International Commercial Terms, also known as Incoterms, are updated every 10 years. In 2020, new rules for international commercial transactions will come into force, specifying the obligations and costs incurred by sellers and buyers. These terms are divided into several groups. D group includes a DAP rule, which stands for Delivered at Place.
Incoterms 2020 DAP – Allocation of costs
|The seller bears:||The buyer bears:|
|all costs relating to the goods and their transport until delivery (except for the costs incurred by the buyer);||costs related to the conclusion of the contract of carriage;|
|possible unloading costs;||any costs related to the goods from the moment of their delivery, and possible unloading costs;|
|export clearance costs;||import clearance costs;|
|costs of delivery of documents regarding transport.||possible costs incurred by the seller related to import formalities.|
What are the seller’s obligations?
- Seller provides commercial invoice and other required documents in paper or electronic form.
- He delivers goods ready for unloading at a named place and within the specified period.
- He takes responsibility for damage or loss of goods until they are delivered at the agreed point and time.
- The seller’s obligation is contracting or organizing the transport of goods at the indicated destination at his own cost. If such a place is not specified, the seller can choose the point that best suits this purpose.
- Seller operates according to all transport-related security requirements for transport to the destination.
- The seller has to carry out and pay for all export and transit clearance, as well as assist the buyer with import clearance.
- He has to count and weigh goods and, if required, pack the goods.
- He provides the buyer with documents authorizing the buyer to take over the goods.
- The seller is not obliged to make a contract of insurance.
What are the buyer’s obligations?
- Buyer pays the price of the goods as provided in the contract of sale.
- He takes up the delivery of the goods.
- Buyer has to accept documents provided by the seller for being enabled to take up the goods.
- He takes responsibility for damage or loss of goods from the time they have been delivered.
- Buyer has to carry out and pay for import clearance, as well as assist the seller with export clearance.
- Buyer informs the seller about the designated port/place of delivery, types of means of transport and date of delivery.
- The buyer is not obliged to make a contract of insurance but must provide information for this purpose at the seller’s request.
Delivery of goods
Implementing the DAP Incoterms rule means that the goods must be delivered at the named place. The seller is responsible for delivering the goods to the agreed place at the agreed time, while the buyer is responsible for unloading the goods.
Insurance of goods on the terms of Incoterms 2020 DAP
Both parties are not obliged to make a contract of insurance, but it is recommended.
Incoterms 2020 DAP in transport
DAP Incoterms rule is used for all types of transport. It can also be implemented using multimodal transport, i.e. combining several types of transport.
DAP and other Incoterms rules
The DAP rule is universal as it can be applied to any type of mode of transport.
Unlike as it is stated in the Incoterms 2010 DAP, from 2020 the seller is not obliged to provide information at the buyer’s request for obtaining insurance.
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