Understanding Cost, Insurance and Freight (CIF) delivery for international gold procurement — what it means, how the procedure works, and what buyers can expect at each stage.
For international gold buyers engaging with suppliers in East Africa, Cost, Insurance and Freight (CIF) is the most commonly structured delivery arrangement. Understanding what CIF means, how the transaction process works, and what obligations fall on each party is essential for any buyer entering a formal gold procurement agreement.
What is CIF (Incoterms®)?
CIF is one of the Incoterms® trade terms published by the International Chamber of Commerce (ICC). Under CIF, the seller is responsible for:
- The cost of the goods themselves - Freight charges to the named destination port or airport - Insurance coverage for the shipment in transit
The buyer takes risk from the point of loading at the origin port or airport. For international gold buyers, CIF arrangements mean that the seller manages the logistics, customs clearance at origin, insurance, and freight — the buyer's primary obligation is to receive the shipment at their nominated destination and effect final payment.
The Orange Investments CIF Process
Orange Investments structures its gold export transactions under CIF Incoterms®, delivering to the buyer's nominated refinery or destination. The step-by-step procedure is as follows:
1. Letter of Intent (LOI): The buyer issues a formal LOI including their refinery details and KYC documentation. 2. Sales Agreement: Orange Investments issues a formal Sales Conditions and Draft Agreement. 3. Acceptance: The buyer signs, seals, and returns the agreement. 4. Initial Payment: The buyer remits 8% of the total consignment value, covering export permits, smelting, insurance, government taxes, royalties, documentation, and all export-related obligations. 5. Export Preparation: Orange Investments secures export permits, completes bar preparation and refining, arranges insurance, and organises shipment. 6. Dispatch: Shipment is dispatched to the buyer's nominated destination or refinery. 7. Arrival & Assay: Upon arrival, the gold is subjected to independent final assay at the buyer's facility. 8. Final Settlement: The buyer effects full balance payment based on the verified assay results.
The 8% Initial Requirement Explained
The 8% initial payment covers all export-related obligations, including: government royalties and statutory charges, refining and smelting, export permits and certifications, secure packaging and insurance, and freight and logistics handling. This structure allows Orange Investments to fully fund the export preparation process while the buyer's exposure is secured against the eventual gold delivery.
Assay-Based Final Settlement
A critical feature of this structure is that final payment is based on the assay results at the buyer's own refinery. This provides the buyer with independent verification of gold quality and quantity before committing the full purchase price — a significant protection for the buyer's interests.
Documentation Provided
Under a CIF transaction, Orange Investments provides: export permits, assay certificates, weight certificates, packing lists, insurance documentation, commercial invoice, and all required customs clearance documents.
Interested in Gold Procurement from Uganda?
Contact Orange Investments to discuss your gold sourcing requirements. We respond promptly to all serious enquiries from international buyers.