insurance
insurance
with reference to UCP600 article28 para.F , I would like to have your opinion as to the following :when the cif/cip value of invoice consists of goods and additional items such as the cost of 'training' ,'warranty', 'shipping delivery cost' and the like ,and we can identify them in nature and cost-should the insured value be based on the cost of the actual goods alone or should it be based on the total CIF/CIPvalue of invoice?
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AsifMahmoodButt
- Posts: 89
- Joined: Fri Apr 05, 2019 5:21 pm
insurance
Hi
Art 28 f (2) mentions the insurance amount should be either the amount negotiated or the Gross value of goods as shown on the invoice, whichever is greater.
In this case the gross value includes the additional charges mentioned so it would have to be taken for calculation of CIP/CIF.
Regards
Jason
Art 28 f (2) mentions the insurance amount should be either the amount negotiated or the Gross value of goods as shown on the invoice, whichever is greater.
In this case the gross value includes the additional charges mentioned so it would have to be taken for calculation of CIP/CIF.
Regards
Jason
insurance
Thanks for the reply. Does it mean the insurance for 110% of goods only (excluding other items mentioned in the invoice)will be considered as discrepanp?
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AsifMahmoodButt
- Posts: 89
- Joined: Fri Apr 05, 2019 5:21 pm
insurance
Hi
If the other charges are included in the gross amount of invoice then yes, it would be a violation of article 28f.
Regards
Jason
If the other charges are included in the gross amount of invoice then yes, it would be a violation of article 28f.
Regards
Jason
insurance
YaffiD,
Are you dealing with a credit that has actually been issued but which does not state the insurance percentage?
Are you dealing with a credit that has actually been issued but which does not state the insurance percentage?
insurance
well- lc indicates "110 pct of cip value of goods.."
while invoice includes other things besides goods, the exporter insured only the goods.The issuing bank (in Turkey) advised this fact as discrepancy. I think it is not so clear as you mention in your reply.
Literally, the exporter is right -arranged for insurance of the goos only while all other items are not covered.
Think of it again...We are not so sure whether the discrepancy is correct.
while invoice includes other things besides goods, the exporter insured only the goods.The issuing bank (in Turkey) advised this fact as discrepancy. I think it is not so clear as you mention in your reply.
Literally, the exporter is right -arranged for insurance of the goos only while all other items are not covered.
Think of it again...We are not so sure whether the discrepancy is correct.
insurance
YaffiD,
It is possible that I am guilty of regarding a simple situation as being complicated, but I am not absolutely certain as to the answer.
Firstly, it is unclear if the beneficiary has apparently simply insured the EXW, the FOB etc. value of the goods. If they have, then the insurance percentage requirement would clearly have not been met. Would not 'shipping delivery cost' form part of the CIP value of the goods?
Secondly, if it did appear that the calculation of the insurance amount excluded ‘training’ & ‘warranty’ I think my view would, to a large extent, be driven by the transaction description, e.g. whether or not it included reference to 'training', 'warranty' etc and/or whether it included a CIP total value and the way the invoices was set out, e.g. if it showed, at the end, what was stated to be a total CIP value.
It is possible that I am guilty of regarding a simple situation as being complicated, but I am not absolutely certain as to the answer.
Firstly, it is unclear if the beneficiary has apparently simply insured the EXW, the FOB etc. value of the goods. If they have, then the insurance percentage requirement would clearly have not been met. Would not 'shipping delivery cost' form part of the CIP value of the goods?
Secondly, if it did appear that the calculation of the insurance amount excluded ‘training’ & ‘warranty’ I think my view would, to a large extent, be driven by the transaction description, e.g. whether or not it included reference to 'training', 'warranty' etc and/or whether it included a CIP total value and the way the invoices was set out, e.g. if it showed, at the end, what was stated to be a total CIP value.