works (EXW). Under EXW, the seller is only responsible for making the goods available at their premises, and the buyer is responsible for all other aspects of the shipment, including transport and insurance. EXW is often used when the buyer has more knowledge of the transport market, or when the goods are being shipped by a third party.

3. CIF and CFR

CIF is also closely related to Cost and Freight (CFR). Under CFR, the seller is responsible for delivering the goods to the port of shipment and arranging and paying for transport to the port of destination. However, the buyer is responsible for arranging and paying for insurance from the port of shipment onwards. CFR is often used when the buyer has more knowledge of the insurance market and can obtain more favorable rates than the seller.

4. CIF and Risk

Under CIF, the seller bears the risk of damage or loss of the goods until they are delivered to the port of destination. However, once the goods have been delivered to the port of destination, the risk passes to the buyer. This means that if the goods are damaged or lost during transport from the port of destination onwards, it is the buyer's responsibility to bear the cost. Therefore, it is important for buyers to ensure that they have adequate insurance coverage in place.

CIF is a widely used incoterm in international trade. It is important to understand how it differs from other incoterms, such as FOB, EXW, and CFR, in order to make informed decisions when buying or selling goods internationally. As with any incoterm, it is important to carefully consider the risks and responsibilities involved, and to ensure that appropriate insurance coverage is in place.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (8)

CIF Risk Transfer vs Other Incoterms - CIF Risk Transfer: Who Bears the Responsibility

9. Best Practices for CIF Risk Transfer

As we've seen throughout this discussion, CIF risk transfer can be a complicated issue, with different parties holding varying degrees of responsibility. However, there are some best practices that can help ensure a smooth transfer of risk and avoid any potential disputes or misunderstandings.

1. Clearly define responsibilities in the contract: One of the most important steps in CIF risk transfer is to make sure that all parties understand their roles and responsibilities. This should be clearly outlined in the contract, with specific language that details who is responsible for each step of the process.

2. Use appropriate Incoterms: Incoterms are standardized terms used in international trade that define the responsibilities of the buyer and seller. Choosing the right Incoterm can help ensure that risk transfer is handled appropriately and that all parties are aware of their obligations.

3. Insure against risk: While risk transfer is an important part of CIF transactions, it's also important to have appropriate insurance in place to protect against any potential losses or damages. This can include marine insurance, cargo insurance, and other types of coverage.

4. Choose reliable partners: When it comes to CIF transactions, choosing the right partners is key. This includes not only the buyer and seller, but also any intermediaries involved in the process, such as freight forwarders or customs brokers. Working with reliable and reputable partners can help ensure that risk transfer is handled appropriately and that the transaction goes smoothly.

5. Communicate effectively: Finally, effective communication is essential for successful CIF risk transfer. All parties involved should be kept up-to-date on the status of the transaction, including any potential issues or delays. This can help prevent misunderstandings and ensure that everyone is on the same page.

For example, let's say that a buyer in the United States is purchasing goods from a seller in China, with the CIF Incoterm. The contract should clearly define the responsibilities of each party, with specific language outlining when risk transfers from the seller to the buyer. The buyer should also ensure that appropriate insurance coverage is in place to protect against any potential losses or damages during transit. Finally, effective communication between the buyer, seller, and any intermediaries involved in the process can help ensure a smooth transfer of risk and a successful transaction overall.

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (9)

Best Practices for CIF Risk Transfer - CIF Risk Transfer: Who Bears the Responsibility

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CIF Risk Transfer: Who Bears the Responsibility - FasterCapital (2024)

FAQs

CIF Risk Transfer: Who Bears the Responsibility - FasterCapital? ›

Under CIF, the seller bears the risk of damage or loss of the goods until they are delivered to the port of destination. However, once the goods have been delivered to the port of destination, the risk passes to the buyer.

Who bears the risk under a risk transfer agreement? ›

This is a voluntary arrangement between two parties, the insurance company and the policyholder, where the insurance company assumes strictly defined financial risks from the policyholder. In very simple terms, if a worker is injured, the insurance company pays the cost.

Who bears risk in CIF Incoterms? ›

CIF means that the seller is responsible for the costs of transporting the cargo and obtaining insurance to protect the buyer from any damages to the goods during transport. However, the buyer assumes responsibility for the goods once the cargo has reached the buyer's port.

What is the transfer risk of CIF? ›

With CIF, risk is transferred only when the goods are loaded on board the ship at origin. This makes CIF unsuitable for containerized cargo, which is usually dropped off at terminal days prior to loading. This creates a grey area during which cargo could unknowingly suffer damages.

Who pays the duty in CIF? ›

When exporting under CIF Incoterms, ownership passes to the buyer after the cargo is securely loaded on the boat, but the seller is responsible for paying duty and obtaining shipping insurance. This means that the seller is responsible for all shipping costs until the goods reach the target port.

Who bears the risk in a contract? ›

In a destination contract, the risk of loss passes to the buyer when the goods are delivered to the buyer at the location specified in the contract. If the goods are lost, stolen, or destroyed in transit as before, the seller bears the risk of loss.

What happens under a risk transfer agreement? ›

- Risk transfer takes place where an insurer lets a broker hold insurance monies on its behalf and by doing so transfers the 'credit risk' from the broker to the insurer. - Monies held under this arrangement by the broker are referred to as 'risk transfer money'.

Who bears the risk in consignment? ›

Consignment: The consignor bears the risk of items under consignment. Sales: The risk is shifted to the buyer when a sale is made. As soon as the products are sold, the risk of the goods is shifted to the buyer.

What are the risks of CIF Incoterms? ›

Under CIF, the seller bears the risk of loss or damage to the goods until they are delivered at the port to the first carrier. However, once the goods are delivered and unloaded at the port, the buyer assumes all risks.

What are the Incoterms rule for CIF? ›

Under CIF, the seller must arrange (or procure in the case of a string-sale) a contract for the carriage of the goods from the agreed point of delivery in A2 to the named port of destination or, if agreed, to any point (quay or wharf) in that port.

What is the CIF transfer rule? ›

Simply stated, the Athletic Eligibility Transfer rule states: “Any student who transfers from one high school to another for any reason is ineligible for Varsity competition for one year from the date of enrollment at the new school in any sport that the student played at ANY level in the previous twelve months.

What is the difference between CIF and FOB risk transfer? ›

In a nutshell, the major difference between FOB and CIF is in transference of liability and ownership. With FOB, title possession and liability usually shift when the shipment leaves the point of origin. With CIF, responsibility moves to the buyer once the goods reach the point of destination.

Who is the buyer responsible for in CIF? ›

The buyer's responsibilities in a CIF arrangement typically begin once the goods arrive at the agreed-upon port of destination. This includes handling customs clearance, paying import duties and taxes, and any additional costs associated with unloading the goods from the arriving vessel.

What is the sellers responsibility under CIF? ›

Under CIF (short for “Cost, Insurance and Freight”), the seller delivers the goods, cleared for export, onboard the vessel at the port of shipment, pays for the transport of the goods to the port of destination, and also obtains and pays for minimum insurance coverage on the goods through their journey to the named ...

Who clears customs for CIF? ›

No, it's the buyer's responsibility. CIF does not include any import duties, VAT, or taxes. It does include all export requirements. Under CIF, the seller must export and pay the costs to ship to your destination port, but you must import and pay all costs associated with the importation.

Who is responsible for duty fees? ›

Importing Process Paying Duty: The importer is ultimately responsible for paying any duty owed on an import. Determining duty can be very complicated, and while shipping services will often give an estimate for what the duty rate on an item might be, only CBP can make a final determination about what is owed.

Who has the authority to bind risks? ›

Binding authority is the authority given to an insurance agent or broker to make an immediate decision on behalf of an insurer to provide coverage to a customer. It allows agents to issue policies on behalf of the insurance company without having to wait for approval from underwriters.

Who is responsible for risk acceptance? ›

You have to make sure there's an understanding that the people who are involved in the organization understand who is responsible for risk acceptance,” Stanley says. “Those could be business executives of the business units, but not the CISO. The CISO is responsible for security of the organization.

How does risk transfer work? ›

Risk transfer is a common risk management technique where the potential loss from an adverse outcome faced by an individual or entity is shifted to a third party. To compensate the third party for bearing the risk, the individual or entity will generally provide the third party with periodic payments.

Who bears counterparty risk? ›

Lenders and investors are each exposed to a degree of counterparty risk. If one party is determined to have a higher level of risk, that party will typically have to pay a risk premium to compensate the other party.

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Introduction: My name is Reed Wilderman, I am a faithful, bright, lucky, adventurous, lively, rich, vast person who loves writing and wants to share my knowledge and understanding with you.