Flat Rate for Insurance
Flat Rate for Insurance
Traders may use the flat rate of 1% for insurance to compute the Customs value of imports:
- For transaction values quoted in Cost and Freight (CFR) International Commercial Terms (incoterms)^ and,
- Where the actual insurance charges are not known or not available to the importer
No Insurance Purchased
Traders can set the insurance to zero value if no insurance charges were incurred when importing the goods.
The Cost and Freight (CFR) incoterms means the seller (exporter) is responsible for obtaining customs clearance to export the goods, delivering the goods on board the vessel at the port of shipment and paying international freight charges.
The buyer assumes the ownership and risk of loss of the goods once the goods are on board the vessel. The buyer is responsible for purchasing insurance (if he wants), unloading the goods, clearing customs in the country of import, and paying for transport to deliver the goods to their final destination.