“Transport and Insurance Prepaid” rule expresses that the seller is to deliver the goods to a carrier or other person selected by itself at a specified point (if not such place have been agreed by the parties) and that the seller must enter into the transport agreement for bringing the goods to a specified destination point and must pay the transport expenses. When the CIP rule is used (just like in the CPT, CFR or CIF rules), seller carries out its delivery obligation not when the goods arrive at the place of destination, but when the goods are delivered pursuant to the respective rule to the carrier.

Characteristics of the delivery type: In this type of delivery, seller undertaking the entire insurance premium, freight and loading expenses and risks brings the goods to the port that they will be loaded. Seller provides and agrees with the ship agency. Notifies the buyer that the goods in the sales agreement were loaded in the specified date and place. Seller, by paying the insurance premium, takes out a sea shipment insurance that has the narrowest coverage and that is suitable for the type of goods loaded. However, if the buyer wants an insurance against extraordinary risks (strike, war, natural disaster etc.)I it may demand the expansion of the coverage by making the payments of the respective premiums.  It is acquired by the seller by 10 % above the value of the goods.

Seller’s Obligations: Seller must prepare the goods in compliance with the agreement terms and conditions. On condition that all expense and risk shall be borne by itself, it receives the required consents for the export of the goods, arranges all the documents for the export of the goods, and carries out the customs clearances. Preparation of the required documents to be used in the buyer’s country is under the seller’s responsibility. It pays the fee of the freight for the transport of the goods until the port of destination by entering into an agreement with the transport agency. Seller takes out the expenses insurance of the goods bearing the respective expenses. It must provide the buyer with the insurance policy or evidence of such insurance guaranty. It is free of the respective risks and expenses at the moment it transfers the goods to the supervision of the first carrier. As of this moment, all expenses and risks related to the goods except for the freight and insurance premium shall belong to the buyer. Seller notifies the buyer about loading that took place and the possible date of arrival.

Buyer’s Obligations: Pays the value of the goods in compliance with the agreement terms and conditions. Unloads its goods without delays by way of paying the unloading expenses and port fees at the port of arrival. Buyer must pay all kinds of mandatory preloading costs of inspections, excluding the examination expenses stipulated by the export country, prior to the loading. All the expenses after the moment of delivery other than the freight and insurance premium are paid by the buyer. Completes the customs clearances by arranging the customs documents for import. It pays all the duties, taxes, and other charges required for import of the goods as well as the expenses of customs clearances.