CIF (Cost, Insurance, Freight)

CIF (Cost, Insurance and Freight) is one of the Incoterms rules defining the division of obligations, costs, and risks between the seller and buyer in international trade. Under CIF, the seller is responsible for: delivering the goods on board the vessel at the port of shipment, paying ocean freight to the port of destination, and purchasing minimum cargo insurance.

In the customs context, the CIF value is of key importance because in the European Union, the customs value of imported goods is in principle determined on a CIF basis — i.e., it includes the price of goods plus transport and insurance costs to the point of entry into the EU customs territory (Art. 71 UCC). If goods are purchased on FOB or EXW terms, transport and insurance costs to the EU border must be added to the customs value.

CIF is used exclusively in sea and inland waterway transport. For land and air transport, the equivalent is CIP (Carriage and Insurance Paid To). Risk in CIF passes to the buyer when the goods are loaded on board the vessel at the port of export, even though the seller has paid freight and insurance to the destination port.