(Tiểu luận) the comparation between dap and fob rules for delivery

Index INTRODUCTION I DAT - DELIVERY AT TERMINAL 1, Definition 2, How Delivery at Terminal work? 3, Obligation 4 Benefits of DAT 5 Backdraw of DAT Parties’ responsibility 7, Example 10 II DDU- Delivered Duty Unpaid .12 1, Definition 12 How Does DDU Work? 12 Responsibilities Under Delivered Duty Unpaid (DDU) 13 Seller Obligations vs Seller Obligations Under DDU 13 Advantages and Disadvantages of Delivered Duty Unpaid (DDU) 14 III DDP - Delivered Duty Paid 16 Definition 16 How does Delivered Duty Paid work? 16 Obligations 17 Benefits 26 Backdraw 26 Paties’ responsibility .27 7.Difference Between DDU and DDP 27 Example 28 IV DAP - Delivery at Place 29 1, Definition 29 2, How Delivery - at – Place works ? .29 3, Obligations 30 4, Benefits of DAP 32 5, Backdraws of DAP 32 6, Parties' responsibility 33 7, Example 34 V THE COMPARATION BETWEEN DAP AND FOB RULES FOR DELIVERY 35 CONCLUSION 36 REFERENCES 37 INTRODUCTION The International Chamber of Commerce have published new Incoterms 2020 that have come into effect from the 1st of January 2020 The ICC originally published Incoterms® in 1936 and have continually made updates to reflect the changes to the Global Trade environment It’s important that all parties involved in trade clearly understand the changes and how they apply to global supply chains Incoterms play such a vital role in the world of global trade Incoterms 2010 or Incoterms 2020 may seem complicated, but it’s imperative that buyers and sellers clearly understand how they work and their own obligations along the supply chain In this article we explain the updates made and provide simple explanations, along with an Incoterms infographic to explain Incoterms 2020 Incoterms are referred to as International Commercial Terms They are a set of rules published by the International Chamber of Commerce (ICC), which relate to International Commercial Law According to the ICC, Incoterms rules provide internationally accepted definitions and rules of interpretation for most common commercial terms used in contracts for the sale of goods’ All International purchases will be processed on an agreed Incoterm to define which party legally incurs costs and risks Incoterms will be clearly stated on relevant shipping documents DAP,DPU,DDP,DAT is in Incoterms 2020 Group D Incoterms rules have been revised in 2000, 2010, and 2020, to ensure that the trade terms are clearer I DAT - DELIVERY AT TERMINAL 1, Definition Under Incoterms 2020, the rule formerly called Delivered at Terminal (DAT) is now referred to as Delivered at Place Unloaded (DPU) Delivered At Terminal refers to the seller delivering the goods, once unloaded from the arriving means of transport Goods are placed at the disposal of the buyer at the named terminal, at the named port or place of destination DAT is used irrespective of the mode of transport selected and may also be used where more than one mode of transport is utilized The specific point within the terminal at the place of destination should clearly be specified as agreed upon DAT requires the seller to clear goods for export, where applicable, without any obligation to clear the goods for import, pay import duty or carry out import customs formalities 2, How Delivery at Terminal work? The named terminal is usually at the end destination in the buyer’s country It can be a quay, a warehouse, or a container yard In addition, the named terminal can also be designated at a road, rail, or air cargo terminal In DAT, the location where the seller must deliver the goods should be precise Typically, cargo terminals and ports can be large and difficult to navigate Therefore, the seller must know exactly where they are supposed to deliver the goods inside the terminal The seller must unload the goods once the shipment has arrived at the named terminal Under DAT, the seller is responsible for paying for all expenses until the goods are unloaded at the named terminal This means that the seller pays for the export licences, clearance, and duty After the goods have been unloaded, the seller can consider his responsibility complete, and the risk transfer occurs from the seller to the buyer And the buyer is responsible for paying for import customs formalities such as import duties and tax at the destination port The DAT Incoterm was specifically designed to meet airport and port deliveries 3, Obligation Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Main carriage o Delivery at named terminal at port or place of destination o Proof of delivery Buyer’s Obligations o Onward carriage o Import formalities and duties o Cost of pre-shipment inspection o Delivery to buyer Benefits of DAT The key advantages of Delivery at Terminal are around convenience and reduced risk to the importer: The supplier delivers goods to the destination place (importer doesn’t need to cover these costs) The risk is transferred from the supplier to the importer once the goods have been dispatched and unloaded at a defined place at the destination The supplier bears the responsibility for most of the carriage/transport of the goods from the origin to the destination Less hassle and organization for the buyer of good Backdraw of DAT The disadvantages of DAT lie with the seller as they have to arrange the entire main carriage They also have to arrange the export customs formalities and unload the goods at the delivery terminal The DAT Incoterm might also be disadvantageous to the buyer as, although the seller arranges the main carriage, the shipment costs are priced into the costs of the goods As a result, the seller has no incentive to keep the cost of the shipment low, and the buyer usually ends up paying higher prices Parties’ responsibility Seller’s Responsibilities Buyer’s Responsibilities include: Cost Payment terms for the seller Warehouse charges: for maintaining goods till they are delivered Packaging charges: for marking and labeling goods as per export standards Costs borne by the buyer include: Inland transportation: for loading and transporting goods till the first port Port charges: for port clearing procedures Deport charges: for port duties Inland transit charges: for transportation from the port to the warehouse Freight forwarding charges: the freight forwarding agent’s fee for handling logistics Custom charges: for export customs proceedings Custom charges: for import customs Warehouse charges: for maintaining goods after the delivery of goods by the seller Documentation charges: for preparing and submitting necessary documents required for the shipping process Delivery till terms The seller has responsibilities the nominated place, which can be a port, but generally tends to Under DAT terms, the buyer must accept the proof of be a quay, warehouse, documents provided by the assembly unit etc and this is one of the key differentiating factor from the seller at the destination port He shall receive the goods DAP 2020 incoterm, so the buyer delivered at the port stays liable for the main freight proceedings The seller's duty stays till the delivery of goods at the first nominated Risk tranfer The risk of goods stays with the seller till the appointed place of port He stays liable for any risk related to damage of goods till they are unloaded at the nominated port The risk of goods transfers to the buyer after the delivery Also, if the buyer fails to instruct the seller in reference to the nominated port, the risk and damage will be borne by him/her Insurance Since the entire freight responsibility rests with the seller, he is liable for insurance coverage till the nominated place of port He'll bear all the insurance charges during the course; in the case of sea/ocean freight, he’ll have to take marine insurance for goods As the carriage duty rests with the seller, insurance is his responsibility The buyer has no obligation to insurance Duty and The seller has duties towards clearance export customs proceedings He stays responsible for preparing all necessary documents Payment for port charges and customs clearing procedure, duties, and local charges are As the duties transfer at the nominated harbor, the buyer is responsible for import customs and duties He remains liable for all payment charges and risks thereafter This is where the difference between DAT borne by him incoterms & DDP shipping incoterms of 2020 are clearly delineated, under DDP, the responsibility of the duties, payments & documentation remain with the seller itself Acquiring all necessary documents provided by the seller at the appointed port and carrying out further import proceedings are a part of his responsibilities 7, Example A Canadian buyer buys automobile spare parts from China and the parts will be transported under ‘DAT’ to a facility at the terminal in Canada In this case, the Chinese clear the spare parts through customs at the China port, and take care of the bills covering the cost of carriage and insurance up until safe delivery in Canada After successful unloading at the Canadian port facility, the responsibility and risks are duly transferred to the Canadian buyer He will see to the completion of the delivery process II DDU- Delivered Duty Unpaid 1, Definition Delivered Duty Unpaid (DDU) is an old international trade term indicating that the seller is responsible for the safe delivery of goods to a named destination, paying all transportation expenses, and assuming all risks during transport How Does DDU Work? Under the terms of DDU, the seller is required to deliver goods to the agreed-upon destination in the country of importation The buyer would then be responsible for the rest of the costs and further delivery of the shipment unless other terms have been laid out ahead of time Responsibilities Under Delivered Duty Unpaid (DDU) According to DDU arrangements, the seller secures licenses and takes care of other formalities involved in exporting a good; it is also responsible for