Incoterms 2020 DPU Leave a comment

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Incoterms 2020 DPU

Incoterms rules help the seller and the buyer to determine the allocations of risk and costs at various stages of transport in international trade. Due to mistakes in the interpretation of the DAT (Delivered at Terminal) rule, the word “terminal” has been replaced by Incoterms 2020 DPU (Delivery at Place Unloaded). This video discuss what the change means. From Incoterm 2010 DAT to Incoterm 2020 DPU.

If you see our previously video, i need to say ,As usual, we also discuss from cost, obligation, delivery, insurance and conclusion to understand this term, OK do not waiting to let start the first section for allocation of costs.

Incoterms 2020 DPU – Allocation of costs

What’s the allocaton cost the seller must pay:
1. The seller pay the export and transit costs (outside the importing country): customs, taxes, export and transit permits, export security clearance and the cost of obtaining all official permits;
2. The seller pay the costs of control activities, such as quality control, measurement, weighing, counting, delivery of appropriately labeled packaging;
3. The seller pay the costs related to shipping and transport of the goods until they are unloaded and delivered to the buyer;
4. The seller pay the costs needed to obtain documents and information related to export and transit clearance;
5. The seller pay the costs related to concluding the contract of carriage.

What’s the allocaton cost the buyer must pay:
1. The buyer must pay the costs of import formalities: customs, taxes, import permits, import security clearance and costs of obtaining all official permits;
2. The buyer must pay the any additional costs if the buyer fails to fulfill its obligations stated in the contract;
3. The buyer pay the costs needed to obtain documents related to import clearance.

Incoterms 2020 DPU – Obligations

What are the seller’s obligations?
1. The seller need carrying out all the duties under the terms of delivery specified in the contract. This means delivery of the goods along with a commercial invoice in conformity with the contract of sale and other related documents.
2. The seller is responsible for unloading goods from arriving means of transport, and then delivering by placing them at the disposal of the buyer at the point agreed in the contract.
3. The seller is contracting the carriage of the goods.
4. The seller is providing the buyer, at his own expense, with all documents necessary to enable the buyer to take over the goods.
5. The seller is assisting the buyer at the buyer request, risk and cost in obtaining any documents necessary for transit and import clearance formalities.
6. The seller is packaging and marking the goods.
7. The seller is informing the buyer about matters related to receiving the goods.
8. The seller is unloading goods at the place of delivery.

So What are the buyer’s obligations?
1. The buyer is assisting the seller, at his request, risk and cost, in obtaining any documents necessary for the export and transit clearance formalities.
2. The buyer is carrying out and paying for import clearance.
3. The buyer is Informing the seller in advance of all safety requirements related to transport, ship name, loading point and possible delivery date within the period agreed in the contract.

Incoterms 2020 DPU – Delivery Of Goods, Insurance and Tranport

At first, Delivery.
DPU-Delivered at Place Unloaded” means that the seller delivers the goods, and at the same time, the risk and costs transfer to the buyer when the goods are unloaded from the arriving means of transport and handed over to the buyer. The place of delivery takes place at the destination indicated in the contract or at an agreed point.

In this case, the place or point of delivery and destination mean the same place. DPU is the only Incoterms rule that requires the seller to unload goods at the place of delivery. For this reason, the seller should ensure that buyer is able to organize unloading at the place specified in the contract.

How about the insurance?
In the case of DPU Incoterms, there is no obligation to make a contract of insurance.

Then is the Incoterms 2020 DPU Transport
The DPU rule can be used regardless of the type of transport used. This also applies to the use of more than one mode of transport.

Incoterms 2020 DPU Conclusion

Due to problems in the interpretation of the term “terminal” in the DAT Incoterms 2010 (Delivered at Terminal) rule, the DPU rule was created. It is because the destination terminal was confused with the customs terminal.

In DPU Incoterms, the seller should ensure that the buyer can organize unloading at the named place. If the parties intend the seller not to bear the risk and cost of unloading, it is recommended to avoid the DPU rule and use a DAP (Delivered at Place) instead.

OK, The DPU rule finished. Next Time we will discuss the last one rule, DDP, i love this rule, this is my favorite rule in Incoterm.

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DPU

A1 GENERAL OBLIGATIONS
The seller must provide the goods and the commercial invoice in conformity with the contract of sale and any other evidence of conformity that may be required by the contract.
Any document to be provided by the seller may be in paper or electronic form as agreed or, where there is no agreement, as is customary.

B1 GENERAL OBLIGATIONS
The buyer must pay the price of the goods as provided in the contract of sale.
Any document to be provided by the buyer may be in paper or electronic form as agreed or, where there is no agreement, as is customary.

A2 DELIVERY
The seller must unload the goods from the arriving means of transport and must then deliver them by placing them at the disposal of the buyer at the agreed point, if any, at the named place of destination or by procuring the goods so delivered. In either case the seller must deliver the goods on the agreed date or within the agreed period.

B2 TAKING DELIVERY
The buyer must take delivery of the goods when they have been delivered under A2.

A3 TRANSFER OF RISKS
The seller bears all risks of loss of or damage to the goods until they have been delivered in accordance with A2,with the exception of loss or damage in the circumstance described in B3.

B3 TRANSFER OF RISKS
The buyer bears all risks of loss of or damage to the goods from the time they have been delivered under A2.
If:
a) the buyer fails to fulfil its obligations in accordance with B7, then it bears all resulting risks of loss of or damage to the goods; or
b) the buyer fails to give notice in accordance with B10, then it bears all risks of loss of or damage to the goods from the agreed date or the end of the agreed period for delivery,
provided that the goods have been clearly identified as the contract goods.

A4 CARRIAGE
The seller must contract or arrange at its own cost for the carriage of the goods to the named place of destination or to the agreed point, if any, at the named place of destination. If a specific point is not agreed or is not determined by practice, the seller may select the point at the named place of destination that best suits its purpose.
The seller must comply with any transport-related security requirements for transport to the destination.

B4 CARRIAGE
The buyer has no obligation to the seller to make a contract of carriage.

A5 INSURANCE
The seller has no obligation to the buyer to make a contract of insurance.

B5 INSURANCE
The buyer has no obligation to the seller to make a contract of insurance. However, the buyer must provide the seller, at the seller´s request, risk and cost, with information that the seller needs for obtaining insurance.

A6 DELIVERY/TRANSPORT DOCUMENT
The seller must provide the buyer, at the seller´s cost, with any document required to enable the buyer to take over the goods.

B6 DELIVERY/TRANSPORT DOCUMENT
The buyer must accept the document provided under A6.

A7 EXPORT/IMPORT CLEARANCE
a) Export and transit clearance
Where applicable, the seller must carry out and pay for all export and transit clearance formalities required by the country of export and any country of transit(other than the country of import), such as:
• export/transit licence;
• security clearance for export/transit;
• pre-shipment inspection; and
• any other official authorisation.
b) Assistance with Import clearance
Where applicable, the seller must assist the buyer, at the buyer´s request, risk and cost, in obtaining any documents and/or information related to all import clearance formalities,including security requirements and pre-shipment inspection, needed by the country of import.

B7 EXPORT/IMPORT CLEARANCE
a) Assistance with export and transit clearance
Where applicable, the buyer must assist the seller at the seller´s request, risk and cost in obtaining any documents and /or information related to all export/transit clearance
formalities, including security requirements and pre-shipment inspection, needed by the country of export and any country of transit (other than the country of import).
b) Import clearance
Where applicable, the buyer must carry out and pay for all formalities required by the country of import, such as:
•Import licence;
•security clearance for import;
•pre-shipment inspection; and
•any other official authorisation.

A8 CHECKING/PACKING/MARKING
The seller must pay the costs of those checking operations (such as checking quality, measuring, weighing, counting) that are necessary for the purpose of delivering the goods in accordance with A2.
The seller must, at its own cost, package the goods, unless it is usual for the particular trade to transport the type of goods sold unpackaged. The seller must package and mark the good in the manner appropriate for their transport, unless the parties have agreed on specific packaging or marking requirements.

B8 CHECKING/PACKING/MARKING
The buyer has no obligation to the seller.

A9 ALLOCATION OF COSTS
The seller must pay:
a) all costs relating to the goods and their transport until they have been unloaded and delivered in accordance with A2, other than those payable by the buyer under B9;
b)the cost of providing the delivery/transport document under A6;
c)where applicable, duties, taxes and any other costs related to export and any transit clearance under A7(a); and
d) the buyer for all costs and charges related to providing assistance in obtaining documents and information in accordance with B5 and B7(a).

B9 ALLOCATION OF COSTS
The buyer must pay:
a) all costs relating to the goods from the time they have been delivered under A2;
b)the seller for all costs and charges related to providing assistance in obtaining documents and information in accordance with A7(b);
c)where applicable, duties, taxes and any other costs related to import clearance under B7(b); and
d) any additional costs incurred by the seller if the buyer fails to fulfil its obligations in accordance with B7 or to give notice in accordance with B10, provided that the goods have been clearly identified as the contract goods.

A10 NOTICES
The seller must give the buyer any notice required to enable the buyer to receive the goods.

B10 NOTICES
The buyer must, whenever it is agreed that the buyer is entitled to determine the time within an agreed period and/or the point of taking delivery within the named place of destination, give the seller sufficient notice.

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