DDP terms of delivery. Delivery of goods on DDP terms

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The transportation business is a dynamically developing area of the economy. Every year more and more new players come to it, some of which have little idea of work in this industry. To fix this, we bring to your attention an article that describes the terms of delivery of DDP.

Given the trend towards a rapid increase in the level of traffic, such information will certainly not be superfluous.

Deciphering the basic concept

In foreign literature, DDP delivery terms are referred to as Delivered Duty Paid (…named place of destination), which translates as “delivery with duty paid”, after which they indicate the destination where they want to bring the goods.

What does that mean?

Simply put, the term means the following: the seller undertakes to provide the buyer with the goods that have passed all customs formalities (clearance), delivering it to the destination agreed by the parties. Of course, in this case, the seller bears all the risks associated with the transportation of goods, pays allnecessary customs fees.

Thus, in this case, the seller bears full responsibility for the safe arrival of the goods from the warehouse to the final buyer. Important! If the supplier for one reason or another cannot pay for a license to import products, the term "DDP delivery terms" is no longer acceptable.

Some exceptions

The parties may agree that part of the costs (VAT, for example) can be paid by the party buying this product. But in this case, all the smallest details of the transaction must be reflected in the contract. The seller needs to be especially careful in this regard: if these conditions are not specified in the documents, any court will take the side of the buyer, so the DDP delivery conditions are beneficial to the receiving party.

If the buyer assumes the risk of transporting the goods, then the term DDU should be used. Of course, all this should also be reflected in the contract of sale. This designation is used regardless of the mode of transport, but in international practice it is customary to designate delivery by sea as DES or DEQ.

Of course, we have already repeated more than once about the full responsibility of the seller, but this topic is worth revealing in more detail, since exceptions are possible in some cases.

Customs clearance

Unlike other delivery methods, in this case, the seller (!) At his own peril and risk, draws up all permits for the import of products, passes the goods through the customs of anothercountry or your own country (domestic transport), while paying all fees and charges out of your own pocket.

Contracts of carriage and insurance

In addition, it is the supplier who, at his own expense, concludes a contract for the supply of products. But! Unless otherwise specifically agreed in the contract, he may independently choose the destination that best suits his requirements. As for the insurance contract, there are no obligations under it.

About cost sharing

Among other things, DDP terms of delivery - "Incoterms-2010" - oblige the seller to bear all costs associated with the loading / unloading of goods, as well as reimburse those costs that arise in the process of delivering the goods to the customer. Forced spending associated with crossing an internal or state border (as well as the borders of other states in the future) also fall under this definition.

Important! According to the new requirements, DDP-terms of delivery ("Incoterms-2010" - the so-called these rules) provide for sending a notice to the buyer about the fact that the transportation of goods has begun, and also oblige to send the latter all the information that may be needed to carry out any activities related to receiving goods.

Proof of Delivery

Please note that the seller is also responsible for providing (at his own expense) a delivery order and / or a regular document issued during transportation. These include negotiable bill of lading, sea waybill, waybills,confirming the fact of sending the goods by sea, air or other means of transport. If it is provided for in the supply agreement, it is allowed to use electronic documents certified by an electronic signature encrypted using standard cryptographic tools.

About product inspection and packaging requirements

As regards checking the goods before sending them, the delivery under DDP terms in this respect is no different from that with other methods of forwarding goods. Simply put, the seller must, at his own expense and on his own, check the availability of the goods, their weight and other important characteristics that are important for the normal dispatch and subsequent acceptance of the goods. In addition, the supplier, at his own expense, provides the necessary packaging for the product, unless trade rules allow the export of this cargo in bulk.

Of course, the packaging must have all the necessary markings adopted for this type of product worldwide or in the country through which transportation is carried out.

This is what DDP is from a seller's point of view. And now we will talk about what kind of obligations are imposed on the direct recipient of the goods (buyer).

Basic Buyer Responsibilities

Firstly, it should be stipulated in advance that this role can be played not only by a legal entity, but also by an individual. In any case, the main responsibility of the buyer is to pay for the goods delivered in time.

In addition, the delivery of goods on DDP terms requires him to fully assist the seller in obtaining any necessary information for the timely and unhindered receipt of all necessary customs documents. If the delivery is made in accordance with all generally accepted rules and conditions, agreed in advance and prescribed in the sales contract, then the customer is obliged (!) to accept and pay for the goods in full accordance with the previously reached agreements.

If for some reason the buyer cannot accept the goods at the point of unloading, which was previously agreed in the contract, he is obliged to notify the seller as soon as possible. Failure to meet this obligation may result in pen alties.

Force Majeure

Some exception can only be force majeure. This term refers to an irresistible force that prevents the parties from fulfilling their agreements specified in the contract (war, natural disasters and natural disasters).

But this does not relieve the buyer from the need to pay for the goods delivered to him or to accept the already paid cargo. In addition, in order for the conditions to be truly recognized as force majeure, he should, within a maximum of three days, contact the nearest branch of the Chamber of Commerce of the Russian Federation and record his request for a delay in the fulfillment of obligations to the seller.

If force majeure continues for more than three months, the contract may be terminated byagreement of the parties. But again, this does not mean that the buyer or seller may not deliver the goods already paid for or not pay for the delivered consignment.

In the event that a conflict arises on such grounds that cannot be resolved by an amicable agreement of the parties, the Arbitration Court should reconcile them.

Risk passing

As you might guess, the main responsibility for this item lies with the seller. But the customer himself has certain obligations.

If the delivery of the cargo was completed on time and in accordance with other terms of the contract, in this case the buyer bears all responsibility for its further safety from the moment the cargo is handed over to him or his legal representative. In the event that damage or shortages arose due to the actions of the customer, the latter is obliged to pay the pen alty in full at his own expense.

If the buyer did not inform the seller about the impossibility of accepting the goods, he must pay in full all losses incurred as a result of his actions. But! The main condition for compliance with this clause of the contract is the full compliance of the cargo with the declared characteristics. In particular, the terms of delivery of the DDP "Incoterms-2012" are based on this.

To put it simply, the cargo must be properly identified. Or otherwise defined as the goods that were the subject of the agreement between the two conflicting parties.

In addition, it is the recipient who must bear all costs associated with the inspectiongoods at the time of receipt. This is especially true in cases where such a requirement is legally enshrined in those states where the seller exported the goods. This requirement was introduced in the terms of delivery of DDP "Incoterms-2000" and since then its provisions have not changed.

Important Notes

Despite all of the above, there are often legislative incidents. Thus, many entrepreneurs in our country have faced a situation where a seller who is a legal or natural person of another state, according to the rules of our trade, cannot pay trade duties and other fees on his own behalf (Article 320 of the Labor Code of the Russian Federation), despite the fact that it is required DDP terms of delivery. This means that such a state of affairs should be taken into account even at the time of the conclusion of the contract, prescribing the need for payment of trade duties by the buyer. This will avoid misunderstandings and legal hardships in the future.

In closing

The method of trade deliveries described above is especially relevant in recent years. The global industrial and economic crisis lead to the fact that sellers are forced to fight for the attention of buyers by all means. If you do not violate trade laws, then often the only way to attract potential customers is to supply DDP, as it allows you to show maximum loy alty to the consumer.