What does 'Delivered Duty Paid - DDP' mean
Delivered duty paid (DDP) is a transaction where the seller pays for the total costs associated with transporting goods and is fully responsible for the goods until they are received and transferred to the buyer. This includes paying for shipping costs, export and import duties, insurance and any other expenses incurred during shipping of the goods. DDP is a type of delivery agreement that puts all of the risks and charges with the seller of the goods until delivery is made in the buyer’s country at an agreed-upon location.
BREAKING DOWN 'Delivered Duty Paid - DDP'
The seller gives the goods to a carrier and arranges for transportation. The seller is responsible for acquiring customs clearance in the buyer's country, including and obtaining the appropriate approvals from the authorities in that country. In addition, the seller may need to acquire a license for importation. However, the seller is not responsible for unloading the goods.
During shopping on the Internet, delivered duty paid noted next to an item signifies that all duties have been paid, but buyers must use caution. It is important to verify the company’s policy and to have all details agreed upon prior to making the transaction. In a delivered duty paid transaction, if the goods are damaged or lost in transit, the seller is liable for the costs.
The seller’s responsibilities include manufacturing the goods, providing a sales contract and documents as required by the sales contract, export packaging, arranging for export clearance and all import and export and customs requirements, arranging and paying for all transportation costs and including final delivery to an agreed-upon destination. In addition, the seller must make all arrangements for proof of delivery and pay the cost of all inspections. The seller must alert the buyer when the goods have been delivered to the agreed-upon location.
Delivered duty paid shipments require that the shipper obtain customs’ clearance. Prior to sending DDP shipments, the seller must determine the local customs requirements of the particular destination country. However, it is not always achievable for the shipper to clear the goods through customs in foreign countries.
In addition, customs requirements for DDP shipments vary by country. In some countries, import clearance procedures are complicated and lengthy and should be arranged by the buyer who has intimate knowledge of the process. If a delivered duty paid shipment does not clear customs, customs may ignore the fact that the shipment is DDP. Unfortunately, this may cause a shipment delay. Depending on the decision by customs, this may result in the seller using different delivery methods and require additional costs.