Detailed explanation of foreign trade transaction terms: EXW, FAS, DAP, DAT, DDP and their applications

In international trade, trade terms are one of the important agreements between buyers and sellers. It not only clarifies the delivery method of goods, but also determines the division of responsibilities, risks and expenses between the parties. This article will introduce in detail the common terms EXW, FAS, DAP, DAT and DDP.

EXW ex factory

EXW means Ex Works, which means that delivery is completed when the seller puts the goods at the buyer’s disposal at its location or other designated place. EXW is a term with minimal liability on the part of the seller and is applicable to domestic trade.

Seller’s Obligations

• Place the goods at the buyer’s disposal at the time and place specified in the contract.
• Assume all risks and expenses until the goods are disposed of by the buyer.
• Submit a commercial invoice or equivalent electronic record or proof of procedure.

Buyer Obligations

• Accept commercial invoices and other documents submitted by the seller, receive the goods at the time and place specified in the contract, and pay the price according to the contract.
• Bear all risks after receiving the goods and handle transportation and insurance procedures at your own expense.
• Obtain official export and import certificates at your own risk and expense, handle all customs procedures required for export and import of goods, and pay export and import duties and other related fees.

FAS Free Alongside Ship at Shipping Port

The full name of FAS is Free Alongside Ship, which means that the seller fulfills its delivery obligation by delivering the goods to the shipside designated by the buyer at the port of shipment after going through export customs clearance procedures.

Seller’s Obligations

• Deliver the goods stipulated in the contract to the ship designated by the buyer at the time and port of shipment specified in the contract, and notify the other party in a timely manner.
• Be responsible for all risks and expenses before the goods are delivered to the shipside at the port of shipment.
• Obtain official export documents at your own risk and expense, handle all customs procedures required for export of goods, and pay export-related taxes and fees.
• Submit commercial invoices and delivery documents, or equivalent electronic records or procedural documents.

Buyer Obligations

• Enter a contract to transport goods from the designated shipping port, pay the freight, and promptly notify the seller of the name of the ship, loading location, and required delivery time.
• Receive the goods and pay the price according to the time and place specified in the sales contract.
• Bear all risks and expenses incurred after receiving the goods, and handle insurance procedures at your own expense.
• Obtain an import license or other official import documents at your own risk and expense, and handle the customs procedures required for the import of goods.

DAP Delivery at Destination

DAP means that the seller completes the delivery obligation after transporting the goods to the designated delivery location without unloading the goods from the transport vehicle and handing the goods over to the buyer for disposal.

Seller’s Obligations

• Deliver the goods at the designated destination according to the delivery time stipulated in the contract, and notify the buyer in a timely manner.
• Responsible for entering into transportation contracts and paying freight.
• Bear all risks and expenses before delivery.
• Go through export procedures and bear all corresponding costs.
• Submit relevant documents required by the contract such as commercial invoices and delivery documents, or electronic recording program vouchers with equivalent functions.

Buyer Obligations

• Bear all risks and expenses after receiving the goods.
• Obtain an import license or other official import document at your own risk and expense, and handle the customs procedures required for the import of goods.
• Accept commercial invoices and other documents submitted by the seller, receive the goods at the time and place specified in the contract, and pay for the goods.

DAT delivery at destination or terminal at destination port

DAT stands for Delivered at Terminal, which means the seller completes the delivery after unloading the goods at the designated destination or terminal at the port of destination and handing over the goods to the buyer for disposal.

Seller’s Obligations

• Deliver the goods at the terminal at the designated location according to the time specified in the contract, and notify the buyer in a timely manner.
• Enter a transportation contract and pay the freight.
• Bear all risks and expenses before delivery.
• Go through export procedures and bear all corresponding costs.
• Submit relevant documents required by the contract such as commercial invoices and delivery documents, or electronic records or procedural vouchers with equivalent functions.

Buyer Obligations

• Bear all risks and expenses after delivery.
• Obtain an import license or other official import document at your own risk and expense, and handle the customs procedures required for the import of goods.
• Accept commercial invoices and other documents submitted by the seller, receive the goods at the time and place specified in the contract, and pay for the goods.

DDP delivery after duty paid

DDP stands for Delivered Duty Paid, which means that the seller completes the import customs clearance procedures at the designated destination and hands over the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery.

Seller’s Obligations

• Sign a transportation contract to transport the goods to the designated destination in the importing country according to usual routes and methods, and pay the freight.
• Place the goods at the buyer’s disposal at the time specified in the contract and at the designated destination in the importing country.
• Be responsible for all risks and expenses before the goods are disposed of by the buyer at the designated destination in the importing country.
• Obtain official export and import documents at your own risk and expense, handle all customs procedures required for export and import of goods, and pay export and import duties and other related fees.
• Submit relevant documents stipulated in the contract such as commercial invoices and delivery documents, or electronic records or procedural vouchers with equivalent functions.

Buyer Obligations

• Accept the relevant documents provided by the seller, receive the goods at the time specified in the contract and at the designated destination in the importing country, and pay the price according to the contract.
• Be responsible for all risks and expenses after receiving the goods at the designated destination in the importing country.
• Assist the seller to obtain official export documents and handle customs formalities required for the import of goods at the seller’s risk and expense.

The above is a detailed analysis of the five foreign trade transaction terms EXW, FAS, DAP, DAT and DDP. I hope it will be helpful to you.