The Treasurer’s Guide to Trade Finance

Chapter 6 The use of documents in trade

Term Seller Buyer

CIP

(Carriage and

Insurance

Paid To)

Used for

all forms of

transport.

Required to deliver the goods to a named port

located in the buyer’s own country.

Responsible for ensuring delivery of the goods

to the destination port. This includes paying

for all transit costs, as well as arranging export

clearance and any other export requirements.

Is obligated to arrange any transit insurance

for the goods.

Assumes any risk of loss

once the goods have been

loaded on board the ship at

the port of origin (or otherwise

been accepted for carriage).

Although the seller arranges

transit insurance, many

importers choose to arrange

their own insurance for the

goods in transit.

Takes control of the goods

at the destination port and is

responsible for managing the

import process.

Group D – Arrival Terms

Under these terms the seller is responsible for the delivery of the goods to their final destination.

The seller assumes all costs and risks involved in delivering the goods to their final destination.

Term Seller Buyer

DAP

(Delivered

at Place)

Used for

all forms of

transport.

Required to deliver the goods to a named destination, usually

in the buyer’s own country. (This term can be used for

delivery to any named place.)

Responsible for ensuring delivery of the goods to the named

destination point. This includes arranging export clearance

and any other export requirements.

Responsible for any loss or damage to the goods in transit, so

should arrange insurance (although are not required to do so).

Takes control of the

goods at the named

destination.

Manages the import

process, including the

unloading of goods,

and transportation

of the goods to their

final destination.

DAT

(Delivered

at Terminal)

Used for

all forms of

transport.

Required to deliver and unload the goods to a named

terminal (this can include a named warehouse or quay)

located in the buyer’s own country.

Responsible for ensuring delivery of the goods to the

terminal. This includes arranging export clearance and any

other export requirements.

Responsible for any loss or damage to the goods in transit, so

should arrange insurance (although are not required to do so).

Responsible for meeting the costs of unloading.

Takes control of the

goods at the terminal

and is responsible for

managing the import

process.

DDP

(Delivered

Duty Paid)

Used for

all forms of

transport.

Required to deliver the goods to the final destination selected

by the buyer.

Responsible for ensuring delivery of the goods to their final

destination. This includes arranging export clearance and

any other export requirements.

This is the only Incoterm which places responsibility for

managing the import process and paying costs of import on

the seller.

Responsible for any loss or damage to the goods in transit, so

should arrange insurance (although are not required to do so).

Takes delivery of the

goods at the final

destination.

Not responsible for

managing the import

process, but may

need to provide the

seller with certain

documents to

comply with import

regulations.