Demystifying CIF vs FOB: A Guide to Customs Clearance in International Trade

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In this episode of our customs brokerage series, we delve into the difference between CIF and FOB in terms of customs clearance. FOB (Free On Board) signifies that the responsibility and risk for the goods being transported transfer to the buyer once they are loaded onto the vessel at the port of origin, while CIF (Cost, Insurance, and Freight) signifies that the seller takes care of transportation, insurance, and customs clearance until the goods reach the buyer's destination port. Regardless of whether the shipment is on FOB or CIF terms, a customs broker plays a crucial role in facilitating smooth customs clearance for importers. The customs broker assists in preparing and submitting necessary customs documentation, coordinating with government agencies, calculating duties and taxes, and ensuring compliance with trade regulations. Importers are also required to provide a customs bond and file an Importer Security Filing (ISF) in the United States to ensure compliance and assess potential security risks. Overall, understanding the difference between CIF and FOB in terms of customs clearance is essential for successful international trade.
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Video Disclaimer Here: This video is designed for education and is unaffiliated with US government bodies.

00:35 FOB vs. CIF
01:30 Customs Broker's Role
02:16 Importer Obligations