Incolearn – Learning more about Incoterms 2000

DELIVERED EX SHIP (DES) PART III – The Buyer's Obligations The Internati onal Chamber of Commerce (ICC) defines the tenth Incoterm, Delivered E x Ship (DES), at a named port of destination, as “the seller delivers when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the named port of destination. The seller has to bear all the costs and risk involved in bringing the goods to the named port of destination before discharging. If the parties wish the seller to bear the costs and risks of discharging the goods, then the DEQ term should be used”. Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, identified ten obligations that the buyer might need to fulfil in terms of Delivered E x Ship: (1) the payment of the price; (2) licences, authorisations, and formalities; (3) contracts of carriage and insurance; (4) taking delivery; (5) transfer of risks; (6) division of costs; (7) notice to the seller; (8) proof of delivery, transport documents or equivalent electronic message; (9) inspection of the goods; and (10) other obligations. The payment of the price requires the buyer to pay the price stipulated in the contract of sale. In respect of the licences, authorisations and formalities the buyer is required at his own risk and cost to obtain such documentation and authorisation, and, if applicable, carry out all customs formalities for the importation of goods. The buyer has no obligation in respect of the contract of carriage and insurance. The buyer must take delivery of the goods when they have been delivered in accordance with the contract of sale. Regarding the transfer of risks the buyer bears all risks of loss of or damage to goods from the time they have been delivered in accordance with the contract of sale. In relation to the division of costs the buyer is responsible for all costs relating to their delivery and any additional costs incurred due to his failure to take delivery of the goods when they have been placed at his disposal in accordance with the contract of sale. Where applicable, all duties, taxes and other charges are payable upon import of the goods and for their transit through any country. The buyer must give sufficient notice to the seller of the time and/or point of taking delivery in the named port of destination. With regard to proof of delivery, transport documents or equivalent electronic message, the buyer must accept the delivery order or the transport document in accordance with the contract of sale. The buyer must pay the costs for the inspection of the goods except when the authorities of the country of export mandate such inspection. In terms of other obligations, the buyer must pay all costs incurred to obtain the relevant documentation and also reimburse the seller for any costs incurred in rendering such assistance. Next week’s issue we will provide a summary of the Delivered E x Ship (DES) term.