The seller bears all risks associated with the delivery of the goods and their unloading at the named destination. Therefore, in this term Incoterms Delivery and arrival at destination match. DPU is the only Incoterms term that requires the seller to unload the goods at their destination. Therefore, the seller should make sure that he can arrange unloading at the named place. If the parties assume that the seller will not bear the risk and costs of unloading, they should avoid using the term DPU, instead it is advisable to use DAP.
Parties are encouraged to determine their destination most precisely for several reasons.
Firstly, the risk of loss or damage to the goods passes to the buyer at this point of delivery / destination, and it is better for the seller and buyer to have a clear idea of the point at which this critical transition occurs.
Secondly, the costs to this place or point of delivery / destination are borne by the seller, and the costs after this place or point are borne by the buyer.
Thirdly, the seller must enter into a contract of carriage or arrange for the carriage of goods at an agreed place or point of delivery / destination.
Without doing this, the seller will violate his obligations under this term and will be liable to the buyer for any subsequent losses. For example, the seller will be responsible for any additional costs charged by the carrier to the buyer for any additional door-to-door transportation.
Under the terms of the DPU, if necessary, the seller performs the formalities necessary for export. The seller, however, is not obliged to fulfill the formalities necessary for import or transit through third countries after delivery, to pay import customs duties or to perform other customs formalities for import. As a result, if the buyer cannot organize the implementation of import clearance, the goods will be detained at the port or at the domestic terminal in the country of destination.
Who bears the risk of losses that may occur while the goods are held at the port of entry in the country of destination? The answer is the buyer, since the delivery has not yet been made, therefore the rule of paragraph B3 (a) applies, which stipulates that the buyer is at risk of loss or damage to the goods until transportation to the named internal point is resumed. If, in order to avoid such a scenario, the parties intend to entrust the seller with the formalities necessary for importation, the payment of import duties or taxes and the implementation of customs formalities for importation, they should consider using the term DDP.
Find out what to consider and do when choosing a DPUClose the list of actions with DPU
to clarify in detail the parameters and characteristics of the packages (including labeling), this is necessary for the subsequent customs clearance of goods;
clearly agree with the seller and determine the destination of the goods in the contract;
make sure that the seller is able to organize the unloading of goods at the destination;
agree with the insurance company the terms of insurance, if necessary;
This list is not complete and depends on the specific case, this term is not recommended to use if cargo it is planned to send further across Russia in container trains, since it is not exactly known which line will be shipped, which ultimately will increase the cost of the F / D transportation.
1. General obligations of seller and buyer under DPU conditions
A.1.The seller must provide the goods and commercial invoice -invoice in accordance with the contract of sale, as well as any other evidence of conformity that may be required by the terms of the contract. Any document provided by the seller may be in paper or electronic form, if agreed upon, and in the absence of an agreement, in accordance with business customs turnover.
V.1. The buyer must pay the price of the goods, as provided for in the contract of sale. Any document provided by the buyer can be in paper or electronic form, if agreed upon, and in the absence of an agreement, in accordance with the rules of business practice.
2.Supplied under DPU conditions
A.2.The seller must unload the goods from the arriving means of transport and deliver the goods by making them available to the buyer at the agreed point, if any, at the named place of destination or by providing goods delivered in this way. In any case, the seller must deliver the goods on the agreed date or within the agreed period.
V.2.The buyer must accept the delivery of goods delivered in accordance with paragraph A2.
3. Passage of risks under DPU conditions
A.3.The seller bears all risks of loss or damage to the goods until they are delivered in accordance with clause A2, with the exception of the risks of loss or damage under the circumstances specified in clause BZ.
V.3.The buyer bears all risks of loss or damage to the goods from the time of their delivery in accordance with paragraph A2. If: a) the buyer does not fulfill his obligations in accordance with paragraph B7, he bears all the risks associated with this loss or damage to the goods; or b) the buyer does not provide a notice in accordance with paragraph B10, he bears all risks of loss or damage to the goods, starting from the agreed date or from the end of the agreed delivery period, provided that the goods were explicitly individualized as a commodity, which is the subject of the contract.
4. Carriage under DPU conditions
The seller must, at his own expense, conclude or arrange the conclusion of a contract for the carriage of goods to the named place of destination or to the agreed point, if any, at the named place of destination. If a specific point is not agreed upon or cannot be determined on the basis of practice, the seller may choose the point most suitable for his purposes at the named place of destination.
The seller must comply with any safety requirements associated with transportation to the destination.
V.4.The buyer has no obligation to the seller to conclude a contract of carriage.
5.Insurance under DPU conditions
A.5.The seller has no obligation to the buyer to conclude an insurance contract.
V.5.The buyer has no obligation to the seller to conclude an insurance contract. However, the buyer must provide the seller at his request, at his own risk and expense, with the information necessary to obtain insurance.
6. Delivery document / transport document DPU conditions
A.6.The seller is obliged at his own expense to provide the buyer with a document allowing the buyer to accept the delivery of the goods.
V.6.The buyer must accept the delivery document provided in accordance with clause A6.
7.Export / import cleaning under DPU conditions
a) Export and transit clearance
If necessary, the seller must fulfill and pay all the formalities necessary for export and transit clearance required in the country of export and in any country of transit (other than the country of import), such as:
compliance with security requirements for export / transit;
pre-shipment inspection; and
any other official permission.
a) Assistance in the implementation of import clearance
If necessary, the seller must assist the buyer, at his request, at his own risk and expense, in obtaining any document and / or information regarding all the formalities required for import clearance, including the safety requirements and pre-shipment inspection required in the country of import.
a) Assistance in the implementation of export and transit clearance
If necessary, the buyer is obliged to assist the seller at his request, at his own risk and expense, in obtaining documents and / or information regarding all the formalities required for export / transit clearance, including the safety requirements and pre-shipment inspection required in the country of export and in any country of transit (other than the country of import).
b) Import cleaning
If necessary, the buyer must fulfill and pay all the formalities required in the country of importation, such as:
compliance with safety requirements for import;
pre-shipment inspection; and
any other official permission
8.Inspection / packaging / labeling under DPU conditions
A.8.The seller must pay the costs associated with the verification of the goods (quality control, measurement, weighing, counting) necessary for the delivery of goods in accordance with paragraph A2. The seller is obliged to ensure the packaging of the goods at his own expense, unless it is customary in the given trade industry to ship the sold goods without packaging. The seller must pack and label the goods in a manner appropriate to their transportation, unless the parties agree on specific packaging or labeling requirements.
V.8.The buyer has no obligation to the seller.
9 Cost allocation under DPU conditions
A.9.The seller must pay:
all expenses related to the goods and their transportation until the time of unloading and delivery in accordance with clause A2, with the exception of costs paid by the buyer in accordance with clause A7 (a);
the costs of obtaining the delivery document / transport document in accordance with paragraph A6;
if necessary, duties, taxes and any other costs associated with export or any transit clearance in accordance with paragraph A7 (a); and
the buyer all costs and fees associated with the provision of assistance in obtaining documents and information in accordance with paragraphs B5 and B7 (a).
V.9.The buyer must pay:
all expenses related to the goods from the moment of their delivery in accordance with clause A2;
to the seller all expenses and fees associated with the provision of assistance in obtaining documents and information in accordance with paragraph A7 (b);
if necessary, duties, taxes and any other expenses associated with import cleaning in accordance with paragraph B7 (b), and
any additional expenses incurred by the seller, if the buyer has not fulfilled his obligations in accordance with clause B7 or has not transmitted a notice in accordance with clause B10, provided that the goods have been clearly individualized as goods that are the subject of the contract.
10.Notification under DPU conditions
A.10.The seller must provide the buyer with a notice allowing the buyer to receive the goods.
V.10.If it is agreed that the buyer has the right to determine the time within the agreed period and / or the point of delivery at the named place of destination, the buyer must provide the seller with the appropriate notice.