Trade Terms: CIP - Carriage and Insurance Paid To

This term may be applied to any mode or modes of transport. "Carriage and Insurance Paid To" means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between the parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. The seller also must contract for insurance coverage against the buyer's risk of loss of or damage to the goods during the carriage. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements. Under CPT, CIP, CFR, and CIF, the seller fulfills its obligation to deliver when it hands the goods over to the carrier and not when the goods reach the place of destination. Since risk transfers and costs are incurred at different places, this rule contains two critical points. The parties are best advised to identify as precisely as possible in the contract the point of delivery, the point at which risk passes to the buyer, and the named place of destination to which the seller must contract for carriage. If several carriers are used for the carriage to the agreed destination and the parties do not agree on a specific point of delivery, the default position is that risk transfers when the goods have been handed over to the first carrier at a point entirely of the seller's choosing and over which the buyer has no control. Should the parties wish risk to transfer at a later stage (e.g., at a seaport or an airport), they need to specify this in their contract of sale. The costs of carriage to the specific point of delivery are for the account of the seller, so the parties are best advised to identify as precisely as possible the point of delivery within the agreed place of destination. The seller is best advised to contract for a contract of carriage that exactly matches this choice. If the seller incurs costs under its contract of carriage for unloading at the named place of destination, the seller is not entitled to recover such costs from the buyer unless otherwise agreed between the parties. The CIP term requires the seller to clear the goods for export, where applicable. However, the seller has no obligation to clear the goods for import, pay any import duty, or carry out any import customs formalities.

A THE SELLER’S OBLIGATIONS	B THE BUYER’S OBLIGATIONS
A1 Seller's general obligations The seller must provide the goods and the commercial invoice in conformity with the contract of sale and any other evidence of conformity that may be required by the contract. Any document referred to in A1-A10 may be an equivalent electronic record or procedure if agreed between the parties or customary.	B1 Buyer's general obligations The buyer must pay the price of the goods as provided in the contract of sale. Any document referred to in B1-B10 may be an equivalent electronic record or procedure if agreed between the parties or customary.
A2 Licences, authorisations, security clearances and other formalities Where applicable, the seller must obtain, at its own risk and cost, any export licence or other official authorisation and carry out all customs formalities necessary for the export of the goods and for their transit through any country prior to delivery.	B2 Licences, authorisations, security clearances and other formalities Where applicable, the buyer must obtain, at its own risk and cost, any import licence or other official authorisation and carry out all customs formalities necessary for the import of the goods and for their transit through any country.
A3 Contracts of carriage and insurance a) Contract of carriage The seller must contract for the carriage of the goods from the agreed point of delivery, if any, to the named place of destination or, if agreed, to any point within that place. The seller must contract for carriage at its own cost on usual terms to the agreed point, if any, at the named place of destination, by a usual route and in a customary manner. If a point is not agreed or is not determined by practice, the seller may select the point of delivery that best suits its purpose and the point at the named place of destination that best suits its purpose. b) Contract of insurance The seller must obtain, at its own cost, cargo insurance complying at least with the minimum cover provided by Clauses (C) of the Institute Cargo Clauses (LMA/IUA) or any similar clauses. The insurance shall be contracted with underwriters or an insurance company of good repute and entitle the buyer, or any other person having an insurable interest in the goods, to claim directly from the insurer. When required by the buyer, the seller shall, subject to the buyer providing any necessary information requested by the seller, provide at the buyer's cost any additional insurance, if procurable, such as cover as provided by Clauses (A) or (B) of the Institute Cargo Clauses (LMA/IUA) or any similar clauses and/or cover complying with the Institute War Clauses and/or Institute Strikes Clauses (LMA/IUA) or any similar clauses. The insurance shall cover, at a minimum, the price provided in the contract of sale plus 10% (i.e., 110%) and shall be in the currency of the contract. The insurance shall cover the goods from the point of delivery set out in A4 and A5 to at least the named place of destination. The seller shall provide the buyer with the insurance policy or other evidence of insurance cover. Moreover, the seller must provide the buyer, at the buyer's request, risk, and cost (if any), with information that the buyer needs to procure any additional insurance.	B3 Contracts of carriage and insurance a) Contract of carriage The buyer has no obligation to the seller to make a contract of carriage. b) Contract of insurance The buyer has no obligation to the seller to make a contract of insurance. However, the buyer must provide the seller, upon request, with the necessary information required by the seller to procure any additional insurance requested by the buyer as envisaged in A3 b).
A4 Delivery The seller must deliver the goods by handing them over to the carrier contracted in accordance with A3 on the agreed date or within the agreed period.	B4 Taking delivery The buyer must take delivery of the goods when they have been delivered as stipulated in A4 and receive them from the carrier at the named place of destination.
A5 Transfer of risks The seller bears all risks of loss of or damage to the goods until they have been delivered in accordance with A4, with the exception of loss or damage in the circumstances described in B5.	B5 Transfer of risks The buyer bears all risks of loss of or damage to the goods from the time they have been delivered as stipulated in A4. If the buyer fails to give notice in accordance with B7, then the buyer bears all risks of loss of or damage to the goods from the agreed date or the expiry date of the agreed period for delivery, provided that the goods have been clearly identified as the contract goods.
A6 Allocation of costs The seller must pay a) all costs relating to the goods until they have been delivered in accordance with A4, other than those payable by the buyer as envisaged in B6; b) the freight and all other costs resulting from A3 a), including the costs of loading the goods and any charges for unloading at the place of destination that were for the seller's account under the contract of carriage; c) the costs of insurance resulting from A3 b); and d) where applicable, the costs of customs formalities necessary for export, as well as all duties, taxes, and other charges payable upon export, and the costs of transit through any country that were for the seller's account under the contract of carriage.	B6 Allocation of costs Without prejudice to A3 a), the buyer must pay a) all costs relating to the goods from the time they have been delivered as stipulated in A4, except, where applicable, the costs of customs formalities necessary for export, as well as all duties, taxes, and other charges payable upon export as referred to in A6 which are for the seller's account; b) all costs relating to the goods while in carriage until their arrival at the place of destination, unless such costs are for the seller's account under the contract of carriage; c) any costs of unloading, unless such costs are for the seller's account under the contract of carriage; d) any additional costs incurred if the buyer fails to give notice in accordance with B7, from the agreed date or the expiry date of the agreed period for dispatch, provided that the goods have been clearly identified as the contract goods; e) where applicable, all duties, taxes, and other charges, as well as the costs of carrying out customs formalities payable upon import of the goods and the costs for their transit through any country, unless included within the cost of the contract of carriage; and f) the costs of any additional insurance procured at the buyer's request under A3 and B3.
A7 Notice to the buyer The seller must give the buyer sufficient notice that the goods have been delivered in accordance with A4 as well as any other notice required to allow the buyer to take measures which are normally necessary to enable it to take delivery of the goods.	B7 Notice to the seller The buyer must give the seller sufficient notice whenever it is entitled to decide the time for dispatching the goods and/or the named place of destination or the specific point within that place where the goods are to be received.
A8 Delivery document If customary or at the buyer's request, the seller must, at its own cost, provide the buyer with the usual transport document for the carriage contracted in accordance with A3. This transport document must cover the contract goods and be dated within the period agreed for shipment. If agreed or customary, the document must also enable the buyer to claim the goods from the carrier at the named place of destination and enable the buyer to sell the goods in transit by the transfer of the document to a subsequent buyer or by notification to the carrier. When such a transport document is issued in negotiable form and in several originals, a full set of originals must be presented to the buyer.	B8 Proof of delivery The buyer must accept the transport document provided in accordance with A8 if it is in conformity with the contract.
A9 Checking, packaging, marking The seller must pay the costs of those checking operations (such as checking quality, measuring, weighing, and counting) that are necessary for the purpose of delivering the goods in accordance with A4, as well as the costs of any pre-shipment inspection mandated by the authority of the country of export. The seller must, at its own cost, package the goods, unless it is customary for the particular trade to ship the goods described in the contract without packaging. The seller may package the goods in the manner appropriate for their transport, unless the buyer has notified the seller of specific packaging requirements before the contract of sale is made. Packaging is to be marked appropriately.	B9 Inspection of goods The buyer must pay the costs of any mandatory pre-shipment inspection, except inspection mandated by the authorities of the country of export.
A10 Information and assistance and related costs Where applicable, the seller must, at the buyer's request, risk, and cost, provide or render assistance in obtaining, in a timely manner, any documents or information, including security-related information, that the buyer needs for the import of the goods and/or for their transport to the final destination. The seller must reimburse the buyer for all costs and charges incurred by the buyer in providing or rendering assistance in obtaining documents or information as envisaged in B10.	B10 Information and assistance and related costs The buyer must, in a timely manner, advise the seller of any security information requirements so that the seller may comply with A10. The buyer must reimburse the seller for all costs and charges incurred by the seller in providing or rendering assistance in obtaining documents and information as envisaged in A10. Where applicable, the seller must, at the buyer's request, risk, and cost, provide or render assistance in obtaining, in a timely manner, any documents or information, including security-related information, that the seller needs for the transport and export of the goods and for their transit through any country.

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