We analyse Incoterm DDP and its importance in international trade
An Incoterm represents an universal term which refers to a transaction made between an exporting company and an importing company, so that both parties are able to understand perfectly tasks, costs as well as responsibilities, risks, logistics management and transport for the whole process until destination.
Regarding "DDP" initials, they make reference to "Delivered Duty Paid", which means: "named place of destination". It is a commercial term which represents the first duty of the seller and it also indicates when seller has fulfilled all his obligations once the goods have been delivered and all customs duties for imports and exports have been made.
Likewise, it is also used when all travel expenses have been paid, except for unloading in the destination. The use of this term, Incoterm DDP, is not recommended when the seller cannot obtain all necessary authorizations to make the import. If both parties agree that the buyer is responsible for all risks and costs, then the term DAP must be used.
Besides, it is highly recommended that each part makes all customs duties in their countries in order to avoid additional problems. Therefore, the seller has to pay for export and import taxes, in addition to comply with the rules and authorizations. If the seller unloads the goods in the destination, he won't have the right to be paid back by the buyer, unless a previous agreement between both parties exists. In this sense, it is very important to know that the buyer is forced to accurately specify, the exact place for unloading to the seller so that he can hire the transportation service as well as insurance.
Finally, it must be said that Incoterms DDP are applicable to any country since they are terms which both parties can make an agreement with to make a transaction, without taking into account language or distance. At all events, when an import purchase order is made or medium or large volumes are wanted to be exported, as well as small or sample purchases, it is always necessary to use Incoterms DDP.
Source: Internacionalmente