Where delivery happens
When the goods are on board the vessel at the port of shipment.
The seller
- Export clearance
- Ocean freight to the named destination port
- Minimum cargo insurance (Institute Cargo Clauses (C) or similar) for at least 110% of the contract value
The buyer
- Risk from loading on board (protected by the seller's policy)
- Import clearance, duty and GST/VAT
When risk passes
Passes on board at the port of shipment.
When to use CIF
Sea cargo, often bulk commodities or where a letter of credit requires CIF.
Watch out
Only minimum insurance cover is required under CIF. Agree higher cover in the contract if the goods are fragile or valuable.
Example
CIF Fremantle: the seller ships and insures to Fremantle; the buyer clears and pays duty and GST.
How it appears on the invoice
Write the three-letter code, the named place and the rules version, for example CIF Fremantle (Incoterms® 2020). The full name is not needed on the document. In Vendara Trade Documents you pick CIF – Cost, Insurance and Freight from the list and the invoice prints just CIF with your named place.
Frequently asked questions
What does CIF mean?
CIF stands for Cost, Insurance and Freight (Incoterms® 2020). Same as CFR, plus the seller buys minimum cargo insurance for the buyer up to the destination port.
Where does risk pass under CIF?
Passes on board at the port of shipment.
Who pays import duty and GST under CIF?
The buyer pays import clearance, duty and import GST or VAT.
When should I use CIF?
Sea cargo, often bulk commodities or where a letter of credit requires CIF.