Delivered Duty Unpaid (DDU)
Candlefocus EditorThe overseas customs authority, responsible for determining the applicable duties and taxes, is involved in DDU shipping negotiations. Buyers can reduce their potential risks by procuring an up-to-date cost breakdown of estimated taxes and/or duties. The buyer needs this breakdown to ensure that they can cover the cost of any applicable taxes and/or tariffs, in addition to the cost of goods and shipping/transportation.
In order to properly plan for DDU shipping, the seller and buyer need to coordinate in advance to agree on the shipment date and any applicable payment terms. If the buyer does not pay the full cost of import duties upfront, the seller may require that the buyer sign a formal guarantee for the balance of the tax amount. International commercial invoices must also be correctly completed, with accurate data and same value for both the buyer and seller.
By contrast, Delivered Duty Paid (DDP) responsibility lies with the seller, who is responsible for all aspects of transport from the point of origin to the point of destination, as well as any import duties, fees, taxes, and customs clearance. The seller takes full responsibility for the goods and all associated costs, regardless of any unexpected changes in the cost of import duties. This allows the buyer to receive their goods with no further financial obligation.
Overall, Delivered Duty Unpaid (DDU) can be beneficial to both buyers and sellers as it gives buyers more control while also allowing sellers to limit their own liability when shipping internationally. However, it is important that both parties understand the full responsibilities of DDU in order to ensure that no problems arise with shipping or customs clearance. When in doubt, consulting with a freight forwarder can be helpful in making sure that all requirements are met.