Also known as: Cost Insurance Freight
An Incoterm indicating that the seller assumes the costs of ocean freight and insurance to the agreed destination port, although the risk of loss or damage transfers to the buyer upon shipment.
CIF (Cost, Insurance and Freight) is an Incoterm for ocean transport in which the seller pays the cost of the goods, international ocean freight, and transport insurance to the agreed destination port. However, the risk of loss or damage transfers to the buyer at the time of shipment, not at the destination port.
In Mexico, the CIF value includes the three components forming the dutiable base: cost of goods + freight + insurance. Therefore, the CIF value is generally the direct reference for determining customs value.
A common misconception is that under CIF the seller assumes risk to the destination port. In reality, risk transfers to the buyer at shipment. The seller only pays freight and insurance but the risk is already the buyer's. If the importer wants greater insurance coverage, they must arrange it separately.
FOB (Free on Board)
An Incoterm indicating that the seller delivers goods on board the vessel designated by the buyer at the agreed port of shipment, transferring risks and costs to the buyer at that point.
LogisticsIncoterms
International rules published by the International Chamber of Commerce (ICC) defining buyer and seller responsibilities for transport and delivery of goods.
TradeCustoms Value
The monetary amount on which import duties are calculated, determined according to the WTO Valuation Agreement with transaction value as the primary method.
DocumentsBill of Lading (Ocean)
Maritime transport document serving as a contract of carriage, receipt of goods, and document of title.