Trade Terms, Logistics, Insurance and Payment

Introduction and context

International sales contracts allocate more than the obligation to pay for goods. They also allocate transport arrangements, export and import formalities, insurance, delivery points, documentary duties, and the risk of loss or damage. A commercially attractive price may become uneconomic if the parties misunderstand who pays for inland haulage, port handling, customs clearance, demurrage, insurance, or bank charges. A legally effective payment mechanism may still fail if documents are inconsistent or if a party relies on an unreliable carrier or fraudulent shipping instruction.

This chapter integrates four connected systems: delivery terms under Incoterms® 2020, carriage and transport documents, cargo insurance and customs documentation, and payment and trade-finance techniques. The central managerial task is not simply to select a familiar acronym. It is to align the chosen term with the physical route, the sales contract, the transport contract, the insurance position, the documentary requirements of banks and customs authorities, and the parties’ ability to control operational risks.

Incoterms® rules are published by the International Chamber of Commerce (ICC). They are contractual rules, not a complete law of sale, a payment code, or a substitute for a sales contract. They do not determine title, price, applicable law, dispute resolution, sanctions compliance, or remedies for breach unless the contract separately addresses those matters.

Learning objectives

By the end of this chapter, the reader should be able to:

1. Distinguish allocation of cost, delivery, risk, and responsibility under Incoterms® 2020.
2. Select an appropriate trade term for different transport modes and levels of seller involvement.
3. Analyse carriage contracts, bills of lading, sea waybills, and multimodal documents.
4. Evaluate cargo-insurance coverage, exclusions, claims procedures, and risk-transfer gaps.
5. Identify core customs and export-control documents and common documentary errors.
6. Compare letters of credit, guarantees, documentary collections, and open-account payment.
7. Detect fraud, sanctions, cyber, and operational risks in trade finance and logistics.
8. Integrate legal, financial, and logistical controls into an international transaction.

1. The architecture of an international transaction

A typical transaction involves at least four relationships:

A fifth relationship often exists between a party and customs or other authorities. Customs classification, valuation, origin, licensing, and sanctions controls may apply regardless of the commercial allocation chosen by the parties. A term such as DDP does not transfer the importer’s public-law obligations automatically where local law restricts foreign registration or import representation.

The transaction should therefore be designed as a chain rather than as an isolated sales clause:

Figure: An international transaction is a coordinated chain of contractual, documentary, and financial controls.

2. Incoterms® 2020: cost, delivery, and risk

2.1 What Incoterms® rules do

Each rule addresses selected obligations of seller and buyer, including delivery, transfer of risk, carriage, insurance in some cases, export and import formalities, and allocation of costs. The correct citation should identify the rule, named place, and version, for example: FCA Seller’s warehouse, Rotterdam, Incoterms® 2020. The named place must be precise. “CIF Asia” is inadequate because it does not identify the port or delivery point.

Delivery and risk are related but not identical to payment. Under many rules, risk transfers before the goods arrive at the buyer’s premises. A seller may pay freight to destination while risk has already passed to the buyer. The contract should also specify packaging, inspection, notice, force majeure, insurance, and documentary standards.

2.2 Classification by transport mode

The seven rules usable for any mode or combination of modes are EXW, FCA, CPT, CIP, DAP, DPU, and DDP. The four rules intended for sea and inland waterway transport are FAS, FOB, CFR, and CIF.

The most frequent analytical mistake is to treat “C” rules as destination-risk terms. CPT, CIP, CFR, and CIF are shipment contracts: the seller pays carriage to a destination, but risk transfers at the earlier shipment or handover point stated by the rule. Conversely, DAP, DPU, and DDP are arrival-oriented terms.

2.3 Important distinctions and selection logic

EXW versus FCA. EXW places substantial practical responsibility on the buyer, including loading and export procedures. FCA is usually more coherent where the seller is the exporter of record or can obtain export evidence. For containerized goods, FCA avoids the conceptual problem of FOB: the seller delivers to the carrier or terminal before the container is loaded aboard the vessel.

CPT/CIP versus CFR/CIF. CPT and CIP can be used for road, rail, air, sea, or multimodal carriage. CFR and CIF are restricted to sea or inland waterway shipment where delivery is by placing goods on board the vessel. CIP requires a higher default insurance level than CIF, but neither rule eliminates the need to examine exclusions, deductibles, war and strike risks, and claims procedure.

DAP versus DPU versus DDP. DAP ends with goods ready for unloading. DPU requires seller unloading. DDP places import clearance and fiscal obligations on the seller, which may be impossible or commercially undesirable in the buyer’s jurisdiction. A negotiated DAP term with clear responsibility for import formalities may be safer than an attractive but legally impracticable DDP quotation.

2.4 Cost allocation and total transaction economics

A useful managerial model is the landed-cost identity:

The expression is an analytical identity, not an Incoterms® formula. “Price” must be defined consistently, and each component must be measured in the same currency and time basis. Destination costs may include terminal handling, delivery, storage, inspection, and broker fees. Finance and compliance costs may include letter-of-credit charges, foreign-exchange hedging, sanctions screening, and customs brokerage. Incoterms® reallocates many of these components but does not make them disappear.

A quotation comparison should therefore ask: What is the seller’s quoted price? What costs remain outside it? At what exact point does risk transfer? Who can actually perform the formalities? Which costs are variable, and who controls them?

3. Carriage and transport documents

3.1 The contract of carriage

A carriage contract is separate from the sales contract. The carrier’s obligations may arise under a national law, an international convention, standard carrier conditions, or a charterparty. The applicable regime depends on the mode and route. Examples include the Hague-Visby Rules for certain sea carriage, the Montreal Convention for international air carriage, and the CMR Convention for international road carriage in relevant states. Mandatory regimes can limit contractual freedom and liability.

The parties should identify the contracting carrier, subcontracting rights, route, permitted transshipment, delivery point, freight basis, liability limits, claims deadlines, dangerous-goods requirements, and governing law. A freight forwarder may act as agent, principal, or multimodal transport operator; its legal role must not be assumed from its job title.

3.2 Bills of lading and related documents

A traditional ocean bill of lading can perform three functions:

1. Evidence of receipt or shipment of goods.
2. Evidence of the contract of carriage.
3. A document of title capable, in appropriate legal systems, of controlling possession or constructive delivery through transfer of the document.

A clean bill of lading contains no notation that the apparent condition of goods or packaging is defective. “Clean” does not guarantee quality or conformity with the sales contract. A shipped-on-board bill evidences loading aboard the vessel; a received-for-shipment bill evidences receipt by the carrier but not necessarily loading. A straight bill is generally non-negotiable and identifies a named consignee. An order bill may be transferred by endorsement and delivery, subject to applicable law.

A sea waybill is generally a non-negotiable transport receipt and does not function as a negotiable document of title. It may be efficient where the parties trust each other and rapid release is desired. A multimodal transport document covers movement involving more than one mode and may be issued by a multimodal transport operator.

Documentary letters of credit frequently require a bill of lading with precise features: full set, “on board” notation, consignee, notify party, ports, shipment date, and absence of prohibited clauses. A document can be commercially accurate yet non-complying under the credit. The credit, not the sales contract alone, determines what the nominated bank examines.

4. Cargo insurance and risk management

4.1 Perils, exclusions, and insured interest

Cargo insurance protects against specified physical loss or damage and sometimes related expenses. Coverage depends on the policy wording, insured interest, valuation, voyage, warranties, exclusions, deductibles, and claims process. “All risks” is not literally every risk: ordinary wear, inherent vice, inadequate packing, delay, insolvency of a carrier, war, strikes, sanctions, and other exclusions may apply unless separately covered or modified.

The insured should examine:

• insured value and whether it includes expected profit, freight, duties, or consequential loss;
• the attachment and termination points of cover;
• general average and salvage charges;
• theft, wet damage, temperature deviation, contamination, and breakage;
• war, strikes, riots, and civil disturbance extensions;
• exclusions for sanctions, inadequate packaging, unseaworthiness, or delay;
• notification deadlines, survey requirements, mitigation duties, and evidence;
• subrogation and recovery rights against carriers or other responsible parties.

The risk-transfer rule and insurance attachment must be aligned. Under CIP and CIF, the seller arranges insurance, but the buyer may bear transit risk after the rule’s delivery point. The buyer should receive a usable insurance certificate or policy, understand whether it is the beneficiary or an assignee, and verify that the insured amount and route match the transaction.

4.2 Claims and practical controls

After damage, the insured should preserve goods and packaging, notify the carrier and insurer promptly, obtain a survey where required, record exceptions at delivery, secure transport and commercial documents, and avoid admitting liability prematurely. A claim can fail because the insured cannot prove quantity, condition at shipment, insured interest, or timely notice.

Insurance does not replace careful packaging, carrier selection, temperature monitoring, seal control, or route risk assessment. The best risk program combines contractual allocation, physical controls, insurance, and documentary evidence.

5. Customs and export documentation

Customs compliance is a public-law function and cannot be shifted merely by choosing a trade term. Core data commonly includes the commercial invoice, packing list, transport document, export declaration, import entry, certificate or declaration of origin, licenses, permits, inspection certificates, and insurance evidence where required. The precise requirements depend on the jurisdictions, product, mode, preferential trade agreement, and regulatory status of the goods.

Three recurring customs concepts deserve particular attention:

Classification. The Harmonized System provides a structured classification system, but national tariff schedules and binding rulings may determine the final code. Misclassification can produce duty assessments, penalties, seizure, or export-control violations.

Valuation. Customs value commonly begins with the transaction value but may require additions or adjustments under applicable law, such as assists, royalties, or certain freight and insurance elements. The valuation method is jurisdiction-specific.

Origin. Origin is not always the same as the place of shipment or the seller’s nationality. Preferential origin under a trade agreement may require a substantial-transformation test, product-specific rules, or regional value content. A false origin statement can create duty liability and reputational damage.

Export controls and sanctions screening should cover the goods, end user, end use, destination, banks, carriers, and beneficial owners. A transaction can be prohibited even where the goods are ordinary commercial products. Automated screening and artificial intelligence can identify anomalies, but human review is necessary for false positives, unusual ownership structures, and rapidly changing sanctions regimes.

6. Payment mechanisms and trade finance

6.1 Open account and advance payment

Under open-account terms, the seller ships before receiving payment. This is attractive to the buyer but exposes the seller to credit, country, currency, and collection risk. Controls may include credit insurance, guarantees, retention of title where enforceable, staged shipments, limits, and electronic monitoring.

Advance payment reverses much of that exposure: the buyer funds the seller before shipment and bears performance and refund risk. It is appropriate where the seller has strong bargaining power, the goods are customized, or the buyer has confidence in the seller. Partial advance payment combined with documentary or inspection controls can balance risk.

6.2 Documentary collections

In a documentary collection, the seller’s bank sends commercial and transport documents to the buyer’s bank with instructions to release them against payment (documents against payment, D/P) or acceptance of a time draft (documents against acceptance, D/A). Banks generally act as agents and do not promise payment merely because they handle the documents. Collections are therefore less protective than letters of credit.

The seller must consider whether the buyer can obtain possession without paying, whether the goods can be resold, port storage costs, and the legal effect of the transport document. D/P is stronger than D/A from the seller’s perspective, but neither eliminates country or bank-handling risk.

6.3 Letters of credit

A documentary letter of credit is an undertaking by an issuing bank to pay a beneficiary against presentation of documents that comply with the credit. Its independence principle means the credit is separate from the underlying sales contract. Banks deal with documents, not goods, services, or performance. The issuing bank’s obligation is documentary and conditional.

The governing rules may be the ICC Uniform Customs and Practice for Documentary Credits, UCP 600, if incorporated. The applicant should draft the credit around documents that can realistically be produced. Excessive, vague, or contradictory conditions increase discrepancy risk. The beneficiary should review the credit immediately and request amendment before shipment if it is unacceptable.

Key concepts include:

• Applicant: buyer requesting the credit.
• Issuing bank: buyer’s bank undertaking payment.
• Advising bank: authenticates and advises the credit without necessarily undertaking payment.
• Nominated bank: bank with which the credit is available; nomination alone does not always create an obligation to pay.
• Confirming bank: adds its own undertaking at the beneficiary’s request and subject to its agreement.
• Complying presentation: documents that conform to the credit, applicable rules, and international standard banking practice.
• Discrepancy: a documentary inconsistency or failure to meet a credit condition.

A letter of credit reduces buyer credit risk but does not eliminate issuing-bank, confirming-bank, country, sanctions, fraud, or documentary risk. The fraud exception may permit court intervention in exceptional circumstances where presentation is fraudulent, but its operation varies by jurisdiction and should not be treated as a routine commercial remedy.

6.4 Bank guarantees and standby letters of credit

A demand guarantee is typically an independent undertaking by a bank to pay upon a demand complying with its terms, often securing performance or repayment. A standby letter of credit is also an independent documentary undertaking, commonly used as a payment or performance backstop. These instruments differ from a suretyship, which may be accessory to the underlying obligation and permit broader defenses.

The beneficiary should examine expiry, governing rules, place of presentation, demand wording, extension mechanisms, reduction, counter-guarantees, sanctions clauses, and whether the instrument is payable on first demand or only after proof of default. The applicant should control the risk of an abusive or mistaken demand through clear terms and internal authorization procedures.

7. Fraud, cyber risk, and governance

Trade-finance fraud exploits the separation between documents, goods, money, and identity. Common schemes include forged bills of lading, duplicate financing of the same receivable or warehouse receipt, phantom shipments, manipulated inspection certificates, false supplier bank details, business-email compromise, invoice fraud, collusion with freight intermediaries, and diversion of goods to sanctioned end users.

A robust control framework includes:

1. Independent verification of counterparties, beneficial ownership, bank-account changes, carriers, and vessel information.
2. Dual authorization for payment and callback verification using trusted contact details.
3. Segregation between procurement, goods receipt, document approval, and payment release.
4. Reconciliation of purchase order, invoice, transport document, customs data, inspection report, and warehouse receipt.
5. Verification of document authenticity and electronic records, while recognizing that digital appearance is not proof of legal validity.
6. Sanctions, export-control, anti-bribery, and anti-money-laundering screening.
7. Incident escalation, evidence preservation, recall of funds, and notification of banks and authorities.

Electronic bills of lading and trade platforms may reduce paper handling and improve traceability. Their legal effectiveness depends on applicable electronic-transactions law, system rules, control over the electronic record, exclusivity, and reliable evidence of transfer. Blockchain or AI does not cure inaccurate source data, weak governance, or fraudulent participants. Technology should be assessed for legal enforceability, interoperability, cybersecurity, privacy, auditability, and operational resilience.

8. Applied case: Meridian Components’ container shipment

The following is an illustrative case.

Background

Meridian Components, a manufacturer in Germany, sells industrial sensors to Pacific Automation, a buyer in Singapore. The goods are containerized, shipped by sea, and then delivered by truck. Meridian proposes “FOB Hamburg, Incoterms® 2020,” payment by documentary collection D/A 60 days after sight, and insurance arranged by the buyer.

Problem

Pacific wants Meridian to control export clearance and inland delivery to the port. It also needs financing time and fears damage to temperature-sensitive calibration units. Meridian wants payment assurance and does not want to bear Singapore import duties. The proposed FOB term is operationally questionable because the goods will be delivered to a container terminal before loading. D/A leaves Meridian exposed if Pacific accepts documents but later fails to pay.

Analysis

FCA at Meridian’s warehouse or at a named terminal would better fit container delivery and would place export clearance with Meridian. If Meridian is willing to arrange carriage but wants risk to transfer at handover, CPT Singapore terminal could be used. If Meridian arranges insurance, CIP Singapore terminal may be appropriate, but the parties must specify coverage and claims arrangements. DAP Singapore warehouse would transfer risk later but would leave import clearance and duties with Pacific. DDP should be avoided unless Meridian can lawfully and practically act as importer and pay local taxes.

Because Pacific needs credit, the parties could use an irrevocable documentary letter of credit payable at sight or at 60 days, preferably confirmed if country or bank risk justifies the cost. Alternatively, a standby letter of credit or demand guarantee could support open-account or D/A terms. The credit should require a transport document consistent with the chosen rule, a commercial invoice, packing list, certificate of origin if relevant, and an inspection or temperature record only if the document can reliably be produced.

The insurance schedule should identify the goods, voyage, insured value, temperature risks, deductible, survey procedure, and war and strikes position. Meridian should use a carrier with traceable container seals and electronic temperature monitoring. Both parties should verify tariff classification, origin, import licensing, sanctions exposure, and the identity of the actual carrier.

Outcome

The parties adopt FCA named container terminal, Hamburg, Incoterms® 2020; Pacific contracts the main carriage but authorizes Meridian to arrange it as an agent for a stated fee. Payment is by an irrevocable documentary credit available at 60 days from a complying presentation, with a bank confirmation after credit approval. Pacific handles Singapore import clearance, duties, and final delivery. The credit requires a transport document showing receipt by the carrier rather than an inappropriate ocean on-board bill, unless the carrier and route make an on-board document available. Insurance is arranged by Pacific, with Meridian required to provide shipment data promptly.

Learning points

The case demonstrates that a familiar term can be legally and operationally misaligned. The chosen rule must match container practice, control of customs formalities, desired risk transfer, insurance capacity, and payment risk. Documentary requirements should be drafted after confirming that carriers, insurers, customs brokers, and banks can produce and examine them.

9. Best-practice transaction design

Before signing, prepare a responsibility matrix identifying each task, responsible party, deadline, evidence, and cost. State the exact Incoterms® rule, named place, version, and any agreed modification. Separate delivery from title and payment. Confirm the transport mode and carrier document. Review insurance wording rather than relying on the word “insured.” Validate customs classification, origin, permits, and importer status. Draft payment conditions with bank and logistics specialists, and test whether each required document can be obtained without contradiction.

After signing, maintain shipment milestones, document checklists, exception reporting, sanctions screening, seal and temperature controls, and payment reconciliation. At management level, measure discrepancy rates, claims recovery, transit loss, demurrage, customs penalties, fraud incidents, and total landed cost. A low freight rate is not evidence of a low-risk transaction.

Challenges and limitations

Incoterms® rules cannot resolve every allocation question. They do not determine title, breach remedies, force majeure, insolvency priority, product liability, or all customs consequences. National mandatory law may override contractual language. Carrier liability may be capped below the goods’ value. Insurance may exclude the very peril that management assumed was covered. Documentary finance may pay against apparently complying documents even when goods are defective. Finally, digital systems can accelerate both legitimate processing and fraud.

Graduate-level analysis therefore requires institutional awareness: lawyers interpret obligations and remedies; logistics professionals test physical feasibility; insurers assess perils and evidence; banks assess documentary and credit risk; customs specialists assess public-law compliance; and managers balance cost, control, resilience, and commercial relationships.

Chapter Summary

Incoterms® 2020 allocates specified delivery obligations, costs, risks, carriage responsibilities, insurance duties in selected rules, and customs tasks between seller and buyer. The exact named place and transport mode are decisive. EXW and FCA are not interchangeable; container shipments commonly fit FCA better than FOB. CPT, CIP, CFR, and CIF generally transfer risk at an earlier shipment or handover point even when the seller pays carriage to destination. DAP, DPU, and DDP are arrival-oriented, with DPU uniquely requiring seller unloading.

Carriage contracts and transport documents are distinct from the sales contract. Bills of lading may evidence receipt, carriage, and control of goods, while sea waybills are generally non-negotiable. Cargo insurance depends on wording, exclusions, valuation, deductibles, and claims procedure. Customs compliance requires accurate classification, valuation, origin, licensing, and sanctions controls.

Open account, advance payment, collections, letters of credit, guarantees, and standby credits distribute credit and performance risk differently. Letters of credit are independent documentary undertakings, not guarantees of physical quality. Effective governance combines precise drafting, independent verification, segregation of duties, cybersecurity, sanctions screening, and operational evidence. The best transaction design integrates legal allocation, physical logistics, insurance, customs, payment, and fraud controls.

Key Terms

Incoterms®: ICC rules allocating specified delivery, cost, risk, and responsibility obligations in sales contracts.

Named place: The precisely identified location attached to an Incoterms® rule.

Delivery: The contractual event at which the seller performs the relevant delivery obligation.

Risk transfer: The point at which the risk of loss or damage moves from seller to buyer.

FCA: Free Carrier; delivery to the carrier or nominated person at the named place.

CIP: Carriage and Insurance Paid To; seller pays carriage and arranges specified insurance while risk transfers earlier.

DAP: Delivered at Place; seller delivers ready for unloading at the named destination.

DPU: Delivered at Place Unloaded; seller delivers and unloads at the named destination.

DDP: Delivered Duty Paid; seller bears extensive delivery and import obligations.

Bill of lading: A transport document that may evidence receipt, carriage, and, in appropriate systems, control of goods.

Sea waybill: A generally non-negotiable receipt and carriage document.

Clean bill of lading: A bill without an adverse notation about apparent goods or packaging condition.

Cargo insurance: Insurance covering specified transit risks to goods and related interests.

Customs valuation: The legally determined value used to assess customs duties and related charges.

Certificate of origin: A document or declaration identifying the origin of goods under applicable rules.

Documentary collection: Bank handling of documents against payment or acceptance without the same payment undertaking as a letter of credit.

Letter of credit: An independent bank undertaking to pay against a complying documentary presentation.

Discrepancy: A failure of presented documents to comply with the credit or applicable rules.

Demand guarantee: An independent bank undertaking payable against a complying demand.

Trade-finance fraud: Deception involving goods, documents, identities, payment instructions, or financing claims.

Review Questions

Short Answer Questions

1. Why is the named place essential when an Incoterms® rule is used?
2. Distinguish risk transfer from payment and transfer of title.
3. What are the principal functions of a bill of lading?
4. Why does a letter of credit not guarantee the physical quality of goods?
5. Identify three customs data elements that can create material legal exposure.

Long Answer Questions

1. Compare FCA, FOB, CPT, and CIF for a containerized international shipment.
2. Explain how cargo-insurance exclusions and claims procedures affect risk management.
3. Analyse the legal and commercial differences between documentary collections and letters of credit.
4. Discuss the respective obligations and risks under DAP, DPU, and DDP.
5. Design a governance framework for preventing trade-finance fraud in a multinational company.

Analytical / Application Questions

1. A seller quotes CIF for goods shipped in containers, but the buyer wants risk to remain with the seller until its warehouse. Analyse the mismatch and recommend a term and insurance structure.
2. A bank receives a credit presentation with a bill showing a different notify party, a late shipment date, and a missing insurance certificate. Explain the decision process and possible remedies.
3. A shipment is detained because the certificate of origin is false and the bank has already paid under a complying letter of credit. Allocate the principal legal and commercial issues among buyer, seller, bank, insurer, and customs authority.

Multiple Choice Questions with Answers

Question 1

Which Incoterms® 2020 rule requires the seller to unload the goods at the named destination?

A. DAP

B. DPU

C. DDP

D. CIP

Correct Answer: B. DPU

Question 2

Under CPT, when does risk generally transfer from seller to buyer?

A. When the goods arrive at the named destination

B. When the buyer pays the invoice

C. When the goods are handed to the first carrier

D. When import customs clearance is completed

Correct Answer: C. When the goods are handed to the first carrier

Question 3

Which term is generally most suitable for containerized goods delivered to a carrier before ocean loading?

A. FOB

B. FAS

C. FCA

D. CFR

Correct Answer: C. FCA

Question 4

Which statement best describes a documentary letter of credit?

A. It guarantees that the goods meet the buyer’s quality specifications

B. It is an independent bank undertaking subject to documentary compliance

C. It transfers all customs obligations to the issuing bank

D. It requires the bank to inspect the goods physically

Correct Answer: B. It is an independent bank undertaking subject to documentary compliance

Question 5

What is a principal characteristic of a sea waybill?

A. It is always a negotiable document of title

B. It generally functions as a non-negotiable receipt and carriage document

C. It transfers risk under every sales contract

D. It replaces the need for a sales contract

Correct Answer: B. It generally functions as a non-negotiable receipt and carriage document

Question 6

Under documents against payment, when should the buyer normally obtain the documents?

A. Before shipment without any condition

B. After making the required payment

C. Only after accepting a time draft

D. Only after the insurer pays a claim

Correct Answer: B. After making the required payment

Question 7

Which item is commonly a customs-compliance concern?

A. The seller’s preferred font on an invoice

B. The vessel’s paint colour

C. Classification, valuation, and origin of the goods

D. The buyer’s internal marketing slogan

Correct Answer: C. Classification, valuation, and origin of the goods

Question 8

What does a clean bill of lading generally indicate?

A. The goods are guaranteed to be defect-free

B. No adverse notation was made about apparent goods or packaging condition

C. The buyer has paid all duties

D. The shipment is covered against every insurance exclusion

Correct Answer: B. No adverse notation was made about apparent goods or packaging condition

Question 9

Which control most directly reduces business-email-compromise payment fraud?

A. Accepting bank-detail changes by email alone

B. Using a trusted independent callback and dual authorization

C. Removing segregation of duties

D. Paying immediately when an invoice looks familiar

Correct Answer: B. Using a trusted independent callback and dual authorization

Question 10

Which statement about Incoterms® rules is correct?

A. They automatically determine transfer of title in all jurisdictions

B. They replace the need to specify governing law

C. They allocate specified delivery, cost, and risk obligations but are not a complete sales contract

D. They guarantee that import clearance is legally possible for the seller

Correct Answer: C. They allocate specified delivery, cost, and risk obligations but are not a complete sales contract