Consignment Exports Policy - (CEP)

Credit Insurance Policies:

Consignment Exports Policy (Stockholding Agent and Global Entity)

Economic liberalization and gradual removal of international barriers for trade and commerce are opening up various new avenues of export opportunities to Indian exporters of quality goods. One of the methods being increasingly adopted by Indian exporters is consignment exports where the goods are shipped and held in stock overseas ready for sale to overseas ready for sale to overseas buyers,as and when orders are received. The Consignment Policy cover protects the Indian Exporters from possible losses when selling goods to ultimate buyers.    

There are two policies available for covering consignment export viz;

Consignment Exports (Stock-holding Agent)

Consignment Exports (Global Entity Policy)

Under what circumstances, Consignment Exports (Stock Holding Agent) Policy cover can be availed of?

A consignment Exports (Stock-holding Agent) Policy will be appropriate for each exporter – stock holding agent combination provided the following criteria are satisfied.

  • Merchandise are shipped to an overseas entity in pursuance of an agency agreement;
  • The overseas agent would be an independent and separate legal entity with no associate/sister concern relationship with the exporter;
  • The agent’s responsibilities could be any or all of the following, viz., receiving the shipment, holding the goods in stock, identifying ultimate buyers and selling the goods to them in accordance with the directions, receiving payments , if any, of his principal (exporter); and
  • The sales being made by the agent would be at the risk and on behalf of the exporter (whether or not such sales are in the agent’s own name or otherwise) in consideration of a commission or some similar reward or compensation on sales completed.

Under what circumstances Consignment Exports ( Global Entity ) Policy can be availed of ?

The policy can be availed of in respect of consignment exports made by the Indian exporter through its overseas associate viz. branch office , sister concern/subsidiary company etc.,who is called as the global entity, in the following manner.

  • Merchandise are shipped to overseas associates;
  • Overseas associates receives and holds the goods whether or not under written agreement;
  • The overseas party’s responsibilities could ,depending upon its legal status , be any or all of the following , viz. receiving the shipment , holding the goods in stock , identifying ultimate buyers and selling the goods to them in accordance with the directions , if any , of the principal (exporter in India);
  • The sales made by the overseas party need not necessarily be at the risk or on behalf of the exporter.
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