In the latest edition of Incoterms published by the ICC, four D terms (DDU, DEQ, DES, and DAF) have been removed and replaced with two others (DAP and DAT). Under Group D Incoterms, the points of delivery and risk transfer coincide, and the delivery point or destination is located in the buyer’s country. The seller assumes the greatest responsibility and risk for transporting and delivering the goods. The three Group D Incoterms are explained below.
DAT (Named Terminal or Destination)
- Short for Delivered at Terminal
- Meaning: Delivery at the terminal (named terminal or destination)
- Examples: Sea freight: DAT Singapore Port, Pier 10, Singapore; Air freight: DAT Swissport Terminal, Frankfurt, Germany
Under DAT, the seller pays all costs incurred up to the destination, while the buyer pays customs clearance costs and taxes at the destination. As with all D terms, responsibility and risk transfer from the seller to the buyer at the named final destination.
DAT is used when the seller must transport the goods and pay all costs up to the destination port. These costs include export clearance in the country of origin, taxes, customs duties, cargo insurance up to the destination, loading in the country of origin, and unloading at the specified location in the destination country. However, import clearance costs, taxes, and duties in the destination country are borne by the buyer.
Seller’s Responsibilities
- Provision of goods: Deliver the goods to the agreed location and provide the buyer with the invoice, other documents or their electronic equivalents, and proof of delivery.
- Certificates: Obtain the certificates and permits required to export the goods from the country of origin.
- Carriage and insurance: Arrange the contracts of carriage and insurance.
- Delivery: Transport the goods to the destination terminal or port and deliver them at the specified time and place.
- Transfer of risk: Risk transfers upon delivery at the destination terminal, after unloading.
- Costs: Pay for loading at origin, export clearance, and carriage to the destination.
- Provide a delivery receipt.
Buyer’s Responsibilities
- Receive the goods at the agreed time and place.
- Assume responsibility and risk once the goods have been unloaded at the agreed location.
- Clear the goods for import and pay taxes and customs duties.
- Accept the delivery receipt documents.
DAP (Named Place of Destination)
- Short for Delivered at Place
- Meaning: Delivery at the named place
- Example: DAP Patagonia Clothing warehouse, 222 Central Ave, Ventura, CA, USA
The seller must load and transport the goods to the agreed location, which is generally beyond the port or terminal in the destination country. The seller must handle export clearance and pay taxes and customs duties in the country of origin. The corresponding formalities and costs in the destination country, as well as unloading at the destination, are the buyer’s responsibility.
DAP and DAT differ in the delivery location and responsibility for unloading. Under DAP, delivery takes place beyond the terminal, and the buyer is responsible for unloading. Under DAT, delivery takes place at the terminal, and unloading is the seller’s responsibility.
Seller’s Responsibilities
- Provide a delivery receipt and the certificates and documents required to export the goods.
- Arrange carriage and insurance contracts, pay the associated costs, and transport the goods.
- Pay export duties and taxes.
- Provide the documents the buyer needs for customs clearance in the destination country.
Buyer’s Responsibilities
- Pay for the goods according to the contract.
- Obtain the certificates and documents required for import.
- Take delivery of the goods at the specified place and time.
- Unload the goods at the destination and bear all subsequent costs and risks.
DDP (Named Place of Destination)
- Short for Delivered Duty Paid
- Meaning: Delivery with duties paid at the named destination
- Example: DDP 445 Ocean Road, Sydney, Australia
- Modes of transport:
Under DDP, the seller assumes all responsibilities and costs for transporting the goods until delivery at the named destination. These include customs clearance and formalities at both origin and destination, the associated charges, loading at origin, unloading at the named destination, and carriage costs.
The buyer bears no risks until the goods are unloaded at the named destination, usually the buyer’s factory. The seller is responsible for all risks and costs until unloading.
Seller’s Responsibilities
- Provide a delivery receipt and the certificates and documents required to export the goods.
- Arrange carriage and insurance contracts, pay the associated costs, and transport the goods.
- Pay carriage and insurance costs to the destination, as well as export duties and taxes in the country of origin.
- Pay import duties and taxes, complete customs formalities at the destination, and clear the goods.
Buyer’s Responsibilities
- Pay for the goods according to the contract.
- Obtain the documents required to import the goods.
- Take delivery of the goods at the specified place and time.
- Pay pre-shipment inspection costs.
- Pay unloading costs.
