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Who is the legal responsible subject for customs clearance when importing industrial raw materials under DAP trade terms?
or complex compliance issues.
clearance and fund security.
I am the person in charge of an enterprise importing industrial electronic accessories in Shanghai. Last week, we finalized a DAP Shanghai Waigaoqiao order for a batch of industrial sensors with a German supplier. I originally thought the supplier would be responsible for all procedures after the goods arrive at the port, but today the freight forwarder suddenly notified me to submit customs clearance documents.
I contacted the supplier, who said they are not responsible for customs clearance under DAP terms. Now the goods have been at the port for 2 days, and I have not prepared any customs clearance documents and qualifications before.
If we delay further, high port storage fees and container detention fees will definitely be incurred, and the goods may even be detained by the customs. I am extremely anxious right now: who is responsible for customs clearance of DAP imports? If the responsibility lies with our side, what remedies can we take to avoid huge losses?
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
First of all，we need to clarify a common industry misunderstanding: many import enterprises mistakenly believe that under DAP terms，the seller is responsible for all procedures after the goods arrive at the port，including customs clearance，which is a typical misinterpretation of INCOTERMS®2020 rules.
Falling into this misunderstanding and failing to prepare customs clearance documents in time will trigger a chain of negative reactions: if the goods cannot be cleared in time after arriving at the port，daily increasing port storage fees and container detention fees will be incurred. If the 14-day port detention period stipulated by the customs is exceeded，the goods may be legally detained by the customs，and even enter the auction process，at the same time，the enterprise may also be included in the customs dishonest list，which directly affects the customs clearance efficiency of subsequent import businesses.
Physical risk isolation measures: contact a professional customs broker to intervene as soon as possible，and simultaneously apply to the port area for an extension of the free storage period to avoid continuous accumulation of fees，at the same time，immediately sort out core documents such as the enterprise's import qualification，certificate of origin，commercial invoice，packing list，etc. If exclusive documents that should be provided by the supplier are missing，send an official letter to require the other party to cooperate in issuing them within 24 hours.
Exclusive loss mitigation tips: you can apply to the freight forwarder for priority customs clearance arrangement with the DAP trade contract. If the supplier refuses to cooperate，keep all communication records between the two parties (including emails，chat screenshots)，and recover the additional losses caused by the other party's misguidance through trade arbitration or industry association mediation later.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
According to INCOTERMS®2020 rules and the Customs Law of the People's Republic of China, the legal responsible subject for import customs clearance under DAP terms is the buyer. In the customs valuation process, if document missing is caused by unclear responsibility division, valuation inquiry will be triggered, requiring additional supporting documents such as communication records between the trading parties and supplementary contract terms.
If the enterprise fails to perform customs clearance responsibilities in time, the customs will directly issue a reminder notice to the buyer. If the handling is overdue, the compulsory customs clearance procedure will be launched, and all incurred costs and risks shall be borne by the buyer. For such situations, enterprises need to pre-enter goods information in the customs declaration system in advance, and submit qualification pre-review simultaneously, to avoid problems such as application rejection, document deletion and re-declaration caused by inconsistent information.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
Under DAP terms, the seller is responsible for transporting the goods to the designated destination (such as Shanghai Waigaoqiao Port Area) and completing unloading, but the title transfer node is after the goods arrive at the designated place, and the customs clearance responsibility is fully borne by the buyer. If the buyer fails to clear customs in time, the shipping company will calculate container detention fees from the next day after the goods arrive at the port. The detention fee for ordinary containers is usually 100-300 yuan per container per day, and the fee will double if overdue for more than 7 days.
At this time, the buyer can apply to the shipping company for a 3-7 day extension of the free detention period with the DAP trade contract, and at the same time require the freight forwarder to prioritize arranging the container to be picked up and temporarily stored in the bonded area, to avoid greater losses caused by long-term detention of goods in the port. In addition, it should be noted that although the title of uncleared goods has been transferred, they cannot be picked up, so it is necessary to ensure that customs clearance procedures and container picking arrangements are connected synchronously.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
Customs duties, import value-added tax and other taxes incurred in the DAP import customs clearance process shall all be paid by the buyer. For eligible import enterprises, they can apply for the VAT deferment policy, which means there is no need to pay import VAT immediately at the time of customs clearance, but deduct it in the subsequent VAT declaration period, effectively relieving the capital pressure of the enterprise. If the seller mistakenly pays taxes due to unclear responsibility division, the buyer shall cooperate with the seller to provide the tax payment certificate issued by the customs, and go through tax refund procedures through the cross-border tax mutual recognition mechanism. In addition, it should be noted that if taxes are not paid in time, the customs will impose a late fee of 0.05% per day, which will also affect the enterprise's tax credit rating, and further affect subsequent applications for tax preferential policies.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The clear definition of DAP import customs clearance responsibility directly affects the compliance of cross-border foreign exchange receipt and payment. If the buyer fails to complete customs clearance in time and cannot obtain the import goods declaration form issued by the customs, it will not be able to go through foreign exchange payment procedures at the bank, as the bank requires the declaration form as the core voucher for foreign exchange receipt and payment.
When using CIPS RMB cross-border payment, it is necessary to clearly mark the trade term as DAP in the foreign exchange payment application, to avoid being returned by the bank due to inconsistent transaction information. In addition, if the goods cannot be cleared in time due to responsibility disputes, the enterprise shall submit a situation explanation to the State Administration of Foreign Exchange to avoid being included in the abnormal list of foreign exchange receipt and payment, which affects subsequent cross-border capital settlement.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
In DAP trade contracts, the division of customs clearance responsibilities shall be clearly agreed. If only the adoption of DAP terms is marked without supplementary customs clearance details, disputes are easy to arise. According to INCOTERMS®2020 rules, the seller is only responsible for transporting the goods to the designated destination, and customs clearance and related taxes are borne by the buyer.
If the seller misleads the buyer in early communication that it is responsible for customs clearance, the buyer shall keep chat records, emails and other evidence, and recover losses caused by delayed customs clearance through trade arbitration or litigation. In addition, a "customs clearance assistance clause" can be added to the contract, requiring the seller to cooperate in providing customs clearance required documents such as certificate of origin and MSDS, to avoid customs clearance delays caused by missing documents.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
During DAP import customs clearance, the buyer as the responsible subject shall cooperate with the customs to complete on-site inspection. After the goods arrive at the port, confirm the integrity of the container seal as soon as possible.
If the seal is damaged, take photos immediately and report to the freight forwarder and customs, to avoid being identified as abnormal goods. During on-site inspection, personnel familiar with the characteristics of the goods shall be present to cooperate.
If the customs raises a query that the goods are inconsistent with the documents, it is necessary to provide the correction statement or supplementary documents issued by the supplier in time. If you fail to be present to cooperate with the inspection in time, the customs will adopt unpacking inspection, and the incurred container unpacking fees and inspection fees shall be borne by the buyer, and the customs clearance cycle will be extended.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Under DAP terms, the seller is responsible for the transport packaging of the goods, but packaging compliance documents required for customs clearance (such as UN dangerous goods packaging certificate, MSDS) shall be provided by the seller, and the buyer is responsible for reviewing the compliance of the documents. If the packaging documents do not meet the requirements of China's customs, the goods will be stuck in the customs clearance link, requiring supplementary documents or packaging rectification, and the incurred costs and delay losses shall be borne by the buyer.
For dangerous goods, the buyer shall review the accuracy of MSDS in advance before customs clearance, to ensure that the goods classification is consistent with the customs code, and avoid cargo detention caused by packaging compliance problems. In addition, the seller can be required to provide inspection reports of packaging samples before shipment, to check risks in advance.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
If DAP imported goods need to be re-exported later, the division of responsibility in the customs clearance link will directly affect the handling of export tax refund. If the buyer fails to complete customs clearance in time, resulting in missing or incorrect information of the import goods declaration form, valid import certificates cannot be provided during subsequent re-export, and export tax refund cannot be applied for. In addition, if the customs duties and value-added tax paid at the time of import are not deducted according to regulations, the tax cost of the enterprise will increase.
For such situations, enterprises shall simultaneously keep copies of declaration forms, tax payment certificates and other materials during import customs clearance, to ensure the integrity of documents, and avoid tax refund application rejection caused by inconsistent documents. At the same time, it is necessary to enter import goods information in the tax system in time, to complete the filing of input tax deduction.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Under DAP trade terms, the ownership of customs clearance responsibility directly affects the cost structure of the import supply chain. If the buyer fails to plan the customs clearance process in advance, resulting in delayed customs clearance, it will increase hidden costs such as port storage fees and container detention fees, accounting for 5%-10% of the total import cost.
Enterprises can sign long-term cooperation agreements with professional foreign trade agency companies, outsource the customs clearance link, predict customs clearance risks in advance, and optimize the connection of supply chain nodes. In addition, the "customs clearance pre-audit" link can be added to the supply chain planning, to complete document review, qualification pre-review and other work before the goods are shipped, ensuring that the goods can be cleared immediately after arriving at the port, shortening the time of goods staying at the port, and reducing the overall supply chain cost.