What is DAF? (Delivered at Frontier)

What does DAF stand for?

DAF stands for Delivered at Frontier, a trade term used in international commerce to specify the seller’s responsibility for delivering goods to a named frontier location, typically at the border of the importing country. Understanding the implications of DAF terms is crucial for importers and exporters to ensure smooth and efficient trade transactions while clarifying the respective obligations and risks associated with the delivery of goods.

Delivered at Frontier (DAF)

Delivered at Frontier (DAF) is an international trade term that defines the seller’s responsibility for delivering goods to a specified frontier location, typically at the border of the importing country. This section provides a comprehensive explanation of DAF terms, including its definition, obligations of the buyer and seller, transfer of risk, documentation requirements, and implications for importers and exporters engaged in global trade transactions.

Definition and Scope

1. Definition: DAF, as defined by the International Chamber of Commerce (ICC) in the Incoterms rules, signifies that the seller fulfills their obligation to deliver when the goods are placed at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place of destination on the frontier.
2. Scope: DAF terms are commonly used in international trade transactions involving overland transportation of goods between neighboring countries or regions with a shared border. The frontier location specified in the contract serves as the point where the seller’s delivery obligation is fulfilled, and the buyer assumes responsibility for further transportation and import customs clearance.

Obligations of the Buyer and Seller

1. Seller’s Obligations: Under DAF terms, the seller is responsible for delivering the goods to the named frontier location and arranging transportation to the designated point of delivery. The seller must bear the costs and risks associated with transporting the goods to the frontier, including export customs clearance, freight charges, and export documentation.
2. Buyer’s Obligations: Upon delivery of the goods at the frontier, the buyer assumes responsibility for unloading the goods from the arriving means of transport and completing import customs clearance procedures. The buyer is responsible for any costs and risks associated with transportation beyond the frontier, including import duties, taxes, and customs formalities.

Transfer of Risk and Title

1. Risk Transfer: The risk of loss or damage to the goods transfers from the seller to the buyer at the named frontier location specified in the contract. Once the goods are delivered at the frontier, the buyer assumes the risk of any loss or damage that may occur during further transportation and import customs clearance.
2. Title Transfer: Title to the goods typically transfers from the seller to the buyer at the named frontier location, indicating the point at which ownership rights and control over the goods pass from the seller to the buyer. However, the transfer of title may vary depending on the terms agreed upon in the sales contract.

Documentation and Formalities

1. Export Documentation: The seller is responsible for providing the necessary export documentation, such as commercial invoices, packing lists, and export licenses, to facilitate the transportation of goods to the frontier. These documents are essential for customs clearance and compliance with export regulations.
2. Import Customs Clearance: Upon arrival at the frontier, the buyer must complete import customs clearance procedures in accordance with the importing country’s regulations and requirements. This may involve submitting import declarations, paying import duties and taxes, and obtaining permits or licenses for restricted goods.

Implications for Importers and Exporters

1. Cost Allocation: DAF terms determine the allocation of costs and responsibilities between the buyer and seller for transportation, customs clearance, and risk management. Importers and exporters must carefully review DAF terms in their contracts to understand their financial obligations and liabilities.
2. Logistics Planning: Importers and exporters must coordinate logistics and transportation arrangements to ensure timely delivery of goods to the designated frontier location. Effective planning and communication with transport providers and customs authorities are essential to avoid delays and disruptions in the supply chain.

Notes to Importers

As importers engage in international trade transactions involving DAF terms, understanding the implications and requirements of Delivered at Frontier is essential for efficient customs clearance and logistics management. This section provides detailed notes for importers regarding their responsibilities and considerations when importing goods under DAF terms.

Customs Clearance Procedures

1. Import Declarations: Importers must submit accurate and complete import declarations to customs authorities at the frontier location, providing details of the imported goods, their value, origin, and intended use. Customs officials will assess import duties, taxes, and other charges based on the information provided.
2. Tariff Classification: Importers should ensure correct tariff classification of imported goods to determine applicable customs duties and taxes. Classification errors can lead to delays in customs clearance and potential penalties for non-compliance with import regulations.

Transportation and Logistics

1. Transportation Arrangements: Importers are responsible for arranging transportation of goods from the frontier location to their final destination, whether by road, rail, or other means of transport. They must coordinate logistics with transport providers to ensure timely delivery and minimize transit times.
2. Insurance Coverage: Importers should consider obtaining cargo insurance coverage to protect against the risk of loss or damage to goods during transit from the frontier to the final destination. Insurance coverage provides financial protection and peace of mind against unforeseen events.

Compliance with Regulations

1. Customs Compliance: Importers must comply with import regulations and requirements of the importing country when clearing goods at the frontier. This includes adhering to import restrictions, licensing requirements, and customs procedures applicable to specific categories of goods.
2. Sanitary and Phytosanitary Standards: Importers should ensure compliance with sanitary and phytosanitary (SPS) standards for imported food, agricultural, and healthcare products. Goods subject to SPS regulations may require inspection and certification by relevant authorities to ensure compliance with health and safety requirements.

Sample Sentences

1. “The importer arranged for the transportation of goods to the frontier under DAF terms, where the seller’s responsibility for delivery ends, and the buyer assumes responsibility for customs clearance and further transportation.”

• Meaning: In this sentence, DAF signifies the trade term under which the importer arranged transportation of goods to the frontier, indicating the point at which the seller’s delivery obligation is fulfilled, and the buyer assumes responsibility for customs clearance and further transportation.

2. “Customs authorities conducted inspections of goods at the frontier under DAF terms to verify compliance with import regulations and assess applicable duties and taxes before granting clearance for entry into the importing country.”

• Meaning: Here, DAF denotes the trade term under which customs authorities conducted inspections of goods at the frontier to ensure compliance with import regulations and determine applicable duties and taxes, highlighting the importance of compliance with DAF terms for customs clearance.

3. “The importer received notification from the seller that goods had been delivered at the frontier under DAF terms, prompting the initiation of import customs clearance procedures and coordination of transportation to the final destination.”

• Meaning: This sentence illustrates the importer’s receipt of notification from the seller regarding the delivery of goods at the frontier under DAF terms, signaling the start of import customs clearance procedures and logistical arrangements for transportation to the final destination.

4. “Upon arrival at the frontier under DAF terms, the importer assumed responsibility for unloading goods from the transport vehicle and completing import customs formalities to facilitate clearance for entry into the importing country.”

• Meaning: In this context, DAF indicates the trade term under which the importer assumed responsibility for unloading goods from the transport vehicle and completing import customs formalities at the frontier, emphasizing the transition of responsibilities from the seller to the buyer.

5. “The importer engaged a customs broker to assist with import customs clearance procedures at the frontier under DAF terms, ensuring compliance with regulatory requirements and expedited processing of goods.”

• Meaning: Here, DAF signifies the trade term under which the importer engaged a customs broker to facilitate import customs clearance procedures at the frontier, demonstrating the importer’s commitment to compliance and efficient processing of goods.

Other Meanings of DAF