CIF
Category: trade
Cost, Insurance and Freight — seller pays transport and insurance to destination port.
CIF (Cost, Insurance and Freight) is an Incoterm where the seller pays for the goods, shipping costs, and insurance to deliver the goods to the destination port. Risk transfers from seller to buyer once the goods are loaded on the vessel at the port of origin. Customs authorities in many countries use the CIF value to calculate import duties and taxes, making it the standard valuation basis for most import declarations.
Examples
- • A seller shipping goods CIF Shanghai means they pay for the product, ocean freight, and marine insurance up to Shanghai port; duties are calculated on the CIF value.
- • When importing to the US, customs duties are calculated on the CIF value (transaction value + freight + insurance).
- • CIF is the most common Incoterm for sea freight shipments; it includes insurance, unlike FOB where the buyer arranges their own.