Kerim Allam

The Incoterms rules are silent on the issue of when title in the goods passes from seller to buyer. This should be dealt with elsewhere in the commercial agreement.

The issue of title to the goods is related to that of revenue recognition, which matters to those organisations who want the best figures in their financial reports.

Revenue recognition is defined by accounting standards such as GAAP, and the point of delivery (as defined by the Incoterms rule) is one factor in the decision on this matter.

Hence rules such as DAP and DAT would tend to be disadvantageous in this respect.

Import tariffs may need to be paid for your product when it enters the EU. The EU is a customs union, which means that a single import tariff is due at the place of entry where the import declaration is made, irrespective of the EU Member State. The product can then circulate in the EU market without further customs formalities.
Who pays for the tariffs depends on the agreement with the seller, but often import duties are paid by the importer.

The safest way of getting a definitive decision on the correct UK / EU customs commodity code for a product is by obtaining a “Binding Tariff Information Ruling” (BTI) from H.M. Revenue & Customs. This will provide a definitive decision on the correct tariff code for a specific article, which is then binding for 3 years on H.M. Revenue & Customs and their counterparts in all other EU Member States.

If a negotiable bill of lading is lost, stolen, or destroyed, a few measures can be taken. Place an advertisement in the local press about the “loss” or “nullification” of the original bill. A court order may be secured, which advises the carrier (shipping line) to deliver the goods to the holder of the title of the goods, based on a surety bond given by the entity claiming the goods, for an amount approved by the court.
The carrier also should receive a Letter of Indemnity indemnifying the carrier or any person injured by delivery, against liability under the outstanding original bill.. The court also may order payment of reasonable costs and attorney’s fees to the carrier.
Certain lines accept a Letter of Indemnity if it is signed by a bank who would then take joint liability to return the original bills of lading.

The seller pays for and arranges the insurance and freight. It’s a popular Incoterm because the buyer knows the final cost of goods and need not organise the shipping and insurance suppliers. A seasoned buyer may prefer to organise these suppliers to get the best deal and avoid any premium for the seller to do the work.