Incolearn – Learning more about Incoterms 2000

DELIVERED AT FRONTIER (DAF) PART IV
– Summary and Conclusion
The International Chamber of Commerce (ICC) defines the ninth Incoterm, Delivered at Frontier (DAF), at a named place, as “the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport not unloaded, cleared for export, but not cleared for import at the named point and place at the frontier, but before the customs border of the adjoining country. The term “frontier” may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term”. Previously we introduced DAF and then considered the ten obligations that the seller and buyer might need to fulfil in terms of DAF as put forward by Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms. In accordance with the description of DAF, it can be used irrespective of the mode of transport when goods are to be delivered at a land frontier. If delivery is to take place in the port of destination, on board a vessel or on the quay (wharf), the DES or DEQ terms should be used. DAF is the first of the five D-terms also known as an arrival term, requiring the seller to hand over the goods to a nominated carrier free of risk and expense to the buyer. In summary, the seller’s primary duty is to deliver the goods at the named frontier, to provide a document to enable the buyer to take delivery at the frontier, or assist him in obtaining a through transport document and arranging export clearance. The buyer’s primary duty is to take delivery of the goods at the named frontier or assume responsibility for on-carriage, and to arrange for import clearance. The documents required in terms of the contract of sale should be the commercial invoice and the transport document or warehouse warrant. The other documents needed could be a through transport document and other documents needed for transit of the goods through any country or for import clearance. The three critical points of DAF are firstly, that the seller must arrange the carriage. Secondly, the risk transfers from the seller to the buyer when the goods have been delivered at the frontier, and thirdly, the cost transfers from the seller to the buyer when the goods have been delivered at the frontier. Next week’s issue will define the tenth Incoterm – Delivered Ex Ship (DES).