What do unpaid duties returned mean?
Delivered Duty Unpaid (DDU) is an old international trade term indicating that the seller is responsible for the safe delivery of goods to a designated destination, paying all transportation costs and assuming all risks during transportation. Once the goods arrive at the agreed place, the buyer becomes responsible for the payment of import duties, as well as additional transport costs.
Delivered Duty Paid, on the other hand, indicates that the seller must cover import duties, customs clearance, and taxes.
Unpaid delivery charges (DDU)
Understanding fees returned unpaid
Delivered Duty Unpaid (DDU) was in fact not included in the most recent (2020) edition of the Incoterms of the International Chamber of Commerce; the current official term that best describes the function of the DDU is Delivered-at-Place (DAP). However, DDU is still commonly used in international trade language. On paper, the term is followed by the place of delivery; for example, “DDU: Port of Los Angeles”.
With DDU, the seller assumes all risks until the goods are delivered to the specified location; then the risks are assumed by the buyer.
According to the DDU agreements, the seller obtains licenses and takes care of the other formalities linked to the export of a product; it is also responsible for all licenses and costs incurred in transit countries, as well as for providing an invoice at its expense. The seller assumes all risks until the goods are delivered to the specified location, but has no obligation to obtain insurance on the goods.
The buyer is responsible for obtaining all necessary licenses to import the goods and for paying all applicable taxes, duties and inspection fees. All risks involved in this process are the responsibility of the buyer. Once the goods have been made available to the buyer, all additional transport costs and risks are the responsibility of the buyer.
Key points to remember
- Delivered Duty Unpaid (DDU) is an international trade term meaning that the seller is responsible for ensuring that the goods arrive safely at their destination; the buyer is responsible for import duties.
- Delivered Duty Paid, on the other hand, indicates that the seller must cover import duties, customs clearance, and taxes.
- The DDU is still commonly used in transport contracts, even if the International Chamber of Commerce officially replaced it with the term Delivered on site (DAP).
ICC and Incoterms
The International Chamber of Commerce (ICC) is an organization originally created after the First World War with the aim of promoting prosperity in Europe by setting standards for international trade. It was this group that, in 1936, published a set of standardized terms for different types of navigation agreements, called Incoterms.
Incoterms are contractual specifications describing who bears the costs and risks of international transactions; they are subject to change at the discretion of the ICC. Due to the legal and logistical intricacies of international maritime transport, the CCI seeks to simplify things for businesses by standardizing its conditions. The terms were last updated in 2020, but a revision is currently underway and is expected to be released in 2020.