Incoterms 2020: DAP, DPU and DDP
Any mode, not just the ship
DAP, DPU and DDP can be used with any mode of transport. They are not FOB, CFR or CIF. Risk does not pass “on board” under these three rules. It passes at the named place of destination, and the exact moment depends on which of the three rules the contract uses. A credit that copies “CIF Dhaka” for a truck move is using a sea rule for an inland place. Say so in the drafting note. Do not silently rewrite the applicant’s contract.
DAP
Under DAP the seller delivers when the goods are placed at the buyer’s disposal at the named place, on the arriving means of transport, ready for unloading. The seller bears risk until that moment and does not have to unload. The buyer unloads, carries out import clearance, and pays import duties. The seller does not clear the goods for import. A Bangladesh buyer who agreed DAP and then expects the foreign seller to pay customs duty has misread the rule.
DPU
DPU replaced DAT. The seller delivers only when the goods have been unloaded from the arriving means of transport at the named place. The seller bears the risk until unloading is finished and must do the unloading. The buyer still handles import clearance and import duties. Unloading and customs clearance are different jobs. A terminal that will not let the seller’s carrier unload until duty is paid is an operational problem. It does not move the import-clearance duty onto the seller.
DDP
Under DDP the seller delivers when the goods are placed at the buyer’s disposal at the named place, cleared for import, ready for unloading. The seller bears risk up to that point and carries out import clearance. The buyer unloads. DDP is the rule that puts import formalities on the seller. It is also the rule that is often impossible for a foreign seller who cannot be the importer of record in Bangladesh. If the applicant cannot explain who will file the bill of entry, do not treat the word DDP as solved.
Credit documents
These rules do not list the LC documents. Clearance, duty payment, and unloading may need certificates or forwarding documents if the credit asks for them. If the credit does not ask, UCP 600 Article 14 tells the bank not to invent non-documentary conditions. Link the Incoterm to the sale contract. Link the document list to the credit. Name the place in full, because “DAP Bangladesh” is not a complete Incoterms 2020 term.
Source
ICC, Incoterms 2020, rules DAP, DPU and DDP. Summary of delivery, unloading and import clearance. iccwbo.org. Open the cited source.
Frequently asked questions
Who clears import under DAP?
The buyer. The seller delivers when the goods are placed at the buyer’s disposal at the named place, ready for unloading, and does not clear the goods for import.
Who unloads under DPU?
The seller. Delivery happens when the goods have been unloaded at the named place. The seller bears risk until then. The buyer still clears import.
Who clears import under DDP?
The seller. The seller delivers cleared for import, ready for unloading. The buyer unloads. DDP makes the seller responsible for import formalities.