“Delivered at Frontier” (DAF) is a trade term used in international commerce that specifies the obligations of the seller to deliver goods to a designated frontier or border location. It is part of the Incoterms (International Commercial Terms) established by the International Chamber of Commerce (ICC). These terms define the responsibilities of sellers and buyers in the delivery of goods.
Responsibilities under DAF
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Seller’s Obligations:
- Risk and Cost: The seller bears all risk up to the point of delivery at the frontier.
- Transport Costs: Responsible for all costs associated with transporting the goods to the border location.
- Export Clearance: Handles all export-related documentation and clearances.
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Buyer’s Obligations:
- Import Duties and Taxes: Responsible for import duties, taxes, and any fees once the goods reach the frontier.
- Further Transport: Manages transport from the frontier to the final destination.
How DAF Works
Delivery Process
- Preparation and Packing: The seller prepares and packs the goods, ready for international shipment.
- Transportation to Border: The seller arranges and pays for the transportation of goods to the agreed-upon frontier location.
- Export Clearance: The seller ensures all export documentation and clearances are in place.
- Transfer of Risk: Risk transfers to the buyer at the border location.
- Import Handling: The buyer manages importation, including duties and further transportation.
Example Scenario
A manufacturer in Germany sells machinery to a buyer in Poland under DAF terms. The seller arranges for transport and delivers the machinery to the German-Polish border. The buyer is then responsible for handling import duties and transporting the machinery from the border to their facility in Poland.
Historical Context
The term Delivered at Frontier (DAF) was included in the Incoterms starting from the 1953 version. It was widely used for land transportation across international borders where the seller’s responsibility ends at a specific frontier. However, it has since been replaced by more contemporary terms in the latest versions of Incoterms, specifically Incoterms 2010, and is now considered obsolete.
Applicability in International Trade
Even though DAF is no longer in active use, understanding its principles is beneficial for grasping the historical context of Incoterms. It is particularly useful in scenarios involving complex border logistics and customs processes where the division of responsibilities is critical.
Comparisons with Related Incoterms
- Delivered Duty Paid (DDP): The seller bears all risks and costs up to the buyer’s location, including import duties and taxes.
- Ex-Works (EXW): The buyer bears all risks and costs from the moment goods leave the seller’s premises.
- Free Carrier (FCA): The seller delivers goods to a terminal or another named place with initial transportation risks and costs covered.
Related Terms and Definitions
- Incoterms: Standardized international trade terms that define responsibilities of buyers and sellers.
- FOB (Free on Board): The seller fulfills delivery obligations once the goods pass the ship’s rail at the port of shipment.
- CFR (Cost and Freight): The seller covers costs and freight to the named port of destination, but the risk transfers once goods are on board the ship.
FAQs
Q1: Why is DAF no longer in use? A: DAF has been replaced by more current Incoterms like DAP (Delivered at Place) which offer clearer responsibilities and are more suited to modern logistics.
Q2: What should I use instead of DAF for current trade? A: For equivalent terms, use DAP (Delivered at Place) or DAT (Delivered at Terminal) depending on your specific delivery needs.
Q3: Are there any legal implications of using outdated Incoterms like DAF? A: Using outdated terms can lead to misunderstandings and disputes. It’s recommended to use the latest Incoterms for clarity and legal security.
References
- International Chamber of Commerce (ICC) – Incoterms® 2020.
- “International Trade and Customs Law” by Raj Bhala.
- “Incoterms® Explained” – Shipping Solutions Blog.
Summary
Delivered at Frontier (DAF) was a widely-recognized Incoterm for cross-border deliveries, defining the seller’s responsibility to deliver goods to a frontier location. Although now obsolete, understanding DAF aids in comprehending the evolution of international trade terms and logistics management, essential for modern trade practices.
