Incoterms Analysis: Seller Pays Carriage, Buyer Handles Insurance & Customs

This question asks to identify an Incoterm where the seller pays for delivery to the destination, but the buyer handles insurance, import customs clearance, duties, taxes, and bears the risk.

Analyzing Incoterms Options

• Carriage and Insurance Paid To (CIP): The seller pays for carriage and insurance to the named destination. Since the question states the buyer assumes insurance, CIP is not the correct term.
• Cost, Insurance and Freight (CIF): The seller pays for cost, insurance, and freight to the destination port. Similar to CIP, the seller covering insurance makes this incorrect based on the question's criteria.
• Carriage Paid To (CPT): The seller pays for the carriage of goods to the named destination. The risk transfers from the seller to the buyer when the goods are delivered to the first carrier (not necessarily at the final destination). The buyer is responsible for arranging and paying for cargo insurance, import customs clearance, duties, and taxes. This aligns perfectly with the question's description.
• Cost and Freight (CFR): The seller pays the cost and freight to the destination port. Risk transfers to the buyer when goods are delivered on board the vessel at the origin port. While the buyer handles insurance and customs, CPT more closely matches the condition where the seller pays carriage *to the destination* and the buyer explicitly handles insurance and risk from the point of delivery to the carrier.

Conclusion

Based on the Incoterms rules, Carriage Paid To (CPT) is the term where the seller bears the cost of carriage to the destination, while the buyer assumes responsibility for insurance, import customs, duties, taxes, and the associated risks after the goods are handed over to the carrier.