Common misinterpretation of C-Terms in international trade

Feb 3, 2010 Posted by benny on Feb 3, 2010 in Business | 0 comments

Common misinterpretation of C-Terms in international trade

Terms of principal co prepaid by the seller are terms commonly used by international traders. Two groups of C-termini, is intended to be used when goods are transported by sea, CFR and CIF, and the other group is used for any mode of transport, including shipping and multimodal, CPT and CIP.

Unlike the F-conditions, the reference point is the acronym of C-terms is an indication of a place at the destination instead of place of origin or shipment. For example, CIF Port Klang “or” CFR Busan is an indication that Busan Port Klang and Port are the ports of discharge destination. Is read as ports of embarkation or port of embarkation. The opposite of F-in terms of “FOB Port Klang or FOB Busan” indicates that the Klang and Port of Busan is a port of embarkation or port of embarkation.

There are two “hot spots” that operators must understand the application of C-termini on the market, one is the point of embarkation and the other is the goal. Group C are generally used in cases where recruitment and organization of the main transportation in the country which the seller is not possible for the buyer, which is much faster and cheaper if you let the seller hold. Therefore, in order to ensure the goods reach the buyer, the seller has two primary obligations to be discharged into the C-words:

1. to make a delivery to take place in his country, putting the goods on board the vessel nominated by him in the port of shipment or delivery to the carrier nominated by him anywhere on earth, and;

2. engage and pay for a ride home insurance with the Constitution under CIF and CIP, a location designated by the buyer in the country of the buyer.

Corresponds to the second reason why the destination is deemed necessary by the purchaser and must be indicated after the abbreviation. The buyer must first determine the name of the goods shall be executed in your country. The seller contracts and pay for the main transportation on behalf of the buyer in his country to the point that the name given by the buyer.

Secondly, the insurable interest of transit of goods in terms of C-is the buyer. The risks are transferred from the seller to the buyer at the point of delivery in the country of the seller. Therefore, the buyer is the party that is responsible for purchasing insurance to cover risks in the country to the point of delivery to the discharge point of the CFR and CPT. However, in the CIF and CIP, the seller must obtain insurance for them.

Therefore, under C-terms, the seller is responsible for contracting and paying regard to transport large similar to those of D and the buyer must bear the risks similar to those of EF-term and long terms.