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What is DDP?
DDP, or Delivered Duty Paid, is an international trade term that refers to a shipment where the seller assumes total responsibility and costs for delivering the goods to the named destination.
According to DDP Incoterms, what is each party responsible for?
DDP is the Incoterm that places the most risk and responsibility on the seller. Under DDP the seller is responsible for clearing customs, paying duties and taxes, arranging all transportation to the destination, import clearance, fees, and duties, and any associated fees with the above.
The seller assumes all risk and responsibility until the goods are unloaded from the vehicle at the final place of destination, often at the buyer’s place of business.
When is DDP used?
DDP can be used in any and across multiple modes of transport.
Clearing customs and arranging for imports can be difficulty in countries with complex or bureaucratic import procedure and since DDP requires that the seller clear imports in the destination country, it works best when the seller has local knowledge of the country of destination or if the import clearance is simple (such as in countries with an FTA).
Tags:incoterms
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Delivered Duty Paid (DDP)
Definition: DDP is an Incoterm, a set of international trade terms, that places the maximum responsibility and risk on the seller for delivering goods to the named destination. This term signifies that the seller assumes all costs associated with transportation, customs clearance, duties, and taxes until the goods are unloaded at the final destination.
Responsibilities under DDP Incoterms:
- Customs Clearance: The seller is responsible for clearing customs in the destination country.
- Duties and Taxes: The seller bears the costs of paying duties and taxes associated with the shipment.
- Transportation: The seller arranges and covers the costs of transportation to the specified destination.
- Import Clearance Fees: Any fees related to import clearance are the responsibility of the seller.
Risk and Responsibility: The seller assumes all risk and responsibility until the goods are unloaded at the final destination, typically at the buyer's place of business.
When is DDP Used?
Versatility: DDP can be employed in various modes of transport, making it a versatile Incoterm suitable for different transportation methods.
Complex Customs Procedures: DDP is particularly beneficial in countries with complex or bureaucratic import procedures. The seller's responsibility for clearing imports in the destination country makes it advantageous when the seller possesses local knowledge or when the import clearance process is straightforward, as seen in countries with Free Trade Agreements (FTA).
Related Terms
1. FCA (Free Carrier): Another Incoterm, where the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place.
2. CFR (Cost and Freight): The seller pays the costs and freight necessary to bring the goods to the named port of destination but the risk of loss or damage is transferred to the buyer once the goods are loaded on the vessel.
Tags: Incoterms
Incoterms-related tags highlight the relevance of the article to international trade terms and regulations.
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