Flat Rate for Insurance

When to Use It?

You may use the flat rate of 1% for insurance when:

• The transaction value is quoted in Cost and Freight (CFR) Incoterms, and

• The actual insurance cost is not known or not available to the importer

This 1% rate is used to compute the customs value of the imported goods in the absence of actual insurance charges.

No Insurance Purchased

If no insurance charges were incurred, traders may set the insurance cost to zero when calculating the customs value.

Definition of CFR Incoterms

Under CFR Incoterms:

• The seller is responsible for:

  • Delivering the goods from their premises to the port of export

  • Loading the goods onto the vessel

  • Clearing the goods for export

  • Paying for international freight charges

• Once the goods are on board the vessel:

  • Ownership and risk of loss of the goods are transferred to the buyer

• The buyer is responsible for:

  • Purchasing insurance (if desired)

  • Unloading the goods

  • Clearing customs in Singapore

  • Paying for further transport to the final destination