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Read FOB, CIF and CFR
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1 day ago
Abstract:
NowtheinternationalgeneraltrademethodsaregenerallydividedintoFOB(FOB),CIF(CIF)andbondedareaprice(CIP).Freeonboard(FOB)meansthatthesellerhasthecontractualrighttodemandpaymentforthegoodsaftertheyhavecrossedtheship'srail.Thatis,inthecaseofFOB,assoonasyourgoodsleavethedock,you'reallright(areyou?Seethecaseattheendofthearticle).OnaCIFbasis,youhavetodeliverthegoodssafelytoadesignatedportbeforeyoucanenjoytheserights.Thesellershallbeartheintermediatecharges.       ForgoodsdeclaredonCIFbasis,taxexemptionandtaxcreditshallbecalculatedaccordingtothefollowingformula:taxexemptionandtaxcredit=(transactionvalue-seafreight-insurancepremium-foreignBanksandotherdeductions)×rebaterate     ThetermsFOB,CIFandCFRfirstappearedintheWarsaw-OxfordRulesof1932.Theruleshavebeenamendedseveraltimes,andfinallyincoterms1990asthemostgeneralandauthoritativepublication.Inthedomesticthreetermsarenowstandardizedcalledpriceterms.Ondeckdelivery,thesellershallbearthecostsandrisksbeforethegoodscrosstheship'srail,andthenthecostsandrisksshallbetransferredtothebuyer.Ofcourse,ifthegoodsaretobeallowedtocrosstheship'srail,thesellershallberesponsibleforthecompletionofexportclearanceprocedures.Thesellershallberesponsibleforthecostoftransportingthegoodstothedesignatedportofdestination.Theriskshallbethatthegoodscrosstheship'srailattheportofloading.Thepreviousriskshallbelongtothesellerandthesubsequentrisktothebuyer.TheSellershallbearthecostsandrisksduringtheperiodwhenthegoodsareshippedtotheportofdestination,inwhichtheriskscoveredbythesellershallbeaslittleastheminimum.     Threetermsincaseofcontainertransportationorroll-onroll-offtransportation,railhasnoactualmeaning,FOBtermscanbechangedtoFCA(freecarrier),CFRtermscanbechangedtoCPT(cost&freightpaidtodestinationpoint),CIFtermscanbechangedtoCIP(costinsurencefreightpaidtodestinationpoint).Theexportclearanceofthethreeclausesshallbebornebytheseller,whiletheimportclearanceshallbebornebythebuyer.         Accordingtothecustomarypracticeofinternationalinsurancemarket,theinsuredamountofexportgoodsiscalculatedbyCIFpriceplus10%,andthis10%increaseiscalledinsurancepremiumrateorinsurancepremiumrate,whichisthecostandexpectedprofitthatthebuyerpaysforthistransaction.Theformulathatinsuranceamountcalculatesis:insuranceamount=CIFprice*(1+castaninsurancetoaddrate)takeCIFasthecomputationbaseofinsuranceamount,shownotonlygoodsitself,andincludefreightandinsurancepremiumtobecastasthemarkofinsuranceandcastaninsurance,producealossistoobtaincompensation.Therefore,toinsurethegoodsundertheCFR/FOBcontract,itisnecessarytofirstquotetheCFR/FOBpriceathometocalculatetheinsuranceamount.Thecalculationformulais:convertCFRpricetoCIFprice:CIF=CFR/[1-(1+plusrate)*sumofthepremiumrate],andconvertFOBpricetoCIFprice:CIF=(FOB+F)/[1-(1+plusrate)*sumofthepremiumrate].   I.CommissioncalculationFormula:   1withcommissionprice=netprice+unitcommission   Theunitcommission=priceincludingcommission×commissionrate   (3)Priceincludingcommission=netprice+(priceincludingcommission×commissionrate)=netprice/(1-commissionrate)   Ii.DiscountcalculationFormula:   (1)reducedprice=originalprice×(1-discountrate)   Theamountofdiscount=originalprice×discountrate   Threetradetermsandtheirconversionformulasbetweenthecommissionprices   1.ConvertFOBpricesintootherprices   (1)theCFR="+F   (2)CFRC=FOB+F/(1-Commissionrate)   (3)CIF=FOB+F/(1-premiumrate×insurancepremium)(Insurancepremium=1+insurancepremiumrate)   (4)CIFC=FOB+F/(1-insurancerate×insurancepremium-commissionrate)   2.ConvertCFRtootherprices   (1)FOB=CFR-f   (2)CFRC=CFR/(1-commissionrate)   (3)CIF=CFR/(1-premiumrate×insurancepremium)   (4)CIFC=CFR/(1-insurancerate×insurancepremium-commissionrate)   3.ConverttheCFRCpriceintootherprices   (1)FOB=[CFRC×(1-commissionrate)]-f   (2)CFR=CFRC×(1-commissionrate)   (3)CIF=[CFRC×(1-commissionrate)]/(1-premiumrate×Insurancepremium)   (4)CIFC=[CFRC×(1-commissionrate)]/(1-Insurancerate×Insurancepremium-Commissionrate)   ConvertthepricesonCIFbasisintootherprices   (1)FOB=CIF×(1-insurancerate×insurancepremium)-f   (2)CFR=CIF×(1-insurancerate×insurancepremium)   (3)CFRC=[CIF×(1-premiumrate×InsurancePremium)]/(1-Commissionrate)   5.ConvertCIFCpriceintootherprices   (1)FOB=CIFC×(1-insurancerate×insurancepremium-commissionrate)-f   (2)CFR=CIFC×(1-insurancerate×insurancepremium-commissionrate)   (3)CFRC=[CIFC×(1-premiumrate×Insurancepremium-Commissionrate)]/(1-Commissionrate)   Iv.PricecalculationFormula:   1.Costaccountingformula   (1)Actualpurchasecost=tax-inclusivecost(purchasecost)-amountofexporttaxrebate   (2)Amountofexporttaxrebate=tax-inclusivecost×exporttaxrebaterate÷(1+VALUE-ADDEDtaxrate)   2.Freightcalculationformula   1bulkfreight;Basicfreight+surcharge   (2)Containerfreight;ThesameasthefreightforLCLandgroceries,theFREIGHTforFCL=boxrate+surcharge   3.Insurancepremiumaccountingformula   (1)Insurancepremium=amountofinsurance×premiumrate   (2)Amountofinsurance=CIFprice×(1+insurancepremiumrate)   Thepremiumrateisusually10%andtheinsuranceamountiscalculatedonthebasisofCIF(CIP)priceorinvoicevalue
RMB short - term substantial appreciation! Should exchange be settled now? Then the exchange rate moves...
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Abstract:
OnAugust11,theonshoreyuanjumpedmorethan100pointsagainsttheUSdollarandregainedthe6.95mark,whiletheoffshoreyuanbrieflyroseagainsttheUSdollar,risingashighas6.9443by2pm.       ThecentralparityrateoftheRENMINBIagainsttheUSdollarhitafive-monthhighof6.9438onAugust6,threetradingdaysafteritroseinarowsinceAugust,risingnearly1,900pointsfromitslowof7.1316onMay29.       Infact,thetrendofRMBappreciationwasevidentinJuly.InJuly,theexchangerateoftheyuanagainsttheDOLLARrosefirstandthenfluctuated.InJuly,theyuanrose1.34%from7.07attheendofJunetocloseat6.98againsttheDOLLAR.                   SincetheendofMay,theonshoreandoffshoreRMBhaveappreciatedinshock. Itisnowbacktothehighsoffivemonthsago       Notably,thedollarfell4.4percentagainstthepound,6percentagainsttheeuro,5percentagainsttheEuroand4percentagainsttheSwissfrancandAustraliandollarinJuly,thebiggestdeclinesofthepastdecade.       Withthedollaraccountingforabout62percentoftheworld'scentralbankreserves,theworldhashadtoabsorbthefloodofmoneythattheFederalReservehasbeenprintingtosavetheUSeconomysincetheoutbreak.       Exchangeratetrendforecastinthesecondhalfoftheyear       FortheexchangeratetrendofRMBagainstUSdollarinthesecondhalfoftheyear,thepredictionofvariousinstitutionsisasfollows:       LiChao,chiefeconomistofZheshangSecurities,believesthatastheDOLLARindexdeclines,theRMBexchangerateappreciateswithit.However,frictionsbetweenChinaandtheUnitedStatesrise,andtheappreciationrateoftheRMBexchangerateisweakerthanthedeclinerateoftheDOLLARindex.IntoAugust,theRMBexchangeratecontinuestorise,isexpectedtofollow-upisstillvolatile,coreinfluencevariableistheuncertaintyofthefrictionbetweenChinaandAmerica,astheU.S.electionnears,trumpexistthepossibilityoftransferringcontradictionsamongforeignrelationsmayappearintrade,technology,financeandotherfields,andthedisturbanceofRMBexchangerate.Maintaintheexchangeratewithintherangeof6.85-7.2thisyear.       DingAnhua,chiefeconomistofChinaMerchantsBank,believesthatfromtheperspectiveofthetrendofexchangerate,Chinaisthefirsttorecover,theinterestrategapbetweenChinaandtheUnitedStatesremainshigh,andtheexpansionofopening-upisexpectedtofurtherattractcapitalintoChina'scapitalmarket.ThecombinationofUSdollarsgraduallyweakens,andtheadvantageofRMBexchangerateisemerging.Inaddition,Chinapracticesamanagedfloatingexchangeratesystem.Afteryearsofpractice,themonetaryauthoritieshavesufficientreservesoftoolstokeeptheRMBexchangeratebasicallystableatanappropriateandbalancedlevel.Therefore,judgingthattheRMBexchangeratewillnotappeardrasticfluctuations,thefuturewillshowastableandrisingtrendpattern.       LianPing,chiefeconomistandPresidentofTheResearchinstituteofUeschInvestment,believesthattwoimportantfactorsdeterminethechangeoftheRMBexchangerateinthesecondhalfoftheyear:Chinaisbasicallyorientedwell,whiletheUSeconomyandemploymentrecessionissevere,formingaweakDOLLAR;Atthesametime,theUSmayperiodicallypushupthedollarinthefaceofaweakeconomicrecovery,increasinggeopoliticalfrictionwiththeoutsideworld.Inthiscase,itisexpectedthatthesecondhalfofthedollarindexislikelytofall,RMBwillappreciateslightly,aroundthecentralfluctuationsof6.8-7.2.           Thesecurrenciesaregoingdownanddown     UndertheexpectationthattheRMBwillrisesteadily,someofChina'sexportmarketsarefacingdevaluationcrisis.       TheTurkishliraisthemostdangerousofthefallingcurrencies.Thelirahasfallennearly19percentagainstthedollarsofarthisyear,itsbiggestannualdeclinesince2018,whenitlostmorethanaquarterofitsvalue.Thelirahasfallenbyafifthagainsttheeurothisyear.       MosteconomistsbelievethatthecoVID-19hascausedTurkey'stourismindustrytocollapse,leavingahugeholeinthecountry'sfinances.Foreigninvestorshavefled,andoverthepast12months,foreigninvestorshavepulledmoneyoutofthecountry'slocalcurrencybondsandstockmarkets.Facedwiththeseoutflows,Turkeyburnedthroughtensofbillionsofdollarsinforeignexchangereservesthisyeartomaintainanunofficialpeg,markingtheendoftwodecadesoffree-floatingexchangerates.Thelirahasfallentorecordlowsagainstthedollardespitebillionsofdollarsspenttryingtodefendit.       Now,itseems,Turkeydoesnothaveenoughreservestosellto"control"thelira.Afterfallingtoarecordlowlastweek,theliracontinuedtobottomonMonday,plunging1.7percentto7.408againstthedollar.       TheIndianrupeehasbeenoneofAsia'sworstperformersthisyear.Therupeefellbynearly6%in2020.India'seconomyhascontractedannuallyforthefirsttimeinmorethan40years,hitbythecoVID-19pandemic,whichwillweighonfurtherweaknessintherupee.Therupeenowtradesat74.85tothedollar,havinghitarecordlowof76.9088inApril.       ThePakistanirupeehasdonenoworsethanitsIndiancounterpartthisyear,falling8.68%since2020.OnAugust11ththePakistanirupeefelltoarecordlowof168.87againstthedollar.Fitch,aratingsagency,predictstherupeewillremainonadownwardtrendinthemediumtolongtermduetorisingexternaldebtandexpectedinflationarypressures.Butothersarguethattherupee'sdeclineisunsustainable,giventherecentriseinremittancesandforeigninvestment,thesteadyincreaseinforeignexchangereservesoverthepasttwoweeksandtheapparentimprovementinthecurr
27/5000 B/L lost was awarded compensation of 3.16 million, how to lose: how to solve and deal with?
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Abstract:
Abillofladingisadocumentcertifyingthatthecontractofcarriageofgoodsbyseaandthatthegoodshavebeenreceivedorloadedbythecarrier,andthatthecarrierwarrantsthatthegoodsaredeliveredthereagainst.Onlybybillofladingcangoodsbeextracted,soininternationaltrade,especiallyundertheFOB,CFRconditions,billofladingisofgreatsignificance,isconsideredastherepresentativeandsymbolofgoods.       However,onebillofladingcanonlybeissuedforonesetofgoods,andthebillofladingisalsotransferabledocument,sooncethebillofladingislost,itwillhaveagreatimpactonthedevelopmentofforeigntradebusiness,whichmayleadtotheseller'sinabilitytosettleforeignexchangeandthebuyer'sinabilitytopickupthegoods.WiththecontinuousgrowthofChina'simportandexporttrade,thiskindoflosshasbeenoccurringfrequentlyinforeigntradecompaniesrecently.       Sohowtodealwiththelossofb/L?         Generally,thebillofladingislostinthefollowingcases:       1.Lostunderthecontroloftheexporter.   2.Theexporterlosesthedocumentstotheissuingbankaftersendingthemtothebank.   3.TheissuingbanklosesthedocumentsafterhandingthemovertotheCouriercompany.   4.LostafterdeliverytonegotiatingbankbyCouriercompany.   5.Thenegotiatingbanklosesitafterdeliverytotheconsignee.       Inthecaseofarticles1and5,theexporterandimportershallbeliablerespectively;   Incases2and4,theissuingornegotiatingbankshallbeheldresponsible;       Theproblemisthatlossesoftenoccurinathirdcategory,andpostalauthoritieshaveonlyaverylimitedliabilityundercurrentpostalregulations.       Accordingtoincoterms2000,thesellermustpresenttheshippingdocumentstothebuyeronCIF,CFRandFOBtermswithoutdelayandatitsownexpense.Itfollowsfromthisthattheriskofdocumentlossshouldgenerallybebornebytheseller.       Tosecuretheirrights,thecarrierrequirestheconsigneetoguaranteethedeliveryofthegoodsintheabsenceoftheoriginalbillofladingandthebanktoprovidetheguarantee.       Billofladingindifferentcircumstancesoftheloss,theresponsibilityforeachaspectisalsodifferent,butthisislater,afterthelossofthebilloflading,firstortosolvethefollowingmeasurestoreducethepossibilityofrisk.       1.Timelynotifyrelevantshippingcompaniesandtheiragents.Insuchcases,theshippingcompanyanditsfreightforwardingagentareundertheobligationofprudence,andshouldnolongerreleasethegoodssimplybecausetheholderofthebillofladinghastheoriginalbilloflading,butshouldrequirethedrawerstoprovidesufficientevidencethattheyobtainedthebillofladingingoodfaith.Forexample,istheendorsementcontinuous?Doesitmeettherequirements?Hasreasonableconsiderationbeenpaid?Thecarriermayalsodischargetheliabilityforthegoodsunderthebillofladingbyplacingtheminescrowthroughlegalprocedures.       2.Applyforpublicnoticetothecourtintime.Onecanensurethattherightsunderthebillofladingisnotinfringed;Twocansolvetheproblemofmarginlong-termhysteresispressure.Becauseoncethecourtdecidestoacceptthepublicnotice,thetransferofbillrightswithintheperiodisinvalid.Thelegalcostoftheprocedureofpublicizingtheclaimislower,thelawyer'sfeeisalsolower,theexpirationoftheclaimperiod(generally60days)canapplyforthecourttomakeanexterminationjudgment.       3.Generallyspeaking,thelossofdocumentsshouldnotaffecttheportofdischarge,becausetheconsigneeisobligedtoreceivethegoodsandcannotrefusetounloadaccordingly;Likewise,thecarriershallnotrefusetodischargethegoodsonthegroundthattheconsigneedoesnothavetheoriginalbilloflading,althoughhehastherighttorefusetoreleasethegoods.       4.Whatresponsibilitiesshouldthepostalexpresscompanybear?Thecurrentregulationsgiveitalmostexemptionfromliability;Whethercanpassinsuringpostalexpressriskinsurancetopassonloss,currentinsurancecompanyseemsifdidnotcarryoutthisinsurance.       5,thebankissuedaletterofguaranteeaslongasthewordingoftheletterofguaranteeisspecificandcomprehensive,thereisgenerallynorisk.Ifitinvolvesalargeamountofguaranteeletter,itisbettertoaskthelegaladvisertocheckit,becausethereareindeedmanyprecedentsofinvalidbankguaranteeletterinpractice.       Ifthebillofladingislostaftertheshipper'ssettlementofexchange,theownershipofthegoodshasbeentransferredtotheholderofthegoodfaithBilloflading,sogenerallythereisnoneedtoissueanewbilloflading,thecarrier'sobligationistodeliverthegoodstothegoodfaithbillofladingholders.Treatmentshouldalsovaryaccordingtodifferentcircumstances:       Underastraightbilloflading:thecarriermaydeliverthegoodstotheconsigneeonthestraightbillofladinguponreceiptoftheconsignee'sletterofguaranteeandtheconsignor'swrittenguaranteetodeliverthegoodstotheconsignee.       Underthedirectionofbilloflading:iftheagentattheportofdischargehasreceivedtheconsignee'srequestthattheconsigneebeunabletotakedeliveryofthisbillofladingduetothelossoftheBilloflading,theconsigneeshallberequiredtoproducetheoriginal/photocopyofthebillofladingissuedbytheoriginalcarrier,commercialinvoice,commercialcontract,packinglistandotherdocumentstoverifywhethertheconsigneeistheconsignee.Theagentattheportofdischargeshallatthesametimerequiretheconsigneetoprovidealetterofguaranteeinastandardformissuedbyafirst-classbankandshallatthesametimeasktheagentattheloadingporttocontactthesh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