DDP Is Not a Compliance Strategy

Delivered Duty Paid puts cost and risk on the seller all the way to the named destination, import duty and VAT included. It reads like the buyer has been relieved of the border. What it does not do is say who is legally able to act as importer in the destination country – and in most jurisdictions that has to be a party established there, holding a local registration, able to file an entry and answer for it afterwards.

It breaks when the seller has no entity in the destination country. The contract has been signed, the hardware is built, and the party that promised duty-paid delivery cannot legally file the declaration that makes delivery possible. The usual improvisation is to name the customer as importer at the last moment, which quietly transfers the liability the contract was written to remove, or to name the freight forwarder, which most forwarders will decline in writing.

Appoint an importer of record before the incoterm is agreed, not after. An appointed IOR is established in the country of import, files on its own EORI and VAT registration, settles duty and import VAT under its own deferment account, and holds the licences. The DDP obligation then has somebody who can actually perform it, and the customer's name never appears on a declaration.

Who is named as importer of record, and are they established in the destination country? Whose EORI and VAT registration is the entry filed on? Who settles the import VAT, and out of whose deferment account? Who holds the dual-use authorisation if one is required? And who answers a re-assessment three years from now? If a proposal cannot answer all five in writing, the incoterm is decorative.