Incoterms in Bangladesh 2026: Risk, Insurance, LCs and Proforma Invoice Disputes

Incoterms Bangladesh traders use: the 2026 framework

Incoterms Bangladesh traders choose decide who books the ship, who insures the cargo, where risk passes and which documents the bank will pay against. The rules are private ICC terms, but in Bangladesh they sit inside a regulated system: Bangladesh Bank tells authorised dealer banks which terms to use, the Insurance Act 2010 keeps cargo risk with local insurers, and the Sale of Goods Act 1930 and UCP 600 fill the gaps that a three-letter code leaves open.[4] [7]

This guide covers Incoterms 2020 for Bangladeshi importers and exporters: how the eleven rules allocate risk and cost, which terms the 2026 central bank circulars allow, why imports are normally bought on CFR or CPT, how insurance duties work, how the terms interact with letters of credit and the Sale of Goods Act, and what they mean for customs value. It then deals with the proforma invoice, the document on which most Bangladeshi import contracts are actually built, and the disputes it generates over price, quality, delivery, cancellation and forum.

Summary: Incoterms 2020 allocate delivery, risk, carriage, insurance and clearance, but not title, payment or remedies. For imports, Bangladesh Bank expects credits and contracts to use Incoterms consistent with the Import Policy Order and says imports shall usually be made on CFR or CPT terms, with FOB allowed subject to freight-payment controls. Exporters may use EXW, FCA, FOB, FAS, CFR, CIF, CPT and CIP. Cargo risk in Bangladesh must be insured locally unless IDRA certifies otherwise, so the Bangladeshi buyer normally insures. The proforma invoice is usually the operative offer and must meet the central bank's detail requirements before a bank will open a credit.

Key point: The Bangladesh Bank export circular of 30 July 2026 lists eight Incoterms that exporters may use, and DAP, DPU and DDP are not among them. An exporter that agrees a delivered term with a foreign buyer should clear it with its bank before signing, because the bank must report and monitor the transaction under the regulator's rules.

At a glance

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Table of Contents

How Incoterms 2020 work, and what they leave out

Incoterms are standard trade terms published by the International Chamber of Commerce. The current edition, Incoterms 2020, came into force on 1 January 2020, and parties may still use an earlier edition if their contract names it.[1] [2] They have no force of law in Bangladesh on their own. They bind because the contract incorporates them, which is why a clause should always state the rule, the named place and the edition, for example "CFR Chattogram, Incoterms 2020".

Two families of rules

Seven rules work for any mode of transport: EXW, FCA, CPT, CIP, DAP, DPU and DDP. Four apply only to sea and inland waterway transport: FAS, FOB, CFR and CIF.[1] Each rule tells the parties where delivery takes place, when risk of loss or damage passes, who contracts for carriage, who must insure, and who handles export and import clearance.[1] In 2020 the ICC renamed DAT as DPU, so that delivery after unloading can take place anywhere, not only at a terminal.[1] [2]

What Incoterms do not decide

Incoterms do not deal with every condition of a sale. They do not say when title passes, they do not set the method or timing of payment, and they do not address liability for goods that fail to conform to the contract.[1] Those questions are answered by the contract itself and, where Bangladeshi law governs, by the Sale of Goods Act 1930 and the Contract Act 1872. Treating "FOB" or "CIF" as a complete contract is the root of many of the disputes discussed later in this guide.

The 2020 edition changed details that matter here. Under FCA, the parties can agree that the buyer will instruct its carrier to issue an on-board bill of lading to the seller, which helps sellers who need that document for a credit. Insurance under CIP was raised to Institute Cargo Clauses (A), while CIF kept the lower Clauses (C) minimum.[2]

Risk, cost and delivery under each Incoterms Bangladesh rule

The practical question in every shipment is the same: at what point does a loss stop being the seller's problem? The answer depends on the rule chosen, not on who pays freight. Under the C-terms, for example, the seller pays carriage to the destination but risk passes much earlier, in the country of shipment.[3]

EXW and FCA

Under EXW, the seller makes the goods available at its premises or another agreed place, and risk passes at that point. The buyer is responsible for loading and for export clearance, so EXW is a poor fit for a foreign buyer collecting goods from a Bangladeshi factory, because the buyer cannot easily clear goods for export here.[3] Under FCA, risk passes when the goods are handed to the buyer's carrier at the named place, and the seller clears them for export.[3] For containerised cargo FCA is generally the better choice, because a container is usually handed over at a depot or yard well before it is loaded on a vessel.[3]

FAS and FOB

Under FAS, risk passes when the goods are placed alongside the vessel at the named port of shipment. Under FOB, it passes once the goods are on board. In both cases the seller clears for export and the buyer arranges the main carriage.[3] FOB was designed for cargo the seller can load directly onto the ship, such as bulk or break-bulk goods.[3] Quoting "FOB Chattogram" for containerised garments leaves the exporter carrying risk while a container sits in a yard it no longer controls.

CFR and CIF

Under CFR and CIF the seller contracts for carriage to the named destination port, but risk passes when the goods are loaded on board at the port of shipment. CFR has no insurance obligation; under CIF the seller must buy minimum cover for the buyer's benefit.[3] A Bangladeshi importer buying "CFR Chattogram" therefore bears the risk of the whole ocean voyage, and must insure it.

CPT and CIP

CPT and CIP are the multimodal equivalents. The seller pays carriage to the named destination, and risk passes when the first carrier takes the goods in charge. Only CIP requires the seller to insure.[3] Where goods arrive by air, by road through Benapole or in containers that start their journey inland, CPT fits the facts better than CFR.

DAP, DPU and DDP

Under the D-terms the seller carries risk to the destination. DAP delivers at the named place ready for unloading, DPU after unloading, and DDP also requires the seller to clear the goods for import and pay duties and taxes.[3] A foreign seller agreeing DDP into Bangladesh would have to deal with Bangladesh Customs, VAT and import registration, which is why the term is rare for commercial imports here. The table summarises each rule. On a phone, scroll it sideways.

Which Incoterms Bangladesh Bank expects banks to use

In Bangladesh, the Incoterms choice is not only commercial. Bangladesh Bank's consolidated import circular, FEPD-1 Circular No. 30 of 13 August 2026, tells authorised dealer banks to follow best practice under UCP, URC and Incoterms, to consult the Import Policy Order in force on the use of Incoterms, and to treat local regulations as prevailing where they conflict.[4] Paragraph 10 then provides that appropriate Incoterms should be built into the credit or purchase contract in line with the Import Policy Order, and that imports "shall usually be made on CFR/CPT basis".[4]

FOB imports and the freight certificate

FOB imports are permitted, but subject to paragraph 15 of the same part. At the importer's request, the bank may pay freight in Taka or foreign currency to shipping companies, airlines or eligible licensed freight forwarders, out of the total import value. The bank must endorse the transport charges beside the FOB value and issue a certificate in the form at Appendix 3; carriers are instructed not to accept freight payment without it.[4] Where FOB value and freight together exceed the value of the import, the case goes to the central bank.[4] Banks must also collect transport charges for FOB shipments when they report the transaction to the Online Import Monitoring System.[4]

An importer that wants to nominate its own forwarder can do so, but should expect more paperwork. Our guide to letters of credit in Bangladesh explains the rest of the opening process, and our comparison of LC and TT payment in Bangladesh covers the alternatives to a credit.

The permitted export terms

For exports, Bangladesh Bank's FEPD-1 Circular No. 26 of 30 July 2026 states that EXW, FCA, FOB, FAS, CFR, CIF, CPT and CIP "are allowed to use in export from Bangladesh" if stipulated in the credit or contract. Any inconsistency in the Incoterms used must be reported at once to the issuing bank for amendment. Banks must also keep their exporter customers informed of the appropriate terms, so that exporters can insist on credits and contracts issued accordingly.[5] The list does not mention DAP, DPU or DDP.

The same circular requires banks to report cases where freight has been paid in Bangladesh but the export documents are on FOB terms.[5] If the exporter pays freight, the documents should say CFR or CPT. The wider export regime, from EXP forms to repatriation deadlines, is covered in our guide to export law in Bangladesh.

Insurance duties and Bangladesh's local insurance requirement

Only two Incoterms rules impose an insurance obligation: CIF and CIP. Under CIF, the seller must buy cover at least equal to Institute Cargo Clauses (C), a named-perils standard suited to bulk commodities. Under CIP, the default is Institute Cargo Clauses (A), an all-risks standard, because CIP is more often used for manufactured goods.[2] Under every other rule, insurance is a matter of commercial prudence for whichever party carries the risk, not a contractual duty owed to the other side.

Section 19 of the Insurance Act 2010

Bangladesh adds a statutory layer. Section 19 of the Insurance Act 2010 provides that no person may insure, with an insurer outside Bangladesh, any risk relating to property or interests in Bangladesh, unless the Insurance Development and Regulatory Authority (IDRA) certifies that the risk cannot be covered in Bangladesh. IDRA may also grant exemptions, and must give a written decision on a refusal within 15 days of the application.[7]

The import cover note

Import regulation reinforces the rule. Bangladesh Customs lists an insurance cover note among the general documents for imports, citing the Import Policy Order 2021-2024 and noting that it is required for opening a credit at the bank.[8] Commentary on that Import Policy Order noted that it restricted import insurance to Bangladeshi insurance companies rather than insurers in the exporting country.[9] The Import Policy Order 2026-2029 replaced the 2021-2024 order in 2026; importers should confirm the current insurance clause with their bank and insurer before relying on any older summary.

Why Bangladeshi importers buy CFR or CPT

These rules explain the market preference. If a foreign seller sells CIF, it will normally insure in its own country, and a Bangladeshi bank opening the credit will want local cover in any case. Buying CFR or CPT and insuring with a Bangladeshi insurer satisfies the bank, keeps the premium within the local regulatory system and gives the importer a policy it can claim on in Bangladesh. The regulator's direction that imports usually be on CFR or CPT terms points the same way.[4]

The policy should attach from the moment risk passes under the chosen Incoterm: loading on board at the port of shipment under CFR, or handover to the first carrier under CPT. When something goes wrong in transit, the claim process, survey and subrogation against the carrier are explained in our guide to marine insurance claims in Bangladesh.

Insurance on the export side

An exporter selling CIF or CIP must arrange the insurance itself. The export circular expects banks to see that an insurance claim is made as soon as a loss is known where shipments are lost in transit before payment has been received, and the EXP form must then record the amount of insurance, the insurer and the place where the claim is payable.[5] An exporter on FOB or CFR terms has no duty to insure the voyage, but it still carries risk until loading and should hold cover for the inland leg and port stay.

Incoterms and letters of credit under UCP 600

A documentary credit is, in the words of UCP 600, "a separate transaction from the sale or other contract on which it may be based", and banks "deal with documents and not with goods".[6] The Incoterm in the sale contract does not bind the bank. It becomes relevant to payment only when the credit itself states it and calls for documents that reflect it. For that reason, the credit and the sale contract must use the same rule and the same named place.

Documents that must match the Incoterm

Three documents carry the Incoterm through the credit. The commercial invoice must describe the goods consistently with the credit, and in practice it states the price basis, such as "CFR Chattogram".[6] A bill of lading must show shipment on board a named vessel, either by pre-printed wording or by a dated on-board notation, which is what makes a marine bill workable under FOB, CFR and CIF.[6] Where an insurance document is required and the credit says nothing else, cover must be at least 110 per cent of the CIF or CIP value of the goods.[6]

Data in different documents need not be identical, but must not conflict with each other or with the credit.[6] A bill of lading marked "freight collect" presented under a credit for CFR goods is an obvious conflict, because the seller under CFR has paid freight. When bills of lading themselves become the subject of the dispute, our analysis of bill of lading disputes in Bangladesh covers the carrier's side.

Which terms suit LC payment

The terms that work best with a credit are those under which the seller obtains a transport document at the point of delivery. FOB, CFR and CIF fit sea shipments because the seller receives an on-board bill of lading. FCA, CPT and CIP fit multimodal and air shipments, with FCA now allowing the parties to agree that the buyer's carrier will issue an on-board bill to the seller.[2] EXW is unsuitable, because the seller may never receive a transport document to present. The D-terms sit awkwardly with a credit, because delivery happens at destination after the documents would normally be presented.

Without a credit, no bank checks the documents. The 2026 import circular allows imports under purchase or sales contracts without a credit for eligible importers, subject to supplier credit reports, an importer undertaking on financing and other conditions.[4] In that structure, the sale contract and the PI must carry all the protection that a credit would otherwise supply. Disputes on the credit itself are covered in our guide to LC disputes in Bangladesh.

Incoterms Bangladesh contracts and the Sale of Goods Act 1930

Where a contract is governed by Bangladeshi law, the Sale of Goods Act 1930 supplies the rules that Incoterms leave out. The Act separates two questions that traders often run together: when property passes, and when risk passes. Its headings make the structure clear: goods must be ascertained (section 18), property passes when intended to pass (section 19), unascertained goods pass on appropriation (section 23), the seller may reserve a right of disposal (section 25), and risk prima facie passes with property (section 26).[11]

Risk passes under the Incoterm, not with title

Section 26 is a default rule, displaced where the parties agree otherwise. An Incoterm is that agreement. Under CFR, risk passes on loading even though the seller may keep property, and control of the goods, until the buyer or its bank pays against the bill of lading. Section 25 recognises exactly this: a seller who takes a bill of lading to its own order reserves the right of disposal.[11] So the importer bears the voyage risk before it owns the goods. The contract and the insurance should reflect that.

Section 39: delivery to a carrier and notice to insure

Section 39 treats delivery to a carrier for transmission to the buyer as prima facie delivery to the buyer. It also requires the seller to make a reasonable contract of carriage on the buyer's behalf, failing which the buyer may refuse to treat the handover as delivery or claim damages.[11] Section 39(3) adds that, unless otherwise agreed, where goods are sent by sea in circumstances in which insurance is usual, the seller must give the buyer notice enabling it to insure during the sea transit. If the seller fails to do so, the goods are deemed to be at the seller's risk during the voyage.[11]

Quality and description

The Act also implies conditions that Incoterms never touch. Section 15 implies that goods sold by description will correspond with the description, and section 16 sets out the implied conditions as to quality or fitness. Section 41 gives the buyer a right to examine the goods before acceptance.[11] For imports, examination usually happens only after arrival, long after risk passed at loading, so the contract should state where and how inspection takes place and how long the buyer has to reject.

No CISG safety net

Bangladesh is not a party to the UN Convention on Contracts for the International Sale of Goods; the UNCITRAL status table lists 97 parties, and neither Bangladesh nor India is among them.[10] A foreign court or tribunal may still apply it to a contract with a supplier in a CISG state, so state the governing law alongside the Incoterm.

Customs valuation and pricing under Incoterms Bangladesh imports

The Incoterm on the invoice is the starting point for customs value, but it is not the end point. Bangladesh values imports on the basis of the price actually paid or payable, adjusted to include the cost of transport, insurance and handling to the place of importation. A CFR invoice therefore needs an insurance figure added, and an FOB invoice needs both freight and insurance added. Our guide to customs valuation in Bangladesh explains the rules, the deemed figures applied when actual costs are not shown, and how to challenge an assessment.

Two practical points follow from the Incoterm itself. First, the transport charges stated on the PI must be expressed by reference to the Incoterm used, as the regulator requires.[4] Second, the price must stand up to scrutiny. Banks must be satisfied before opening a credit that the contracted price is competitive with prevailing international prices on the date of the contract.[4] The tariff context is discussed in our analysis of the WTO's impact on Bangladesh trade.

Proforma invoice disputes in Bangladesh

Most Bangladeshi import transactions do not start with a signed sale agreement. They start with a proforma invoice (PI) from the foreign supplier or an indent from its local agent, which the importer signs or accepts and takes to its bank. The import circular requires banks to obtain the underlying indents, proforma invoices or purchase or sales contracts before opening a credit or initiating an import.[4] The PI is therefore both a commercial and a regulatory document, and when the deal goes wrong it is usually the first document a court or tribunal reads.

Legal status: offer, acceptance and contract

In law, a proforma invoice is usually a proposal within the Contract Act 1872. When the buyer signs it, issues a purchase order on its terms or opens a credit that matches it, there is an acceptance, and an agreement made with free consent for lawful consideration is a contract.[12] Acceptance must be absolute: a buyer that returns the PI with changed terms makes a counter-offer.[12] A PI marked "subject to final contract" or lacking essential terms may be no more than an invitation to negotiate, and an agreement whose meaning is not certain is void.[12]

The PI in LC opening

Bangladesh Bank's circular requires a firm order for the goods to be placed and accepted before a credit is opened, with full description of the goods and unit price in each credit.[4] The PI or indent must also give a complete description of the goods, including quality, brand, production date, packaging and grade; list multiple products separately with unit price and quantity; use units suited to each item; state transport charges by reference to the Incoterm; and give the 8-digit HS code.[4] Where the credit exceeds USD 30,000 against a supplier's own PI, or USD 40,000 against a local agent's indent, the bank must obtain a credit report on the supplier.[4]

Older guides describe a separate letter of credit authorisation (LCA) form. Today the operative documents are the bank's LC application, the IMP form and the bank's online reporting; the PI is attached to all of them.[4] Any later mismatch between the PI, the credit and the commercial invoice is visible to the bank, Customs and the regulator.

Price changes after the PI

The most common proforma invoice dispute arises when the supplier tries to raise the price after the buyer has accepted the PI, citing raw material costs, freight or currency movements. If the PI was accepted unconditionally, the supplier is bound by its price unless the PI itself reserved a right to vary it. A unilateral demand is a request for a variation, which needs agreement; the Contract Act treats alteration of a contract as a matter for both parties.[12] A buyer facing such a demand should reply in writing, refuse the variation, call for shipment on the agreed terms, and avoid amending the credit in a way that looks like acceptance.

The importer also has a regulatory reason to resist. Banks must check that the contracted price reflects current international prices, and the importer declares the value on the IMP form.[4] A price that rises after opening, without a documented commercial reason, invites questions from the bank about over-invoicing. Any agreed price change should be recorded in an amended PI and a matching amendment to the credit.

Quality and description disputes

Quality complaints turn on how precisely the PI described the goods. The regulator's requirement to state quality, brand, grade and packaging gives importers a ready reason to insist on a detailed description.[4] Under the Sale of Goods Act, goods sold by description must correspond with it, and the implied conditions as to quality and fitness apply unless excluded.[11] Evidence is the weak point once goods are cleared and used. A pre-shipment inspection certificate called for in the credit, and a joint survey on arrival, are the best protection.

A quality complaint is not a reason for the bank to refuse payment under a credit. Because the credit is independent of the sale contract, the bank pays against complying documents, and the buyer's remedy lies against the seller.[6]

Delivery and shipment dates

The PI should state the latest shipment date, the port or place of loading, the destination and whether partial shipments and transhipment are allowed. Under F- and C-terms, the seller performs by delivering at the point of shipment, so the date that matters is the on-board or handover date, not the arrival date.[3] "Delivery within 60 days" invites argument over shipment versus arrival; a shipment date matching the credit removes it.

Cancellation

Buyers sometimes try to cancel after accepting a PI, often because the market price has fallen or the bank will not open the credit. Once a contract exists, cancellation without a contractual right is a breach, and the seller may claim damages for non-acceptance under the Sale of Goods Act.[11] A buyer that needs flexibility should negotiate it into the PI: a condition that the contract takes effect only when the credit is opened, or a right to cancel before shipment against a fixed payment. A supplier that fails to ship is equally liable for damages for non-delivery.[11]

Frustration rarely helps: the Contract Act voids a contract only where performance becomes impossible or unlawful after it is made, and a price rise or freight spike does not usually meet that test.[12] A force majeure clause listing events and a notice procedure is more reliable.

Jurisdiction, governing law and arbitration clauses

Many supplier PIs carry standard terms on the reverse: the supplier's law, the supplier's courts, or arbitration in the supplier's city. If the importer accepts the PI without objection, those terms usually become part of the contract. Under the Arbitration Act 2001, an arbitration agreement must be in writing, but that includes an exchange of letters, fax or email, and a contract that refers to a document containing an arbitration clause incorporates it.[13] If one party then sues in a Bangladeshi court, the other can ask the court, before filing its written statement, to refer the dispute to arbitration, and the court must do so if the agreement is valid.[13]

Agreements that restrain a party absolutely from enforcing its rights through the ordinary courts are void under section 28 of the Contract Act, which saves arbitration agreements.[12] A clause choosing a foreign court is a different matter, and its effect in Bangladesh will depend on the wording and the facts. Commercially, a judgment or award is only as useful as the place where it can be enforced. Our guide to arbitration clauses in Bangladesh covers clause drafting, and our analysis of foreign arbitral award enforcement in Bangladesh explains what happens next.

Remedies and forum

The Sale of Goods Act gives the seller a suit for the price and damages for non-acceptance, and the buyer damages for non-delivery, specific performance in suitable cases and a remedy for breach of warranty, with interest and special damages preserved.[11] The Contract Act measures compensation by the loss arising naturally from the breach, and limits a stipulated penalty or liquidated sum to reasonable compensation not exceeding the amount named.[12]

Where there is no arbitration clause, a proforma invoice dispute between businesses now belongs in the new Commercial Courts. The Commercial Courts Act 2026 (Act No. 23 of 2026), dated 10 April 2026, covers disputes over the export or import of goods or services, contracts for the sale or supply of goods, carriage of goods, and insurance, among other categories.[14] Its procedure, including mediation, summary judgment and timelines, is explained in our guide to the Commercial Courts Act in Bangladesh, and general breach remedies in our analysis of breach of contract in Bangladesh.

The sequence we follow when a PI dispute arises is set out below.

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Drafting tips for Incoterms Bangladesh traders

Most trade-term disputes can be prevented at drafting. The checklist below reflects the problems we see most often in contracts and PIs.

• Name the rule, the place and the edition: "CPT Dhaka ICD, Incoterms 2020", not "C&F" or "CNF". A named place that is vague, such as "Bangladesh", makes the risk point uncertain.
• Use the right family: FCA, CPT or CIP for containers and air freight; FOB, CFR or CIF for cargo loaded directly onto a vessel.[3]
• Match the credit: the Incoterm, named place, latest shipment date and goods description in the PI must match the credit word for word.[6]
• Meet the PI checklist: quality, brand, production date, packaging, grade, unit price, quantity, Incoterm-based transport charges and the 8-digit HS code.[4]
• Fix insurance: on CFR or CPT imports, arrange local cover before opening and make it attach at the risk point; on CIF or CIP exports, state the clauses and the insured value.[2] [7]
• Require shipment advice: vessel, bill of lading number, date and value within a fixed period after loading, in line with section 39(3).[11]
• Lock the price: state that the price is fixed, or set a precise adjustment formula with a cap and a right to cancel above it.
• Set inspection and claims windows: pre-shipment inspection, a joint survey on arrival, and a fixed period for notifying quality claims.
• Choose law and forum deliberately: strike out supplier back-page terms you have not agreed, and state the governing law and a seat for arbitration.[13]

Exporters should add one more check: if the foreign buyer asks for DAP, DPU or DDP, confirm with the bank that the transaction can be documented and reported before agreeing, because those terms are not on Bangladesh Bank's export list.[5]

What to watch in 2026

Three developments will shape the Incoterms Bangladesh market over the coming year. First, the 2026 circulars allow imports under sales contracts without credits for eligible importers, which moves more risk onto the contract and the PI and away from the bank's document check.[4] Second, scrutiny of import prices continues, and a PI that does not explain its price basis will draw questions. Third, the Commercial Courts Act 2026 gives trade disputes a specialist forum, which may make litigation a more realistic alternative to foreign arbitration for smaller claims.[14]

The choice of Incoterm and the wording of the PI are made in minutes and argued over for years. TRW advises importers, exporters, banks and foreign suppliers on trade terms, PI and contract drafting, insurance structures and trade disputes. Our customs and trade compliance practice and export licensing and market access team can review a contract before signature, or you can contact TRW about a live dispute.

Frequently asked questions

Are Incoterms legally binding in Bangladesh?

Only when the contract incorporates them. They are ICC rules, not legislation, so the contract should name the rule, the place and the edition. Bangladesh Bank also requires banks to use Incoterms consistent with the Import Policy Order.[1] [4]

Which Incoterm should a Bangladeshi importer use?

Usually CFR for sea cargo or CPT for multimodal and air shipments. Bangladesh Bank says imports shall usually be made on those terms, and FOB imports carry extra freight-payment controls.[4]

Can a Bangladeshi exporter sell on DDP terms?

Bangladesh Bank's July 2026 export circular lists EXW, FCA, FOB, FAS, CFR, CIF, CPT and CIP as permitted terms. DDP, DAP and DPU are not listed, so speak to your bank before agreeing them.[5]

Must imports into Bangladesh be insured locally?

Section 19 of the Insurance Act 2010 bars insuring Bangladesh risks with a foreign insurer unless IDRA certifies that the risk cannot be covered locally, and Customs lists an insurance cover note among the documents needed to open a credit.[7] [8]

When does risk pass under CFR Chattogram?

When the goods are loaded on board at the port of shipment, even though the seller pays freight to Chattogram. The importer bears the voyage risk and should insure it.[3]

How much insurance does a CIF or CIP seller have to buy?

Incoterms 2020 require Institute Cargo Clauses (C) under CIF and Clauses (A) under CIP. Under UCP 600, unless the credit says otherwise, cover must be at least 110 per cent of the CIF or CIP value.[2] [6]

Is a proforma invoice a binding contract?

It is usually an offer. Once the buyer accepts it without changes, by signing, issuing a matching order or opening a matching credit, a contract normally exists under the Contract Act 1872.[12]

Can a supplier increase the price after I accept the proforma invoice?

Not unilaterally, unless the PI reserved a right to vary the price. A price change is a variation that needs your agreement, and should be reflected in an amended PI and credit.[12]

What must a proforma invoice contain for an import LC?

A full description including quality, brand, production date, packaging and grade; unit price and quantity for each item; transport charges by reference to the Incoterm; and the 8-digit HS code.[4]

Where is a proforma invoice dispute heard?

In arbitration if the PI or contract contains a valid arbitration clause; otherwise, between businesses, usually in a Commercial Court under the Commercial Courts Act 2026, which covers import, export and sale of goods disputes.[13] [14]