International Trade and Law Case Study 2022

Running head: INTERNATIONAL TRADE LAW
INTERNATIONAL TRADE LAW
Name of the Student
Name of the University
Author Note

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INTERNATIONAL TRADE LAW INTERNATIONAL TRADE LAW
Palm Oil Plantations in Country A is an established exporter of crude palm oil (CPO)
and palm oil-related products, and it is been shipping the same to the Countries B, C, D, and
E for the last 50 years. Below is the preferential incoterms for Country A’s AS A seller in
their dealings with Country B, C, D, and E;
For Country B, the best incoterm will be DAP or Delivery At Place because it is a
modernized country, where the government has invested significantly to create a developed
and skilled workforce, automation and digitization technologies along with efficient port and
transportation infrastructure. Furthermore, the seller can take such a huge risk of transport as
the currency of country B is stable and almost every global insurance companies and freight
forwarders have a presence in this country. In addition to this, the country's dependency on
imports and familiarity with import formalities and global logistics requirements is the
influential factor behind such risk-taking (Projectmaterials, 2010).
In the case of DAP, the seller is accountable for the transport of goods from the spot
of departure such as business location, warehouse to the preferred destination agreed between
the exporter and the importer, where such shipment will discharge.
The risk associated with the DAP term is required to bear by the seller until goods are
being delivered to the destination place and the same cannot be charged back from the seller.
Therefore, the seller requires to have insurance for shipment under DAP terms to mitigate the
potential risk (Myseatime.com).
The seller’s compulsion under DAP is to provide the delivery of the goods as well as
to provide an invoice for such delivery, the seller needs to provide local authorization or
licenses to export goods, the seller is obligated to unload the goods at the decided destination,
the seller is further required to make payment for the expenses of the main carriage, export

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clearance cost, and also require to pay for the checking cost, quality control cost, packaging
and marking cost. In case any extra cost is required for packaging, the seller must inform the
buyer. On the other hand, the buyer is mandated to pay the cost of the goods, the buyer must
have an import license, the buyer is obliged to give a notice about the time and destination of
the shipment, the buyer is required to pay customs duties while unloading the shipment
(Pathak, 2016).
For Country C, the best incoterm will be FAS or Free, where the seller is required to
delivers a shipment to the buyer when the goods are alongside the ship at a place agreed by
the buyer. From then onwards, the buyer has to abide all risk related to the goods. This is
suitable because the political and legal scenario in that country is relatively uneven along
with challenging economic conditions. It is further evidencing an overall GDP deficit.
Therefore, buyers from this country might have face uncertainty regarding the terms of
payment.
Therefore, in the case of FAS, the risk relating to the loss and damage of shipment goods has
to bear by the buyer once the seller has delivered alongside the ship to the buyer according to
their agreed terms. To mitigate the risk associated with the loss or damage of the products
during carriage, the buyer is required to obtain insurance.
The seller must pay for the requisite cost regarding the export of the goods to get clearance
and deliver the same according to the precise terms of the FAS agreements. In case the buyer
is required to bear such export expenses, it has to be explicitly mentioned in the FAS
agreement (Eldovića et al., 2015).
The buyer must arrange a carrier for the shipment after getting delivery from the seller, as a
buyer is a shipper from that point of time. Furthermore, the buyer needs to bear all sorts of
cost including the insurance cost regarding the shipment of such goods from that point of