Cost, Insurance and Freight - CIF

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DEFINITION of 'Cost, Insurance and Freight - CIF'

A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.

INVESTOPEDIA EXPLAINS 'Cost, Insurance and Freight - CIF'

Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery, payment, when the risk of loss shifts from the seller to the buyer and who pays the costs of freight and insurance. The most commonly known trade terms are Incoterms, published by the International Chamber of Commerce (ICC). These are often identical in form to domestic terms (such as the American Uniform Commercial Code), but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms.

It's important to realize that because this is a legal term, its exact definition is much more complicated and differs by country. Contact an international trade lawyer before using any trade term.

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RELATED FAQS
  1. What is the difference between CIF and FOB?

    Cost, Insurance and Freight CIF and Free on Board FOB are international shipping agreements used in the transportation of ... Read Full Answer >>
  2. Do CIF charges affect the customs duties?

    The abbreviation CIF stands for "cost, freight and insurance." It is a term used in international trade in reference to transporting ... Read Full Answer >>
  3. When do you buy CIF and when do you buy FOB?

    The abbreviation CIF stands for "cost, insurance and freight," and FOB means "free on board." These are terms are used in ... Read Full Answer >>
  4. Where can I find the terms governing my CIF in different ports of call?

    Cost, insurance and freight (CIF) is one of the 12 International Commercial Terms (Incoterms). The International Chamber ... Read Full Answer >>
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