Incoterm rules, the international trade terms that are used for every international trades almost in every country. These are some rules that actually clears all the responsibilities conducted by sellers and buyers in an business. But the incoterms are not any agreements themselves, instead they help to conduct agreements of international trades. These give globally accepted definitions and rules of interpretations of goods from seller to buyer. The United Nations Commission on International Trade Law (UNICTRAL) accepted these terms as being the global standard for trade, and they are available in 31 languages through ICC.
In this part, we will acknowledge some incoterms that are set based on delivery at destination, duty, etc. So, not delaying more let’s get into the definitions.
- DAF – Delivered at Frontier: This term says that the seller will have to deliver when goods are placed at the disposal of the buyer on the arriving means of transport, not unloaded and cleared for export, but not cleared for import at the named place at the frontier, but before the customs border of the adjacent country. It will be used when delivering to a land frontier.
- DES – Delivered Ex Ship: This incoterm defines the responsibility of seller to deliver the goods to the buyer’s port before discharging. It can be applied to both inland and sea shipping.
- DEQ – Delivered Ex Quay: It is similar as DES. But there is an exception from DES and it is that the goods have to be placed at wharf. Otherwise, it can be used as the alternative to the DES. Both terms are replaced with DPU. Here, seller has to bear all the costs and risks of transport to the named port of buyer. But not cleared for import.
- DDU – Delivered Duty Unpaid: Here the specificity is that the seller bears all costs and risks involved in bringing the goods to the named place other than “Duty”. Duty covers the responsibilities for customs formalities and their payments, as well as taxes for import into the country of destination. The goods will be not cleared for import and, not be unloaded by arriving means of transport at the named place of destination.
- DDP – Delivered Duty Paid: The exception from DDU is that the seller has to carry out the responsibilities of customs formalities and payment of those also. It implies the maximum obligations to the seller.
- DAT – Delivered at Terminal (Named Terminal at Port of Destination): If transaction is carried out by following this term, then the seller has to pay for carriage to the terminal. But he doesn’t have to pay for import clearance and assumes all risks up to the point that the goods are unloaded at the terminal.
- DAP – Delivered at Place (Named Place of Destination): It is the same as the DAT but it is for the named place. It means that the seller pays for carriage to the named place.
Altogether, in conclusion, ICC rules for the use of domestic and international trade are mandatory to foster an open market and to ensure proper and translucent distribution of responsibilities in carrying out business worldwide.
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Writer,
Adri Sen,
Intern
Content Writing Department,
YSSE