Incoterm DDP – be wary

Incoterm DDP – be wary

 

A lot of our customers have come to us in recent months with thoughts of changing current DAP Incoterms to DDP for exports, perhaps in fear that their EU customers will find purchasing from the UK less financially attractive should tariffs be imposed bilaterally.

DDP, or Delivered Duty Paid, places the maximum responsibility on the seller as it also involves the destination import clearance and payment of VAT and duties applicable.

Our industry body BIFA posted a concise article about this in their September magazine and a link can be found here at page 16.

Whilst it is not infeasible to perform such a process, there are also other considerations. Yes, our partners could withhold delivery should our customer not make payment of VAT and Duties, but apart from delaying delivery, certain local regulations, particularly Italy, provide that if the goods are present in their country, they become legally the property of the consignee, whether or not the goods have been paid for, in the case that any party wishes to take a lien on them.

Best advice is to avoid at all costs and come to some alternative agreement between buyer and seller.

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