DDP (Delivered Duty Paid)

Incoterms, also known as international commercial terms, are set to eliminate or decrease confusions and conflicts between buyers and sellers in international trade and to facilitate the trade and commerce process globally. Incoterms were created by the International Chamber of Commerce (ICC) in 1936 and since then, they are updated on a regular basis to suit changing trade trends.
EXWFCACPTCIPDAPDPUDDPFASFOBCFRCIF
Free CarrierCarriage Paid ToCarriage Insurance Paid ToDelivered at PlaceDelivered at Place UnloadedDelivered Duty PaidFree Alongside ShipFree On BoardCost & FreightCost, Insurance & Freight
Charges/FeesEx Works
At a named place, the seller transfers the goods to the buyer; the buyer is responsible for all risks.1.) when seller loads goods to buyer’s carrier or 2.) when goods are at the buyer’s disposal & ready for unloading at a named placedwhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen the goods are delivered and unloaded at a named place or agreed point within that placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen goods are alongside the vessel nominated by the buyer at named portwhen goods are on board the vessel nominated by the buyer at named portwhen the goods are on board the vessel nominated by the seller at originwhen the goods are on board the vessel nominated by the seller at origin
Risks Transfer
Commercial InvoiceSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Packaging & QCSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading & DeliveryBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Export Duty & TaxesBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Origin Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerSellerSellerSeller
Cargo InsuranceNegotiableNegotiableNegotiableSellerNegotiableNegotiableNegotiableNegotiableNegotiableNegotiableSeller
Carriage ChargesBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerSellerSeller
Destination Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Delivery to DestinationBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Unloading at DestinationBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyerBuyer
Import Duty & TaxesBuyerBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyer
Incoterms 2020
DDP

According to DDP or Delivered Duty Paid incoterm, the seller bears all risks and costs for delivering the goods to the named place of destination. Both export and import formalities, fees, tariffs, and taxes must be done and paid by the seller.

For pre-carriage or main carriage, the seller is not required to provide insurance for the goods.

Until the goods are unloaded from the vehicle at the named destination, usually the buyer’s place of business, the buyer is free of any risk or cost.

DDP is the only Incoterm that puts the seller in charge of import clearance and payment of taxes and/or import duties.

The DDP Incoterm is versatile in that it may be used for any form of transportation.

The downside of this incoterm for the importer is a lack of control over the shipping process due to his limited responsibilities, which may be an attractive choice for first-time importers.

Seller’s Responsibility Under DDP

  • Goods delivery
  • Packaging and marking
  • Transportation of goods in the country of origin
  • Transportation of goods to the agreed delivery point in the destination country
  • Customs charges and handling fees in the origin and destination countries
  • Additional charges and fees in the origin and destination countries
  • Duties and taxes payment
  • International freight

Buyer’s Responsibility Under DDP

  • Goods payment
  • Helping the seller in preparing any needed documents for export and import formalities

Cargo Insurance in DDP

Despite the fact that DDP does not need shipping insurance, most sellers prefer to provide insurance for the cargo.

This is due to the fact that sellers have far more responsibilities than buyers, and their responsibilities just end when the cargo is delivered to the buyer.

Insurance terms and conditions should always be included in the sales contract.

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