Working Policies

1. BUYER ISSUES A FULL LOI OR ICPO ON BEHALF OF SUPPLIER AFTER AGREEING THE PRICE AND TERMS OF TRADING.
2. SELLER SHALL ISSUE A FULL CORPORATE OFFER (FCO) TO BUYER TO ACCEPT SIGN AND RETURN TO SELLER.
3. BUYER SHALL ISSUE AN IRREVOCABLE CORPORATE PURCHASE ORDER (ICPO) TO SELLER.
4. SELLER SHALL ISSUE A DRAFT SALES AND PURCHASE AGREEMENT (SPA) TO BUYER TO SIGN COMPANY SEAL AND RETURN TO SELLER, SELLER SHALL DULY SIGN COMPANY SEAL THE SALES AND PURCHASE AGREEMENT (SPA) AND SEND TO BUYER, THE SALES AND PURCHASE AGREEMENT SHALL BE OPERABLE WHEN SIGNED AND COMPANY SEALED BY THE BUYER AND SELLER. 
5. UPON LODGING OF SIGNED CONTRACT WITH BANKS, BUYER’S BANK SHALL ISSUE VIA SWIFT AN IRREVOCABLE DIVISIBLE TRANSFERABLE SBLC AT SIGHT MT760 100% CASH BACKED, FULLY FUNDED AN OPERATIVE LETTER OF CREDIT TO SELLER’S BANK WITHIN FIVE (5) BANKING DAYS OF EXECUTING THE SALES AND PURCHASE AGREEMENT (SPA)
6. AFTER SELLERS’ BANK HAS RECEIVED LETTER OF CREDIT CONFIRMED, BANK ADVISES SELLER OF SUCH IT PROCEEDS TO ISSUE THE PERFORMANCE BOND (PB) 2% AGAINST OPERATING LETTER IN 7 TO 10 DAYS FOR THE FIRST SHIPMENT ON BEHALF OF THE BUYER AND SELLER SHALL START TRANSPORTING PRODUCT TO THE LOADING PORT TO LOAD CHARTERED VESSEL WITHIN TWENTY (20) DAYS OF SELLER’S BANK RECEIVING THE CONFIRMATION ON THE LETTER OF CREDIT. 
7. AT LOADING PORT, SGS (SOCIETY GENERAL DE SURVEILLANCE) AND CCIC INSPECTION BY BUYER MUST COMPLETE CARGO INSPECTIONS. THE PARTIES IRREVOCABLY AGREE THAT SGS OR BUREAU VERITAS IS THE OFFICIAL AUTHORIZED INSPECTION AGENCY AND THEIR DOCUMENTS RULE AND ARE FINAL UNDER THIS CONTRACT. BUYER IS INVITED TO VISIT PRODUCT AT THE PORT OF LOADING OR SEND HIS OWN INSPECTION TEAM AT BUYER’S COST TO ATTEND SGS INSPECTION AT THE LOADING PORT. ONCE COMPLETED THE INSPECTION AND ALL SHIPPING DOCUMENTS ARE ISSUED, THE PACKAGE OF SHIPPING DOCUMENTS WILL BE SENT TO SELLER’S BANK WHICH IN TURN WILL FORWARD IT TO BUYER’S BANK THAT WILL PROCESS PAYMENT AND FORWARD IT TO SELLER’S BANK. SELLER UPON RECEIPT O PAYMENT, SELLER WILL SEND ORIGINAL SHIPPING DOCUMENT TO BUYER BY DHL OR EQUIVALENT FOR CLEARANCE OF CUSTOMS. 
8. BUYER AND SELLER SHALL SIMULTANEOUSLY HAND SIGN AND COMPANY SEAL FOUR (4) ORIGINAL HARD COPIES OF THE SALES AND PURCHASE AGREEMENT (SPA) MADE INTO PDF FORMAT THAT IS ACCEPTABLE BY BUYER AND SELLER AS LEGAL BINDING ORIGINAL HARD COPIES OF THE SALES AND PURCHASE AGREEMENT (SPA). SELLER SHALL DISTRIBUTE THE EXECUTED FOUR (4) ORIGINAL HARD COPIES OF THE SALES AND PURCHASE AGREEMENT (SPA), SELLER SHALL PROVIDE ONE HARD COPY TO THE SELLER’S BANK AND THE SELLER SHALL KEEP ONE COPY. THE ORIGINAL HAND SIGNED COMPANY SEALED ORIGINAL HARD COPIES IN PDF FORMAT SHALL SUPERCEDE THE DRAFT COPIES OF THE SALES AND PURCHASE AGREEMENT (SPA) AND SHALL BE ACCEPTABLE LEGAL BINDING DOCUMENTS FOR EACH OF THE PARTIES AND THEIR BANKS. ONCE FULL PAYMENT IS RECEIVED FOR THE SHIPMENT, A COMPLETE SET OF ORIGINAL DOCUMENTS WILL BE SENT TO BUYER OR HIS DESIGNATED BANK SO SHIPMENT CAN CLEAR CUSTOMS AT THE COUNTRY OF ARRIVAL OR IF PREFERABLE ORIGINAL DOCUMENTS WILL BE SENT FROM SELLER’S BANK TO BUYER’S BANK.
9. UNDER INTERNATIONAL AND NATIONAL LAWS TO WHICH AGRIDERIA INDUSTRIAL LLC ARE GOVERNED, THE SENDING OF CONFIDENTIAL DOCUMENTS, SUCH AS THE SUBMISSION OF DOCUMENTS, CONTRACTS WITH SUPPLIERS AND OTHER PURCHASING COMPANIES, IS EXTREMELY ILLEGAL AND CAUSES US TO VIOLATE THE INTERNATIONAL TERMS OF THE INTERNATIONAL CHAMBER OF COMMERCE. (ICC).
10. WITH THE CONTRACT IN HAND, REQUESTING DIFFERENT PROCEDURES SUCH AS DOCUMENTATION REQUEST AND VISITS TO FACTORIES, WAREHOUSES AND PRODUCERS, AND WHAT IS NOT NEGOTIATED BETWEEN BUYERS AND SELLERS, WILL BE CONSIDERED SPECULATORY AND OUTSIDE WHAT HAS BEEN AGREED AND SIGNED MAY LEAD THE CANCELLATION OF THE AGREEMENT.
11. WE DO NOT SEND PHYSICAL SAMPLES, WITHOUT EXCEPTION.
12. WE DO NOT SEND PHOTOS OR VIDEOS TO AVOID DISTURBING THE PRIVACY AND IDENTITY OF OUR SUPPLIERS.
13. ALL PAYMENTS MUST BE RELEASED AT THE PORT OF LOADING, WE DO NOT ACCEPT ANY PAYMENT RELEASE AT THE PORT OF DESTINATION.
14. ALL INSPECTION BY SGS / CCIC-CIQ MUST BE DONE AT THE PORT OF LOADING. THE SGS REPORT AT THE PORT OF SHIPMENT IS THE ONLY REFERENCE FOR  
15. PAYMENT, WE DO NOT PERFORM ANY INSPECTION AT THE PORT OF DESTINATION.
16. ALL PROCEDURES MUST BE FOLLOWED FOR THE NEGOTIATION TO CONTINUE.

A FULL SET OF THE FOLLOWING DOCUMENTS SHALL BE ISSUED IN THREE (03) ORIGINAL AND ONE (01) COPY, UNLESS OTHERWISE STATED.

1. COMMERCIAL INVOICE (EACH SIGNED IN ORIGINAL AND STAMPED BY SELLER) SHOWING THE COMMODITY NAME, STANDBY LETTER OF CREDIT (SBLC) NUMBER, B/L NUMBER AND DATE, QUANTITY LOADED, COMMERCIAL INVOICE VALUE AND LOADING PORT. (THREE ORIGINALS AND THREE COPIES).
2. FULL SET CLEAN ON-BOARD MARINE BILLS OF LADING COVERING PORT-TO-PORT SHIPMENT, MARKED AS “FREIGHT PREPAID” ISSUED TO ORDER, BLANK ENDORSED AND NOTIFY BUYER’S ASSIGNED PARTY CHARTER PARTY BILLS OF LADING ACCEPTABLE. (THREE ORIGINAL AND THREE COPIES).
3. CERTIFICATE OF ORIGIN ISSUED BY S.G.S. AND INSPECTION CERTIFICATE OF WEIGHT AND QUALITY, ISSUED BY SOCIETE GENERALE DE SURVEILLANCE (S.G.S.) AT PORT OF LOADING SHOWING, QUALITY AND QUANTITY SHIPPED EVIDENCE THAT GOODS ARE IN FULL CONFORMITY WITH SPECIFICATIONS AND CONDITIONS MENTIONED IN PRESENT AGREEMENT (CONTRACT) (ONE ORIGINAL AND 3 COPIES)
4. PHYTOSANITARY CERTIFICATE ISSUED BY GOVERNMENT AUTHORITY.
5. HEALTH CERTIFICATE BY GOVERNMENT AGENCY.
6. PACKING LIST. (THREE ORIGINAL AND THREE COPIES)
7. DISINFECTION AND CLEANLINESS CERTIFICATE.
8. RESHIPMENT SURVEY REPORT ISSUED AND SIGNED BY MASTER OF CARRYING OCEAN VESSEL AND THE REPRESENTATIVE OF THE HARBOUR AGENCY.
9. CERTIFICATE OF SAMPLING/ANALYSIS ISSUED AND SIGNED BY S.G.S.
10. CERTIFICATE OF WEIGHT ISSUED AND SIGNED BY S.G.S.
11. AN INSURANCE POLICY AGAINST ALL RISKS FOR 110 % OF THE TOTAL VALUE OF THE SHIPMENT WILL BE ISSUED ON BEHALF OF THE BUYER.
12. SHIPPING COMPANY STATEMENT IN 1 ORIGINAL AND 3 COPIES CONFIRMING THAT THE AGE OF THE VESSEL DOES NOT EXCEED TWENTY YEARS (20) AND THE VESSEL IS REGISTERED UNDER LLOYD’S REGISTRY OR COMPARABLE REGISTRY,
13. AQSIQ AND GACC CERTIFICATE REGISTRATION
14. CHARTER PARTY AGREEMENT (CPA)
15. CUSTOMS EXPORT CLEARANCE CERTIFICATE
16. COVID 19 TEST REPORT CERTIFYING THE CARGO IS SUBSTANTIALLY FREE FROM COVID 19 AND RESULTS SHOULD BE NEGATIVE. 
17. BENEFICIARY’S CERTIFICATE CONFIRMING THAT COPIES OF ALL SHIPPING DOCUMENTS WERE SENT TO BUYER’S BANK AND THE HARD COPIES HAVE BEEN SENT TO EACH PARTY BY EMAIL WITH TRANSMISSION RECEIPT.
18. SPELLING AND TYPOGRAPHICAL ERRORS AND DIFFERENCES OF SUCH NATURE BETWEEN BANK ISSUED AND BENEFICIARY ISSUED DOCUMENTS SHALL NOT BE DEEMED DISCREPANCIES PROVIDED THAT THE INTENT OF THE WRITER IS CLEAR FROM THE TEXT. INCOTERMS 2020 IS INCORPORATED IN THIS AGREEMENT AS A COPYRIGHTED AGREEMENT GOVERNED BY THE INCOTERMS 2010. 
19. HALAL CERTIFICATE
20. ANY OTHER CERTIFICATE(S) NOT LISTED BUT ARE REQUIRED TO COMPLETE THE TRANSACTION SHALL BE PROVIDED WHEN REQUESTED TO THE CONCERNING PARTY IF POSSIBLE.

Under international and national laws to which Agrideria Industrial LLC are governed, the sending of confidential documents, such as the submission of documents, contracts with suppliers and other purchasing companies, is extremely illegal and causes us to violate the international terms of the International Chamber of Commerce. (ICC).

We want to state that the information here exposed is of private domain, not being able to show information that compromises the integrity of our clients, by contractual conditions we cannot disclose details of the previous operations, such as B.L., Certificates of Origin and Phytosanitary, IMO of the vessels, among others, under penalty of violation of section Nº 17 and section Nº 18 of the Sales & Purchase Agreement (SPA) contract. In this case, we are releasing information from previous years; however, we request discretion in its handling.

SECTION 17. DISCLOSURE

17.1. THIS AGREEMENT IS NOT TO BE FREELY CIRCULATED AND IS ONLY FOR THE PURPOSE OF THE TRANSACTION CONTAINED HEREIN. ALL DISCLOSED INFORMATION ABOUT THE TRANSACTION TO INSURANCE AGENTS, SHIPPING COMPANIES, BANKING OFFICIALS, AND FORWARDING AGENTS, RELATED PARTIES SHALL NOT BE HELD AS BREACH OF CONFIDENTIALITY, NOR BUYER OR SELLER SHOULD BE HELD RESPONSIBLE FOR THE ACTIONS OF OFFICERS OR AGENTS OF SUCH THIRD PARTIES.

SECTION 18. NON-CIRCUMVENTION AND NON-DISCLOSURE

18.1. THE BUYER AND SELLER ACCEPT AND AGREE TO THE PROVISIONS OF THE INTERNATIONAL CHAMBER OF COMMERCE, LONDON, UNITED KINGDOM FOR NON-CIRCUMVENTION AND NON-DISCLOSURE WITH REGARDS TO ALL AND EVERYONE OF THE PARTIES INVOLVED IN THIS TRANSACTION AND CONTRACT, ADDITIONS, RENEWALS, AND THIRD PARTY ASSIGNMENTS, WITH FULL RECIPROCATION FOR A PERIOD OF FIVE (05) YEARS FROM THE DATE OF EXECUTION OF THIS CONTRACT WITH ADDITIONAL FIVE (05) YEARS AUTOMATIC ROLL OVER RENEWALS AT THE CLOSE OF EACH TRANSACTION OR EXCHANGE OF INFORMATION.

18.2. THIS CLAUSE IS EXTENSIVE TO ALL SUBSIDIARIES AND AFFILIATED COMPANIES AND INCLUDES AND PROTECTS THE INTERMEDIARY COMPANIES, ACTING AS AGENT, BROKERS OR MANDATE. IT IS FURTHER AGREED THAT ANY INFORMATION OF BUYER AND SELLER CONTAINED IN THIS AGREEMENT IS TO BE HELD IN THE STRICTEST CONFIDENCE.

Any request for documentation of past performances will not be provided. 

No past performance documents, no lab reports or certificates, and no product or packaging Images will be provided.

Often some buyers ask us to provide past performance or "sanitized" documents such as BL or SGS reports. We do not provide any past historical documents. Providing this type of document is considered illegal under ICC rules.

When we refuse to provide documents, we are often encouraged to “sanitize” these documents.

Sanitized documents are mainly used by what we call “Flip – Artists”. Flip – Artists are “salespeople” without Product or Product Allocation.

Agrideria Industrial LLC are often asked to provide copy of sanitized BOL or SGS certificate or silo or warehouse receipts or quantity and quality certificates. These are valuable documents that can be used to defraud buyers. Agrideria Industrial LLC, only issue documents related to the business in question and no other past performances and after the buyer has provided the confirmed payment instrument.

These documents are provided during the final production and delivery phase of the purchasing process.

We encourage all buyers to perform due diligence.

Agrideria Industrial LLC is able to provide ample information to the buyer at the time of issuance of the draft contract. That information allows the buyer to obtain information about Agrideria Industrial LLC.

Past performance and product proof. Agrideria Industrial LLC do not provide past transaction history as this is against the law and contractual rules established between seller and buyer, ICC NCNDA - International Chamber of Commerce non-disclosure and non-circumvention agreement Business. Many documents are used fraudulently; therefore, Agrideria Industrial LLC cannot report past performance nor provide any copy of the SGS inspection, certificates of origin and others for the protection of our customers and all customers and the protection of Agrideria Industrial LLC itself.

Agrideria Industrial LLC was aware of its documents being illegally used by companies/brokers operating in the international market on our behalf without our permission. Agrideria does not provide product proof at any time before signing the contract, only after the financial instrument is issued and confirmed by the bank of Agrideria Industrial LLC.

Please, do not insist, it is very easy to issue a product receipt, and any other "false" document, which is why Agrideria Industrial LLC does not do it.

The most common forms of payment

SBLC - Standby Letter of Credit. 

Standby Letter of Credit is a written commitment by a bank that issues it to pay a certain amount of money on behalf of the bank's customer in favor of a beneficiary in the event that the customer / buyer is unable to meet its financial obligation to the beneficiary / salesman.

DLC - Documentary Letter of Credit.
A document issued by a bank that guarantees payment of a buyer's invoices for a specified period and up to a specified amount.
 

RDLC - Revolving Documentary Letter of Credit. RDLC is the same as DLC, but revolves around the life of the contract.

 ARDLC-A Revolving Letter of Credit is a single Letter of Credit that covers multiple transactions over a long period of time. It is very specific in a way that it is used for regular shipments of the same commodity between the same Buyer (Importer) and the Seller (Exporter). This Letter of Credit is issued only once for a certain number of transactions. It avoids the need for repetitive arrangements to open a new Letter of Credit for every transaction.
 

TT - Telegraphic Transfer
A telegraphic transfer (TT) is an electronic method of transferring funds utilized primarily for overseas wire transactions.
Bank transfer.
 

MT - 103
Bank transfers. SWIFT MT-103 is used by the bank when its customers wish to make payment to customers of another bank in another country.

MT - 700-SWIFT message is a type of message which is used by the LC issuing bank for issuing a Letter of Credit.
 

MT - 760
When an MT-760 is issued, the issuing bank places a pool of customer funds, which it guarantees that the funds have been established for payment to the MT-760 beneficiary.

MT - 799-Is an essential part of international trade; a ‘free format message’ sent between banks which confirms funds or proof of deposits on a potential trade. MT799 allows banks to communicate between each other freely through the SWIFT system, rather than being a mechanism for transferring funds or paying.

RWA -
Readiness, Willingness and Availability
A banking term that means: readiness, disposition and availability of funds for a specific transaction.
 

BCL - Bank Comfort Letter or POF - Proof of Funds.
BCL, or Bank Comfort Letter, is a document usually issued by investment banks in which the bank says the client has a good credit history, sufficient to support large transactions, or in which the bank he says that he is willing to grant loans to the client, enough to cover the value of a certain operation.
In other words, it is a vote of confidence issued by the bank, with the purpose of helping to generate trust (comfort) between the parties.
It is usually sent with the LOI letter of intention to prove the purchasing company's financial strength.

BG-A bank guarantee is an assurance that a bank provides to a contract between two external parties, a buyer and a seller, or in relation to the guarantee, an applicant and a beneficiary. The bank guarantee serves as a risk management tool for the beneficiary, as the bank assumes liability for completion of the contract should the buyer default on their debt or obligation.

 DRAFT-A piece of text, a formal suggestion, or a drawing in its original state, often containing the main ideas and intentions but not the developed form 

SWIFT-Is a secure message platform used by banks. There are various types of SWIFT messages used in different cases. Here we are discussing MT700 type SWIFT message.

INCOTERMS-from English International Commercial Terms

Incoterms rules or international trade terms are a series of pre-defined trade terms published by the international chamber of commerce that are widely used in international trade transactions or procurement processes. A series of three-letter business terms relating to common contractual sales practices. The Incoterms rules are primarily intended to clearly communicate the tasks, costs and risks associated with transporting and delivering goods. Incoterms rules are accepted by governments, legal authorities and practitioners around the world for the interpretation of terms most commonly used in international trade. They are intended to reduce or completely eliminate uncertainties arising from different interpretations of the rules in different countries. As such, they are regularly incorporated into sales contracts around the world.

So let's tell you everything you need to know about Incoterms 2022!

The Incoterms are very important so that the person selling abroad can calculate all his expenses. We can see these responsibilities in an illustrative way in the Incoterms eBook Developed by the Marketing Department of Allog International Transport, the publication brings concepts and tips to help professionals with practical content about Incoterms.

It is important to note that the rules determined by the Incoterms are only applied between exporters and importers, not being applied to transport companies, insurance companies and brokers.

According to their origin, the Incoterms were created in 1936 by the International Chamber of Commerce, and their rules have been updated several times, based on developments in the area of logistics and business strategies. The Incoterms were created to respond to the various conflicts between exporters and importers, which occurred due to misinterpretation of international contracts.

HOW MANY INCOTERMS ARE THERE AND WHAT ARE THEIR CATEGORIES?

After the last update, which took place in 2010, we now have 11 Incoterms divided into categories E, F, C and D. They are:

CATEGORY E (EX)

Represents the departure or obligation of the importer. The Incoterm of this category is presented by the letters EXW. When this acronym appears, it means that the importer is responsible for picking up the goods at the manufacturer's address and assumes all costs and risks.

INCOTERM EXW

The goods are made available to the buyer at the seller's establishment or at another named place (factory, warehouse, etc.), not cleared for export and not loaded onto any collection vehicle, this term represents a minimum obligation for the seller. The buyer bears all the costs and risks involved in removing the goods from the seller's establishment, provided that the Purchase and Sale Agreement contains an explicit clause in this regard, the risks and costs involved and the loading of the goods at the exit may be borne by the seller.

EXW should not be used if the buyer cannot be responsible, directly or indirectly, for export formalities, this term can be used in any mode of transport. The responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Load at origin - Buyer

Transport within the country of origin – Buyer

Home country insurance – Buyer

Export rights – Buyer

Inspection - Buyer

Expertise - Buyer

Customs bureaucracies – Buyer

Storage - Buyer

Shipping expenses - Buyer

Stowage – Buyer

Between the country of origin and the country of destination

Transport - Buyer

International insurance - Buyer

In the destination country (buyer's country)

Unloading - Buyer

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

CATEGORY F (FREE)

Represented by Coterminous FAS, FOB or FCA. In this category, the exporter is not responsible for the main freight and international insurance, and the importer is responsible for contracting and paying for these services.

INCOTERM FAS

Seller terminates its obligations at the time the goods are placed beside the carrier vessel, on the pier or in vessels used for loading, at the designated port of shipment, from that moment on, the buyer assumes all risks and costs of loading, payment freight, insurance and other expenses. The seller is responsible for clearing the goods for export. This term can only be used for water transport (sea, river or lake). The responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Seller and Buyer

Expertise - Seller and Buyer

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Buyer

Stowage – Buyer

Between the country of origin and the country of destination

Transport - Buyer

International insurance - Buyer

In the destination country (buyer's country)

Unloading - Buyer

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

INCOTERM FOB

The seller terminates his obligations when the goods cross the ship's rail at the indicated port of shipment and, from that moment on, the buyer assumes all responsibilities for loss and damage, delivery is consumed on board the designated vessel by the buyer, when all expenses are borne by the buyer.

👉🏼 The seller is responsible for clearing the goods for export. This term can be used exclusively in water transport (sea, river or lake), the responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Seller and Buyer

Expertise - Seller and Buyer

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Seller

Stowage - Seller

Between the country of origin and the country of destination

Transport - Buyer

International insurance - Buyer

In the destination country (buyer's country)

Unloading - Buyer

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

INCOTERM FCA

The seller completes his obligations when he delivers the goods, cleared for export, to the care of the international carrier indicated by the buyer, at the specified place, from that moment onwards, all responsibilities of the seller cease, with the buyer being responsible for all expenses and for any loss or damage that the goods may suffer. The place chosen for delivery is very important to define responsibilities regarding the loading and unloading of goods: if delivery takes place on the seller's premises, the latter is responsible for loading onto the buyer's collection vehicle; if delivery takes place at any other agreed location, the seller is not responsible for unloading his vehicle, the buyer may indicate another person, other than the carrier, to receive the goods. In this case, the seller terminates his obligations when the goods are delivered to that person indicated. This term can be used in any mode of transport.

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Cargo at the seller's domicile – Seller

Load elsewhere – Buyer

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Buyer and Seller

Expertise - Buyer and Seller

Customs Bureaucracies – Seller

Storage - Buyer

Shipping expenses - Buyer

Stowage – Buyer

Between the country of origin and the country of destination

Transport - Buyer

International insurance - Buyer

In the destination country (buyer's country)

Unloading - Buyer

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

CATEGORY C (CARRIAGE)

In this case, it means that the transport was paid by the exporter. The Incoterms are represented by the acronyms CFR, CIF, CPT and CIP. The exporter hires and pays for international freight, but it is the importer who assumes responsibility for risks and damages during international transport.

INCOTERM CFR

In the CFR incoterm, the seller is responsible for paying the costs necessary to place the goods on board the ship, the seller is responsible for paying the freight to the designated port of destination and also responsible for export clearance. The risks of loss or damage to the goods, as well as any other additional costs, are transferred from the seller to the buyer at the time the goods cross the ship's wall. . Clause usable exclusively in water transport (sea, river or lake), the responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection – Seller and Buyer

Expertise - Seller and Buyer

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Seller

Stowage - Seller

Between the country of origin and the country of destination

Transport – Seller

International insurance – Buyer if desired

In the destination country (buyer's country)

Download - Seller

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

INCOTERM CIF

Responsibility for the goods is transferred from the seller to the buyer at the time of crossing the ship's rail at the port of shipment, the seller is responsible for paying the costs and freight necessary to take the goods to the indicated port of destination, the buyer must receive the goods at the port of destination and, from then on, be responsible for all expenses. The seller is responsible for clearing the goods for export, and must contract and pay the insurance premium for the main transport.

The insurance paid by the seller has minimum coverage, so it is up to the buyer to assess the need to take out additional insurance, the risks from delivery (crossing the ship's rail) are the buyer's responsibility. Clause usable exclusively in water transport (sea, river or lake). Responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Seller and Buyer

Expertise - Seller and Buyer

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Seller

Stowage - Seller

Between the country of origin and the country of destination

Transport – Seller

International Insurance – Seller

In the destination country (buyer's country)

Download - Seller

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

Unloading the merchandise – Buyer

INCOTERM CPT

The seller contracts and pays the freight to take the goods to the designated destination, from the moment the goods are delivered to the custody of the carrier, the risks for loss and damage are transferred from the seller to the buyer, as well as possible costs additional fees that may be incurred. The seller is responsible for clearing the goods for export, a clause used in any type of transport, the responsibilities are divided as follows:

In the country of origin (seller's country)

Packaging – Seller

Identification – Seller

Load at origin – Seller

Transport within the country of origin – Seller

Insurance in the country of origin – Seller

Export Rights – Seller

Inspection – Seller and Buyer

Expertise – Seller and Buyer

Customs bureaucracies – Seller

Storage – Seller

Shipping expenses – Seller

Stevedoring – Seller

Between the country of origin and the country of destination

Transport – Seller

International insurance – Buyer if desired

In the destination country (buyer's country)

Unloading – Seller

Handling – Buyer

Storage – Buyer

Customs bureaucracies – Buyer

Import duties – Buyer

Transport within the destination country – Buyer

Insurance in the destination country – Buyer

Unloading the merchandise – Buyer

INCOTERM CIP

In this modality, the seller's responsibilities are the same as those described in the CPT, plus the contracting and payment of insurance until the destination, from the moment the goods are delivered to the carrier's custody, the risks for loss and damage are transferred from the seller for the buyer, as well as possible additional costs that may be incurred. The insurance paid by the seller has minimum coverage, so it is up to the buyer to assess the need for additional insurance, a clause used in any type of transport.

In the country of origin (seller's country)

Packaging – Seller

Identification – Seller

Load at origin – Seller

Transport within the country of origin – Seller

Insurance in the country of origin – Seller

Export Rights –Seller

Inspection – Seller and Buyer

Expertise – Seller and Buyer

Customs bureaucracies – Seller

Storage – Seller

Shipping expenses – Seller

Stevedoring – Seller

Between the country of origin and the country of destination

Transport – Seller

International insurance – Seller

In the destination country (buyer's country)

Unloading – Seller

Handling – Buyer

Storage – Buyer

Customs bureaucracies – Buyer

Import duties – Buyer

Transport within the destination country – Buyer

Insurance in the destination country – Buyer

Unloading the merchandise – Buyer

CATEGORY D (DELIVERY)

As the name suggests, this is the arrival category. The Incoterms are DAP, DAT and DDP. This is when the exporter assumes all risks until delivery of the goods.

Are Incoterms contracts?

No, but its rules can be inserted into contracts as clauses. Instead of detailing each item, it is only necessary to mention the code that addresses the issue addressed. It is also worth mentioning that although some Incoterms have been cancelled, they can be used if everyone involved in the negotiation deems it necessary.

INCOTERM DAP

When using INCOTERM DAP (Delivered at Place), or in Portuguese, “delivered at place”, the seller must clear the goods for export in their country, carry out international transport and take the goods to the agreed location. Import clearance at the destination, as well as unloading the goods, are the responsibility of the buyer.

The term DAP can be used for any type of transport, from land and air to sea, river or lake, the risk of transport in DAP is borne by the seller until arriving at the stipulated location. The moment the merchandise leaves the transport vehicle, the risk passes to the buyer.

In the country of origin (seller's country)

Packaging – Seller

Identification – Seller

Load at origin – Seller

Transport within the country of origin – Seller

Insurance in the country of origin – Seller

Export Rights – Seller

Inspection – Seller and Buyer

Expertise – Seller and Buyer

Customs bureaucracies – Seller

Storage – Seller

Shipping expenses – Seller

Stevedoring – Seller

Between the country of origin and the country of destination

Transport – Seller

International insurance – Seller

In the destination country (buyer's country)

Unloading – Seller

Handling – Seller

Storage – Seller

Customs bureaucracies – Buyer

Import duties – Buyer

Transport within the destination country – Seller

Insurance in the destination country – Seller

Unloading the merchandise – Buyer

Unloading of goods - Buyer

INCOTERM DAT

When opting for INCOTERM DAT – Delivered at Terminal, the seller must clear the goods for export in his country, carry out the international transport, unload the goods and make them available at the cargo terminal mentioned in the contract, from the moment the seller deposits the goods at the cargo terminal, his responsibility for it ceases, as well as the risk of transport, which becomes the buyer's responsibility.

The term DAT, or, delivered at the terminal, can be contracted for any mode of international transport, whether air, sea, river, lake or land.

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Seller and Buyer

Expertise - Seller and Buyer

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Seller

Stowage - Seller

Between the country of origin and the country of destination

Transport – Seller

International Insurance – Seller

In the destination country (buyer's country)

Download - Seller

Handling - Buyer

Storage - Buyer

Customs bureaucracies – Buyer

Import duties - Buyer

Transport within the country of destination – Buyer

Insurance in the country of destination – Buyer

Unloading of goods - Buyer

INCOTERM DDP

The seller delivers the goods to the buyer, cleared for import at the designated destination, it is the INCOTERM that establishes the highest degree of commitment for the seller, insofar as it assumes all risks and costs related to the transport and delivery of the goods to the place designated destination. It should not be used when the seller is not able to obtain, directly or indirectly, the documents necessary to import the goods, this term can be used for any means of transport. The term DDP is the exact opposite of EXW.

In the country of origin (seller's country)

Packaging – Seller

Identification - Seller

Origin load – Seller

Transport within the country of origin – Seller

Home country insurance – Seller

Export Rights – Seller

Inspection - Seller

Expertise - Seller

Customs Bureaucracies – Seller

Storage - Seller

Shipping expenses - Seller

Stowage - Seller

Between the country of origin and the country of destination

Transport – Seller

International Insurance – Seller

In the destination country (buyer's country)

Download - Seller

Handling - Seller

Storage - Seller

Customs Bureaucracies – Seller

Import rights - Seller

Transport within the country of destination – Seller

Insurance in the country of destination – Seller

Unloading of goods - Buyer

Find out about all Incoterms in Transport Insurance after the transfer of risk between seller and buyer.

Who is responsible for contracting international transport insurance?

The INCOTERMS (International Trade Terms) define the rights and obligations of the exporter and importer in an international purchase and sale contract. They standardize definitions, establish neutral rules and practices.

For example, INCOTERMS determine where goods must be delivered, who pays for freight, and who is responsible for transport insurance. The INCOTERMS aim to promote harmony in international business, with impartial and standardized rules. They propose, and do not impose, an understanding between seller and buyer regarding the tasks necessary to transport the goods from the place of origin to the destination. This includes packaging, internal transport, export and import licenses, handling terminals, international transport and insurance, among other tasks.

In addition, you can check below who is responsible for taking out transport insurance for each INCOTERMS. Check out!

1 – EXW – Ex Works (at origin) – use of this INCOTERMS in Transport Insurance

EXW is a term used in all types of shipping. It even works when more than one modal is involved. So it's very versatile!

The seller makes the goods available to the buyer at his home, or another agreed place, within the agreed period. Buyer assumes greater responsibility with the EXW term. There is no insurance requirement, but if taken out, the buyer is responsible for it. Transport insurance coverage for this INCOTERMS begins with the departure of the goods from the exporter or supplier. The term EXW is advantageous for the seller, as there is no obligation to take out insurance, and for the buyer, because he has more control over the transport process and can choose the insurance that best meets his needs.

2 – FCA – Free Carrier (free on the carrier) – use of this INCOTERMS in Transport Insurance

The term FCA is valid for any means of transport, including multiple means of transport. The seller completes his obligations by delivering the goods, cleared for export, to the carrier or other person designated by the buyer, at the designated place in the country of origin.

Nobody obliges you to take out insurance, but if you do, the buyer is in charge. So, it becomes easy to understand and remember this rule. Transport insurance coverage for this INCOTERMS begins upon delivery of the goods to the carrier.

3 – FAS – Free Along Ship (free alongside the ship)

We only use FAS for shipping by ship. This term is very simple and easy to remember. It is not suitable for other types of transport. In this modality, the seller completes his responsibilities by placing the goods on the hull of the ship indicated by the buyer, at the named port of shipment. However, there is no insurance requirement, but if contracted, the buyer will be responsible.

In this INCOTERMS term, transport insurance begins when the goods are placed on the ship. So the seller doesn't take care of shipping around the world or taking things off the ship at the place of arrival. The buyer does all this or taking things off the ship at the destination. The buyer does it all.

4 – FOB – Free On Board – use of this INCOTERMS in Transport Insurance

This INCOTERMS helps to understand who takes care of transport insurance. It shows the role of the seller and the buyer in delivering things. It also explains who should take out insurance, especially when shipping items. So it's easy to know who does what.

In FOB, the seller places the cargo on the ship at the port chosen by the buyer. After that, the buyer takes care of shipping and risks. Therefore, the buyer must take out transport insurance to protect the cargo during the journey.

In the case of transporting refrigerated cargo, transport insurance is even more important, as these cargoes have specific characteristics and require special transport and storage conditions. Transport insurance for refrigerated cargo must cover not only conventional risks, such as theft, breakdowns and accidents, but also specific risks, such as damage caused by temperature and humidity variations, for example.

In addition, it is important for the buyer to be aware of the clauses of the contracted transport insurance, to ensure that the coverage offered meets the needs of the transported refrigerated cargo. The buyer must also check whether the contracted insurance covers any damage resulting from actions or omissions by the carrier, such as failures in the refrigeration of the cargo, for example.

5 – CFR – Cost And Freight (cost and freight)

The term CFR stands for “Cost and Freight” and is only used for ship shipments. It makes it clear who pays for shipping and who takes care of things shipped. In this term, the seller hires and pays the freight and ends his obligations and responsibilities when the goods, already cleared for export, are delivered and arranged on board the ship at the port of shipment on the date or within the agreed period.

It is worth remembering that no one is obliged to take out insurance. But if you choose to do it, know that the buyer is the one who takes care of it. So, think carefully before deciding. It is recommended that you take out transport insurance for this INCOTERMS to protect against risks that may occur during transport, such as loss or damage to the cargo.

Therefore, it is important that the buyer is aware of the risks involved in transport and takes out adequate insurance to guarantee the protection of the cargo.

In a nutshell, transport insurance in INCOTERMS CFR is for travel by boat. The seller pays the freight and takes care of things until he gets the cargo on the ship in port. After that, it is good for the buyer to take out insurance. Thus, the load is protected during the trip. Insurance begins to apply when the cargo is on the ship.

6 – CIF – Cost Insurance And Freight (cost, insurance and freight) – use of this INCOTERMS in Transport Insurance

CIF is one of the most used INCOTERMS in transport insurance, in which the seller is responsible for paying the freight, insurance and all export formalities until the arrival of the goods at the port of destination.

However, it is important to highlight that cargo transport insurance is an obligation of the seller, however, the basic insurance coverage offered by CIF may not be sufficient to guarantee the safety of the cargo. Basic transport insurance only covers partial or total damage caused by specific events, such as fire or shipwreck, not covering other possible losses or damages, such as theft or poor storage.

Therefore, it is very important for the seller and the buyer to think about the risks. They should take out good shipping insurance for the things they are going to ship. It's legal to choose insurance with broad protection. Thus, they cover almost all risks and have the right values for the load.

You need to take a good look at the transport insurance policy. Thus, check if there are things that it does not cover and limits. It's also good to see if the insurance amount will be enough in case something goes wrong.

In short, INCOTERMS CIF may seem like an easy and practical solution for the transport of international cargo, but it is essential that the parties involved pay attention to the obligations in transport insurance and contract a policy that guarantees the safety and protection of the cargo throughout the entire period. the route.

7 – CPT – Carriage Paid To (carriage paid until) – use of this INCOTERMS in the Transport Insurance

CPT is one of the INCOTERMS used in any type of transport, even when it involves more than one mode. The seller is responsible for all obligations and risks provided for in the FCA term and must also contract and pay for the costs of transporting the goods cleared for export, to the place of destination.

Although not mandatory, transport insurance for this INCOTERMS may be contracted by the buyer. In this case, the buyer is responsible and the insurance coverage starts from the moment the goods are delivered to the carrier.

It is important to point out that the CPT does not include customs clearance or any other procedures necessary for the importation of goods into the country of destination. This is the buyer's responsibility.

When opting for the CPT, it is necessary that the parties involved in the contract are aware of the obligations and risks that each assumes. It is recommended that all negotiations are recorded in writing to avoid future problems.

In the case of transporting refrigerated cargo, it is essential that the transport insurance for this INCOTERMS be taken out to cover any damage or loss during transport, especially in relation to perishable products. The insurance must include coverage for damage caused by temperature fluctuations, leaks or damage resulting from transport.

8 – CIP – Carriage and Insurance Paid To

Insurance is an important measure to ensure the protection of goods during transport, especially in international operations. In Transport Insurance with INCOTERMS CIP, the seller takes care of the insurance. He pays for damages and ensures that the goods reach the buyer safely. But beware, if you choose Basic Coverage Restricted B or Restricted C, the protection is limited. That's why it's best to choose Basic Coverage Wide A. That way, your cargo is well protected and everyone has peace of mind.

Insurance starts at the place of delivery agreed upon at origin, which means that the buyer does not have to worry about the risks of international transport.

9 – DPU – Delivered At Place Unloaded – use of this INCOTERMS in Transport Insurance

DPU is good for all types of transport, even one that uses more than one. In this case, the seller takes care of the shipment to the agreed place, leaving everything ready for export and import. It also takes things out of transport at the agreed place, such as a port, warehouse or other place. Risk changes hands when everything is offloaded.

As for the INCOTERMS DPU cargo transport insurance, the seller is obliged to take out insurance with a minimum basic coverage (Restricted Basic Coverage C), covering risks inherent in the transport of goods to the destination. However, the parties can negotiate the contracting of insurance with broader coverage, such as Basic Coverage Wide A, which is recommended.

However, it is worth noting that although cargo transport insurance is an obligation of the seller under the INCOTERMS DPU, the buyer may choose to take out additional insurance to ensure full risk coverage. In addition, it is important to check the requirements of the destination country regarding insurance, as they can vary from country to country.

10 – DAP – Delivered At Place (delivered on site) – use of this INCOTERMS in Transport Insurance

In DAP, the seller takes the goods to the place agreed with the buyer. However, this location will still be in the country of origin of the goods. The seller must bear all costs and risks involved in delivering the goods, including freight insurance.

Cargo transport insurance is a fundamental part of the goods delivery process and is mandatory in many cases. The seller needs to take care of insurance for things. He does this from the moment he gives the things to the transporter until the buyer picks them up at the agreed place. So everything is safe during the agreed path. The buyer is entitled to require the seller to take out adequate insurance to cover any damage or loss that may occur in transit.

The INCOTERMS DAP cargo transport insurance must cover the entire value of the goods, as well as the costs associated with delivery. You need to take out insurance that lasts the entire time of transport. This includes possible delays or path changes. Buyer and seller must agree on the type of insurance together. Thus, they avoid problems in the future.

The seller needs to make sure that the goods are well insured during the entire transport. Buyer and seller must agree on the chosen insurance. That way, everything runs smoothly and smoothly. Cargo transport insurance is an essential element to ensure that the goods are delivered safely and without financial loss.

11 – DDP – Delivered Duty Paid (delivered duty paid)

The INCOTERMS DDP is one of the most complete in terms of responsibilities and obligations in international trade. It defines that the seller must bear all the costs and risks involved in delivering the goods to the agreed destination, including customs formalities and the payment of taxes.

Thus, the seller is responsible for providing the goods, already cleared for importation, at the place indicated by the buyer and bearing all costs of international transport, as well as taxes and import fees. The seller must also provide transport insurance with a minimum basic coverage (Basic Restricted Coverage C), insuring the value of the goods at 110% and having the buyer or other insurable party as the beneficiary.

However, even if the seller takes care of insurance, the buyer must check. He needs to make sure that the insurance protects the things being shipped well. So always check and keep an eye out! Otherwise, the buyer must take out additional transport insurance to ensure adequate protection of the cargo.

In INCOTERMS DDP the seller takes care of almost everything in the sale. This can bring risks and many tasks. Therefore, it is good that everyone knows the obligations and responsibilities. Thus, it is important to make a very clear contract to avoid problems later.

Do you have any questions about Transport Insurance and INCOTERMS?

In conclusion, INCOTERMS are an essential tool for carrying out international trade negotiations, as they define the obligations and responsibilities of the seller and the buyer in relation to the transport, insurance and delivery of the goods.

Each term has its own characteristics and you must choose the most suitable one according to your trading needs. It is important to highlight that the correct choice of INCOTERM can directly impact the final price of the operation, in addition to influencing the insurance obligations and risks assumed by the parties involved.

With regard to cargo transport insurance, it is essential that the contracting parties are aware of the obligations that each term implies in relation to contracting and insurance coverage, as well as the coverage options available.

Therefore, it is essential that companies carrying out international trade operations are familiar with the INCOTERMS and obligations in cargo transport insurance, to ensure safer, more transparent and efficient negotiations. Understanding these rules can contribute to the success of business transactions and avoid future problems.