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The international trade terms are FOB, CIF and CFR

Publisher: Wuxi Konid Import and Export Trading Co., Ltd. release time:2020-6-19 11:08:03 The number of clicks:125 shut down

Now the international general trade methods are generally divided into FOB (FOB), CIF (CIF) and bonded area price (CIP). Free on board (FOB) means that the seller has the contractual right to demand payment for the goods after they have crossed the ship's rail. That is, in the case of FOB, as soon as your goods leave the dock, you're fine (really? See the case at the end of the article).

For CIF, you have to deliver the goods safely to a designated port before you can enjoy these rights. The seller shall bear the intermediate charges.
For goods declared on CIF basis, tax exemption and tax credit shall be calculated according to the following formula: tax exemption and tax credit = (transaction value - sea freight - insurance premium - foreign Banks and other deductions) × rebate rate
The terms FOB,CIF and CFR first appeared in the Warsaw-Oxford Rules of 1932. The rules have been amended several times, and finally incoterms 1990 as the most general and authoritative publication. In the domestic three terms are now standardized called price terms. On deck delivery, the seller shall bear the costs and risks before the goods cross the ship's rail, and then the costs and risks shall be transferred to the buyer. Of course, if the goods are to be allowed to cross the ship's rail, the seller shall be responsible for the completion of export clearance procedures. The seller shall be responsible for the cost of transporting the goods to the designated port of destination. The risk shall be that the goods cross the ship's rail at the port of loading. The previous risk shall belong to the seller and the subsequent risk to the buyer. The Seller shall bear the costs and risks during the period when the goods are shipped to the port of destination, in which the risks covered by the seller shall be as little as the minimum.
Three terms in case of container transportation or roll-on roll-off transportation, rail has no actual meaning, FOB terms can be changed to FCA (freecarrier), CFR terms can be changed to CPT (cost&freightpaidtodestinationpoint), CIF terms can be changed to CIP (costinsurencefreightpaidtodestinationpoint). The export clearance of the three clauses shall be borne by the seller, while the import clearance shall be borne by the buyer.
According to the customary practice of international insurance market, the insured amount of export goods is calculated by CIF price plus 10%, and this 10% increase is called insurance premium rate or insurance premium rate, which is the cost and expected profit that the buyer pays for this transaction. The formula that insurance amount calculates is: insurance amount =CIF price * (1+ cast an insurance to add rate) take CIF as the computation base of insurance amount, show not only goods itself, and include freight and insurance premium to be cast as the mark of insurance and cast an insurance, produce a loss is to obtain compensation. Therefore, to insure the goods under the CFR/FOB contract, it is necessary to quote the CFR/FOB price at home to calculate the insurance amount. The calculation formula is: convert CFR price to CIF price: CIF=CFR/[1-(1+ plus rate) * sum of the premium rate], and convert FOB price to CIF price: CIF=(FOB+F)/[1-(1+ plus rate) * sum of the premium rate].