WHERE LC INCORPORATES CNI DELLIVERY TERM

QUESTION

Dear Sir,

We get lots of import LC requests asking us to incorporate Incoterms CNI (Cost and Insurance on beneficiary). This term is not recognized by ICC under Incoterms 2020.

Can we open LC incorporating CNI Incoterms?

And can we raise discrepancy if goods are not insured by the beneficiary?

As always, thank you for your cooperation.

Regards,

Siddhartha Sharma

————–

ANSWER

Hi,

You should not issue LC incorporating delivery terms which are not recognized under Incoterms 2020.

Banks deal with documents and not with goods, services and performances to with the documents may relay.

Where LC incorporates a delivery term which includes insurance, e.g., CNI, but does not requires presentation of insurance document, you cannot raise discrepancy even when you know for sure that the goods are not insured by the beneficiary.

Where LC requires presentation of insurance document and it is not presented, you can raise discrepancy.

And what’s more, as far as I know, CNI delivery term  ever appeared in draft Incoterms 2020, but eventually it was not adopted. You may explain your customers about this matter and ask them to choose an appropriate delivery term.

Best regards

Mr. Old Man