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Is it Safe to use DP terms in Export Business?

DP OR DAP is a term of payment in international trade. D.A.P or D/P means Documents Against Payment. Cargo shipped out from the supplier’s premises is handed over to a carrier who carries it to the final destination of the buyer after completing the necessary export documentation of the exporting country. When goods are delivered to the exporter, the carrier or his agent issues a Bill of Lading (for sea shipments) or Airway Bill (for air shipments). Know more about payment terms with an online export import course and start a risk-free business. A complete set of documents, including a bill of lading/airport bill, an invoice, a packing list, and a bill of exchange, is submitted to the bank for delivery to the buyer via the buyer’s bank. Upon verification, the seller’s bank sends these shipping documents to the buyer through the buyer’s bank. The buyer’s bank notifies the buyer that such shipping documents have been received and advises the buyer to ‘accept’ the documents by effecting payment of export proceeds. The buyer receives original shipping documents from his bank after making necessary payments against the sale of goods under the DP terms of payment. A buyer takes possession of shipping documents after collecting them from the bank and completes necessary customs clearance procedures in the importing country. Did you enjoy our article? Do share your experience in the comment section. The information provided above is part of our Online Export Import Training course.