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Question: |
Name: Azmi
If a letter of credit requires presentation of an
insurance policy or certificate and the incoterm is DDP.
What is the amount of the insurance coverage if the
invoice does not detail the amount CIF or CIP?
Has it to be 100% or 110% of the invoice value,
taking into account that the invoice amount is that to be honoured?
Thanks for your assistance. |
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Answer
(from Bogdan Ilie) |
Since delivery condition
stipulated under the LC is DDP (under which the beneficiary of the LC (the
seller), has no obligation regarding insurance), art.28f(ii) applies "when
the CIF or CIP value cannot be determined from the documents, the amount of
insurance coverage must be calculated on the basis of the amount for which
honour or negotiation is requested or the gross value of the goods as shown
on the invoice, whichever is greater".
Anyway, would be better, in such a
case, to ask issuing bank the amount/percentage of sum insured.
Regards,
Bogdan
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