the contract of insurance

THE CONTRACT
OF INSURANCE
The responsibilities of seller:
-
The seller must obtain, as its own expense,
cargo insurance complying at leastwith the
minimum cover provided by Clauses (C) of the
Institute Cargo Clauses ( LMA/IUA) or any
similar clauses.
-
The insurance shall be contracted with
underwriters or insurance company of good
repute and entitle the buyer, or any other person
having an insurable interest in the goods to
claim directly from the insurer.
The responsibilities of seller
(cont)
-
When required by the buyer, the seller
shall, subject to the buyer providing any
necessary information requested by the
seller, provide at the buyer’s expense any
additional cover.
-
If procurable, such as cover as provided by
Clauses (A) or (B) of the Institute Cargo
Clauses (LMA/IUA) or any similar clauses
and/or cover complying with the Institute
War Clauses and/or Institute Strikes Clauses
(LMA/IUA) or any similar Clauses.
-

The insurance shall cover, at a minimum,
the price provided in the contract plus 10%
(i.e. 110%) and shall be in the currency of
the contract.
-
The insurance shall cover the goods from
the pointof delivery set out in A4 and A5 to
at least the named port of destination.
The responsibilities of seller
(cont)
-
The seller must provided the buyer with
the insurance policy or other evidence of
insurance cover.
-
Moreover, the seller must provide the
buyer, at the buyer’s request, risk, and
expense (if any), with information that the
buyer needs to procure any additional
insurance.
The responsibilities of seller
(cont)
The responsibilities of the
Buyer:
-
The buyer has no obligation to the seller
to make a contract of insurance. However,
the buyer must provide the seller, upon
request, with any information necessary for
the seller to procure any additional

insurance requested by the buyer (as
anvisagezd in A3b).
Bonded Warehouse
Bonded Warehouse
-
A bonded warehouse is a building or other
secured area in which dutiable goods may be
stored, manipulated, or undergo
manufacturing operations without payment
of duty.
-
It may be managed by the state or by
private enterprise. In the latter case acustoms
bond must be posted with the government.
-
This system exists in all developed
countries of the world.
Bonded Warehouse (cont)
-
Upon entry of goods into the warehouse,
the importer and warehouse proprietor incur
liability under a bond. This liability is
generally cancelled when the goods are:
*Exported or deemed exported
*Withdrawn for supplies to a vessel or
aircraft in international traffic
*Destroyed under Customs supervision
*Withdrawn for consumption
domestically after payment of duty.
Bonded Warehouse (cont)

-
While the goods are in the bonded
warehouse, they may, under supervision by
the customs authority, be manipulated by
cleaning, sorting, repacking, or otherwise
changing their condition by processes that
do not amount to manufacturing.
Bonded Warehouse (cont)
-
After manipulation, and within the
warehousing period, the goods may be
exported without the payment of duty, or
they may be withdrawn for consumption
upon payment of duty at the rate applicable
to the goods in their manipulated condition
at the time of withdrawal.
Bonded Warehouse (cont)
-
In the United States, goods may remain in
the bonded warehouse up to five years from
the date of importation.
-
Bonded warehouses provide specialized
storage services such as deep freeze or bulk
liquid storage, commodity processing, and
coordination with transportation, and are an
integral part of the global supply chain.
Export Processing
Zone (EPZ)
EPZ

-
A free trade zone (FTZ) or export
processing zone (EPZ), also called foreign-
trade zone, formerly free port is an area
within which goods may be landed, handled,
manufactured or reconfigured, and reexported
without the intervention of the customs
authorities.
-
The basic objectives of EPZs are to enhance
foreign exchange earnings, develop export-
oriented industries and to generate
employment opportunities.
EPZ (cont)
-
Only when the goods are moved to
consumers within the country in which the
zone is located do they become subject to
the prevailing custom duties.
-
Free-trade zones are organized around
major seaports, international airports, and
national frontiers - areas with many
geographic advantages for trade.
-
It is a region where a group of countries
has agreed to reduce or eliminate trade
barriers.
EPZ (cont)
-

Free trade zones can be defined as labor intensive
manufacturing centers that involve the import
of raw materials or components and the export
of factory products.
-
The world's first Free Trade Zone was established
in Shannon, CountryClare , Shannon Free Zone.
-
This was an attempt by the Irish Government to
promote employment within a rural area, make use
of a small regional airport and generate revenue for
the Irish economy.
-
It was hugely successful, and is still in operation
today.
EPZ (cont)
-
The number of worldwide free-trade zones
proliferated in the late 20th century.
-
In the United States free-trade zones were
first authorized in 1934.
-
Most FTZs located in developing
country: Brazil, Colombia, India, Indonesia,
El Salvador, China, Philippines, Malaysia,
Bangladesh, Pakistan, Mexico, Costa Rica,
Honduras, Guatemala, Kenya, Sri Lanka,and
Madagascar have EPZ programs.
EPZ (cont)

-
In 1997, 93 countries
had set up export
processing zones
employing 22.5 million
people.
-
In 1999, there were 43
million people working in
about 3000 FTZs spanning
116 countries producing cl
othes, shoes, sneakers,
electronics and toys.
EPZ (cont)
-
Corporations setting up in a zone may be
given tax breaks as an incentive.
-
Usually, these zones are set up in
underdeveloped parts of the host country, the
rationale is that the zones will attract
employers and thus reduce poverty and
unemployment, and stimulate the area's
economy.
-
These zones are often used by
multinational corporations to set up factories
to produce goods