Incoterms 2020 · group C — main carriage paid

CFR — Cost and Freight: delivery terms under Incoterms 2020

The seller pays freight to the port of destination, but risk passes to the buyer as early as on board at the port of shipment. The seller is not obliged to insure the cargo. The CFR term is already selected in the generator

What you are drafting

Import of goods Export of goods

Annex No. 1 Contract

Import of goods on CFR termsExport of goods on CFR terms DOCX

КОНТРАКТCONTRACTMoscow

1. Предмет Контракта 2. Стоимость Контракта 3. Условия поставки 4. Условия оплаты 5. Гарантии и качество 6. Ответственность сторон 7. Арбитраж

1. Subject of the Contract 2. Cost of Contract 3. Terms of the Delivery 4. Terms of the Payment 5. Guarantee and Quality 6. Liability of the Parties 7. Arbitration

ПРОДАВЕЦ / THE SELLERПОКУПАТЕЛЬ / THE BUYER

ПРИЛОЖЕНИЕ № 1 к КОНТРАКТУANNEX No. 1 to CONTRACTСПЕЦИФИКАЦИЯ · SPECIFICATION

На поставку Товаров, на общую сумму

# Описание / Description ТН ВЭД / HS CODE Ед. изм. / Unit of meas. Кол-во / Q-ty Цена / Price Сумма / Total 1 2

Прочие условия / Other terms Гарантия / Warranty Документация / Documentation Условия поставки / Delivery terms Порядок оплаты / Terms of payment Период оказания услуг / Period of provision of services Срок возврата оплаты / Period of refund of payment

ПРОДАВЕЦ / THE SELLERПОКУПАТЕЛЬ / THE BUYER

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Deal scheme

What the draft already fills

Parties, documents and specifics for every deal scheme

Import of goods on CFR terms

PartiesBuyer — Russia, seller — foreign company

Delivery termCFR + port of destination

DocumentsInvoice, packing list, declaration, waybill

SpecificsHS code · Supplier's SWIFT details

Export of goods on CFR terms

PartiesSeller — Russia, buyer — foreign company

Delivery termCFR + port of destination

DocumentsInvoice, packing list, declaration, waybill

SpecificsAdvance refund on cancellation · HS code in the specification

How it works

How to write CFR into the contract

The CFR term is passed into the form from this page

1. Deal type

Import or export of goods. The parties, the goods with HS codes and the prices go into the same form; the Russian party's details are filled in from its INN (tax ID).

2. CFR and port

The CFR term is already selected. Enter the port of destination: the seller pays freight up to it. The delivery term text in the specification will be assembled for CFR.

3. Preview and DOCX

The whole document is visible before payment: the English and Russian columns, the specification, the delivery term. After payment you get the DOCX.

Deal types

A contract on CFR terms

An Incoterms rule applies to the supply of goods — import or export

Import of goods

The supplier pays freight to the Russian port; insurance and the risk at sea are yours.

CFR already selected

HS code

Supplier's SWIFT details

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Export of goods

You pay freight to the buyer's port; risk passes on board.

CFR already selected

Advance refund on cancellation

HS code in the specification

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Obligations

Who does what under CFR

Risk passes when the goods are on board the vessel at the port of shipment — not at the port of destination

Obligation

Seller

Buyer

Loading at the place of dispatch

Yes

—

Export customs clearance

Yes

—

Main carriage

Yes

—

Cargo insurance

—

Optional: the risk in transit is the buyer's

Unloading at the destination

If included in the freight

In other cases

Import clearance, duties and taxes

—

Yes

What to check

CFR in the contract: what to specify

A delivery term without an exact place and without the conditions around it does not work well

✓Code and edition: “CFR [place], Incoterms® 2020” — without the year it is unclear which rules apply

✓Exact port of destination: the seller pays freight up to it

✓Mode of transport: sea and inland waterway only

✓Deadline for notifying that the goods are ready for shipment

✓Transfer of title — Incoterms does not govern it; in the contract it is tied to the moment of delivery

✓Insurance: Incoterms imposes no obligation; decide for yourselves who insures

✓Payment procedure and the deadline for refunding the advance if there is no delivery

✓Documents the seller hands over: invoice, packing list, transport document

FAQ

Questions about the CFR term

Meaning, risk, costs, title

CFR stands for Cost and Freight. The seller loads the goods on the vessel and pays freight to the port of destination, but risk passes to the buyer as early as on board at the port of shipment. The seller is not obliged to insure the cargo.

Only in insurance. Under CIF the seller insures the cargo in favour of the buyer with the minimum cover of Institute Cargo Clauses (C) for at least 110% of the value; under CFR it does not. Under both terms risk passes on board at the port of shipment, so under CFR it makes sense for the buyer to insure the cargo itself.

The port of destination: CFR Saint Petersburg means that the seller pays freight to Saint Petersburg. The port of shipment, where risk passes, is not stated in the designation itself — it is best agreed with the seller: the generator form asks for the port of destination, and the port of shipment, if needed, is added to the specification of the finished document.

Incoterms does not govern the transfer of title — the rules deal only with delivery, risk and costs. The moment title passes is set by the contract or the applicable law; under Russian law (Article 223 of the Russian Civil Code) title arises from the moment the thing is handed over, unless the contract provides otherwise. In our contract title passes together with risk — at the moment of delivery under CFR.

The term code, the exact port of destination and the edition of the rules, for example: CFR Saint Petersburg, Incoterms® 2020. Under Article 1211(6) of the Russian Civil Code, if the contract uses a trade term accepted in international commerce, the parties are deemed to have agreed on the customs that the term denotes — so it is better to name the edition explicitly.

A contract on CFR terms — 2 990 ₽

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✓ Bilingual EN/RU

✓ 173-FZ · CISG · Incoterms 2020

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CFR Incoterms 2020 — delivery terms

CFR in simple terms

CFR is a sea term for the case where it is more convenient for the seller to charter the vessel itself, while the buyer arranges insurance of its own choosing.

How CFR is written in our contract

The delivery term is set out in Annex No. 1 (Specification) in English and Russian. The English column for this term:
CFR [place]
Delivery and transfer of risk: The Seller has fulfilled its delivery obligation when it places the Goods on board the vessel at the port of shipment. The risk of loss of or damage to the Goods and the title to the Goods pass from the Seller to the Buyer at that moment. The Seller paying freight to [place] does not change the moment when risk passes: the arrival of the Goods at the port of destination is not delivery. This rule is to be used only for sea and inland waterway transport.
Costs: The Seller pays freight to the named port of destination ([place]) and bears export formalities. The Buyer bears insurance, unloading at the port of destination unless it is included in the freight, and all subsequent costs.
Customs clearance: export clearance is the Seller's obligation; import clearance, duties and taxes are the Buyer's.
Insurance: Incoterms 2020 imposes no insurance obligation on either Party under this rule. As risk passes to the Buyer at the port of shipment, the Buyer is advised to insure the cargo at its own cost.

CFR and customs value on import

Under CFR the seller pays freight to the port of destination and includes it in the price of the goods. If the port of destination is in the customs territory of the EAEU, these are exactly the costs up to the place of arrival that Article 40 of the EAEU Customs Code includes in the customs value. The freight is already in the price, so it does not need to be added separately. Insurance under CFR is paid by the buyer: if the cargo is insured on the way to the place of arrival, these costs are added to the price under paragraph 1 of Article 40 of the EAEU Customs Code.

All terms: Incoterms 2020 · EXW · FCA · FAS · FOB · CPT · CIP · CIF · DAP · DPU · DDP. See also: import contract, export contract.