DDP (Delivered Duty Paid)
From Supply Chain Management Encyclopedia
Russian: DDP Поставка с оплатой пошлин (...названное место назначения)
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General Provisions
In accordance with rules of Incoterms® 2010,[1] DDP, - DDP Delivered Duty Paid (insert named place of destination),- may be used irrespective of the mode of transport selected and may also be used where more than one mode of transport is employed. In DDP, the named place of destination is domestic to the buyer and is often the buyer’s place of business. The DDP rule means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. In DDP, the named place of destination is domestic to the buyer and is often the buyer’s place of business.
The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities. The DDP term places the greatest responsibility on the seller and the least responsibility on the buyer. The parties are well advised to specify as clearly as possible the point within the agreed place of destination, as the costs and risks to that point are for the account of the seller.
The seller is advised to procure contracts of carriage that match this choice precisely. If the seller incurs costs under its contract of carriage related to unloading at the place of destination, the seller is not entitled to recover such costs from the buyer unless otherwise agreed between the parties. The parties are well advised not to use DDP if the seller is unable directly or indirectly to obtain import clearance.
If the parties wish the buyer to bear all risks and costs of import clearance, the DAP (Delivered At Place) rule should be used. Any VAT or other taxes payable upon import are for the seller's account unless expressly agreed otherwise in the sales contract. All forms of payment are used in DDP transactions.
Summary on Buyer's and Seller's Responsibilities under DDP Rule in Incoterms® 2010
Seller's Responsibilities (in brief) | Buyer's Responsibilities (in brief) | |
Goods - Payment |
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Licenses, Security, and Customs Formalities |
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Carriage |
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Insurance |
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Delivery - Taking Delivery |
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Risk Transfer |
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Costs |
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Notice to the Buyer - Notice to Seller |
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Delivery and Transport Documents - Proof of Delivery |
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Checking, Packing, Marking - Inspection(s) |
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Other |
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Examples [1]
- DDP, Rusles OOO Warehouse, Full Address, Lesosybirsk, Russia
- DDP, ToysForAlls, Inc., Full Address, Vancouver, Canada
Notes
- [1] The examples given hereto are to illustrate purposes concerning the syntax of Incoterms® 2010 rules and could conform with any real data occasionally only.
- [2] According to Incoterms rules, seller and buyer have reciprocal responsibilities only. The "no obligation" term often used in the rules of Incoterms means that one party has not obligation to the other party. In this case (Art. B.3.А - Incoterms® 2010) the buyer has obligation neither to arrange nor to pay the contract on carriage. The "no obligation" term has the same understanding for the both parties in the case of insurance. However, the "no obligation" term being applied to the second party does not mean that the task performance is out of the first party’s interests (Articles А.3.В and B.3.B in Incoterms® 2010). So, for the case of the DAP rule, despite the fact that the buyer has not responsibility to the seller for the contract on carriage, it is clear, that the buyer has an interest to have such a contract on carriage that will deliver the goods to the buyer’s place of destination safely and in the time stipulated.
- [3] Delivery document term used as the heading to article A8 (Incoterms® 2010) means a document used to prove that delivery has occurred. For many of the rules of Incoterms® 2010, the delivery document is a transport document or corresponding electronic record. Nevertheless [2], with EXW, FCA, FAS and FOB rules, the delivery document may simply be a receipt. A delivery document may also have other functions, for example as part of the mechanism for payment declaration: refers to comply with customs regulations and have met some of the requirements, including the notes, Enron, information or physical inspection of the obligation. Such requirements are particularly common in construction contracts with large contractors, government entities, and major corporations.
References
- ↑ Incoterms® 2010: ICC rules for the use of domestic and international trade terms – ICC Publication No 715E
- ↑ Financial terminology | http://financialterminology.info/2011/06/incoterms-2010-international-edition-b/