| Notes and risk factors in cargo insurance | [German version] |
Table of contents
Introduction
This section illustrates the many-faceted nature of risk analysis in cargo insurance.
Risk analysis is one of the marine insurer’s core activities and is characterized by the apparent contradiction between generally applicable, objective factors, on the one hand, and individual experience and subjective interpretation, on the other. It is this non-standardized pattern of work which essentially distinguishes this sector of the insurance industry from those insurance sectors backed by collective agreements.
However, the aim of this section is not to describe the complexities of risk analysis and premium setting because, precisely for the above-stated reasons, it is almost impossible to make generally valid, universal statements in this respect.
It is even difficult to decide which items of information are of the essence to the transport insurer.
Essential risk factors are stated below and one possible way of listing them is outlined. This list is not exhaustive and selection of the relevant factors in each particular case, which are in line with the user’s information requirements, is determined on a case by case basis.
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Policyholder
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Name, legal form, year of formation, domicile, number of employees |
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Branch offices |
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Description of business, position in goods process, for example |
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New or existing customer |
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Enquiry to previous insurer with customer’s consent (e.g. insured amount, amount of claims, number of claims) |
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Other company information, for example |
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Cargo type
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Raw, semifinished, finished products |
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General cargo, for example |
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Break-bulk cargo, for example |
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Bulk cargo, for example |
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Liquid cargo, for example |
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Dangerous goods, for example |
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Temperature-controlled goods, for example |
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Foodstuffs, for example |
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Living animals / plants |
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Producer and capital goods, for example |
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Heavy-lifts, for example |
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Bulky goods |
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Prototypes, samples, molds, models |
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Trade fair or exhibition goods |
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Cargo properties
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New or used cargo |
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State of aggregation (solid, liquid, gaseous) |
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Size (dimensions, weight, volume) |
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Center of gravity (e.g. high, central or eccentric) |
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Other hazard potential (e.g. dangerous goods properties) |
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Sensitivity, for example |
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Risk of theft, for example |
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Time-sensitive goods |
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Insured transport and storage operations
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Imports |
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Exports |
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Purchases |
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Shipments |
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Returns |
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Own transport |
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In-house transport |
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Intermediate transport/storage |
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Processing transport/storage |
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Drop shipments |
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Transport of capital goods |
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Transport volume / annual turnover (broken down by branch offices / countries) |
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Route and duration of transport / Logistics
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Ongoing policy: scope, transport connections | |
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Individual policy: point of departure and destination | |
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House-to-house or terminal-to-terminal | |
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Transshipment points | |
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Duration of travel | |
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Timetable, schedule | |
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Interfaces | |
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Infrastructure | |
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Administrative conditions (e.g. specified routes or transport operations requiring official approval) | |
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National regulations (e.g. import regulations, customs rules, embargoes) | |
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Port conditions, for example | |
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Precarriage, main carriage and onward carriage, for example | |
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Climatic influences, for example | |
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Political conditions, for example | |
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Combined transport: | |
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Intramodal transport, for example | |
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Intermodal or multimodal transport, for example | |
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Storage
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Planned or transport-determined storage | |
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Intermediate storage | |
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Customs warehouse procedure | |
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Duration of storage | |
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Warehouse size, for example | |
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Own or third-party storage | |
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Inside or outside storage | |
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Type of storage by product / structure: | |
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General cargo storage, for example | |
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Bulk cargo storage, for example | |
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Liquid storage facilities, for example | |
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Gas storage facilities, for example | |
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Storage facilities: | |
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Static warehousing, for example | |
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Dynamic warehousing, for example | |
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Storage operation, e.g. manual, mechanical, automatic | |
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Storage principles, e.g. FIFO (first in, first out), LIFO (last in, first out) | |
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Address of storage facility | |
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Protective measures, for example | |
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Local environment | |
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Necessity of storage facility inspection | |
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Means of transport and transport service providers
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Own or third-party means of transport | |
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Specialist or in-house forwarding, postal or courier service | |
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Suitability of service providers involved in transport operation (use of subcontractors) | |
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Direct or interrupted transport | |
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Full Container Load (FCL), Less than Container Load (LCL) | |
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FCL->FCL, FCL->LCL, LCL->FCL, LCL->LCL | |
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Dangerous goods stipulations and regulations, for example | |
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Containers: | |
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ISO containers, for example | |
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Inland containers, for example | |
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Air freight containers, for example | |
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Swap-bodies | |
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Inspection of containers in accordance with CSD and ACEP | |
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Pallets, for example | |
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Motor vehicles, for example | |
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Rail vehicles, for example | |
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River and inland waterway vessels, for example | |
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Ocean-going vessels: | |
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Name, shipowner (ISM code/White List, Lloyd’s Shipping Index) | |
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Age, class | |
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Flag | |
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Deadweight | |
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Ship types, for example | |
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Aircraft, for example | |
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Other means of transport, for example | |
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Packaging
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Fit-for-purpose packaging | |
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Packaging regulations, for example | |
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Own or third-party packer | |
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Standardized, tested or standard packaging | |
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Disposable or returnable packaging | |
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Special packaging, e.g. for transporting works of art, heavy-lifts, prototypes | |
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Formation of load units | |
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Inner packaging, for example | |
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Outer packaging: | |
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Packaging materials, for example | |
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Packaging containers, for example | |
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Packaging aids, for example | |
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Marking, handling instructions acc. to DIN 55402 / ISO 780 | |
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Area module/area module multiple – (modular system) | |
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For wooden packaging: phytosanitary certificate, fumigation certificate | |
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Stackability | |
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Printed/promotional messages | |
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Packing, Stowage, Cargo handling, Unpacking
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Own or third-party staff | |
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Deck loading or below deck loading | |
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Handling types and methods, for example | |
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Ramps, for example | |
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Conveying equipment: | |
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Ground conveyors, for example | |
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Lifting gear or cranes, for example | |
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Continuous conveyors, for example | |
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Load suspension devices, for example | |
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Cargo securing | |
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Cargo securing equipment and aids, for example | |
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Cargo securing guidelines and recommendations, for example | |
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Combined loading prohibitions acc. to dangerous goods regulations | |
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Goods inwards and outwards inspection | |
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Inspection of means of transport and transport receptacles before packing | |
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Policy maximums / Insurance value / Expenditure and costs
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Policy maximums, for example | |
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Insurance value consisting of, for example | |
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Insurable expenditure and costs, for example | |
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Insurance cover
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References for determining conditions: | |
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DTV cargo insurance conditions 2000 (German/English) | |
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Institute Marine Cargo Clauses | |
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Full cover / restricted cover | |
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Clauses and special conditions, written conditions | |
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Contingency insurance (DIC/DIL) | |
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Consequential losses arising from damage to goods and financial losses | |
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Own risk (non-deductible and deductible excess) | |
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Possible actions in the event of an incident of loss
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Expert loss minimization and assessment on site by loss adjuster (determination of loss) | |
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Working up/ (re)utilization of damaged cargo | |
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Repair in country of destination | |
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Return of reparable cargo to manufacturer | |
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Purchase of spare parts | |
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Utilization of damaged or imperfect branded goods | |
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Options for recourse
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Liability scheme | |
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Scope of liability | |
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Liability limits | |
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Amount of liability | |
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Ad hoc agreements | |
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Waiver of recourse | |
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Loss prevention measures / recommendations
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Use of own know-how or specialists (internal/external) | |
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Packaging advice | |
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Inspection of packing, stowage and unpacking | |
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Testing of suitability of means of transport | |
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Monitoring of transport operation, for example | |
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Expert loss prevention on site by loss adjuster | |
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Special shipping instructions, for example | |
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Measures taken under high risk conditions, for example | |
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Other
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Terms of delivery, Incoterms | |
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Countries with restrictive practices | |
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Special legal provisions | |
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Certificate of origin | |
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Customs rules | |
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