DDU - Delivered Duty Unpaid

DDU (Delivered Duty Unpaid) is an Incoterm that was used in international trade to describe the obligations of the buyer and seller regarding the delivery of goods. However, it was replaced by the DAP (Delivered at Place) Incoterm in the 2010 version of Incoterms. Despite this, DDU is still commonly referenced in contracts and agreements that predate the change.

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What DDU Involves:​

Under DDU, the seller delivers the goods to a named place in the destination country, but the buyer is responsible for paying any duties, taxes, or customs clearance fees once the goods arrive.

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Seller’s Responsibilities:

1. Transport Costs: The seller arranges and pays for all costs related to transportation, including export fees, international freight, and delivery to the agreed location (often the buyer’s premises or a designated point within the destination country).
2. Export Formalities: The seller handles all the export formalities in the country of origin, such as obtaining export licenses and completing export customs documentation.
3. Main Carriage: The seller arranges and pays for the main transportation leg, whether by sea, air, or land, and is responsible for delivering the goods to the destination country.
4. Risk Until Delivery: The seller assumes all risks of loss or damage to the goods until they are delivered to the agreed location in the destination country.
5. Unloading: The seller is typically responsible for unloading the goods at the delivery location unless specified otherwise.
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Buyer’s Responsibilities:

1. Import Duties and Taxes: The buyer is responsible for paying any import duties, taxes (such as VAT), and other customs-related charges once the goods arrive in the destination country.
2. Customs Clearance: The buyer is responsible for arranging import clearance and handling any necessary documentation with the customs authorities in the destination country.
3. Risk After Delivery: The buyer assumes all risk and responsibility for the goods once they are delivered to the named place but before customs clearance and duty payment.
4. Post-Customs Transportation: If the delivery point is not the final destination, the buyer is also responsible for any additional transportation needed after customs clearance.

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Key Features of DDU:​

• Duties Unpaid: As the name suggests, the main difference between DDU and other delivery terms (like DDP) is that import duties and taxes are not paid by the seller. The buyer must handle these after the goods arrive in their country.
• Buyer’s Risk at Customs: Once the goods arrive at the destination country, the buyer assumes responsibility for all customs procedures and import-related costs. This can introduce complexity for the buyer, especially if they’re unfamiliar with local customs regulations.

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Example:

If a manufacturer in China sells goods to a buyer in Brazil under DDU terms:

• The Chinese seller arranges and pays for transporting the goods to a named place in Brazil (for example, a warehouse or a port) and assumes all risks until delivery at that location.
• The Brazilian buyer is responsible for clearing the goods through Brazilian customs, paying import duties, taxes, and handling any post-delivery transport to the final destination.

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DDU vs DDP:

• DDU (Delivered Duty Unpaid): The seller is responsible for delivering the goods to the destination, but the buyer is responsible for paying any import duties, taxes, and clearing customs.
• DDP (Delivered Duty Paid): The seller assumes all responsibilities, including clearing the goods through customs and paying all import duties and taxes, ensuring the buyer receives the goods without any customs-related costs.

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Advantages and Disadvantages:

• For the Buyer: Under DDU, the buyer gains control over the customs process, but it also means the buyer must have a good understanding of the local customs procedures and be prepared to pay the duties and taxes.


• For the Seller: DDU is less burdensome than DDP since the seller is not responsible for managing customs and paying duties in the buyer’s country. This minimizes the seller’s risk, especially in unfamiliar or complex markets.

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Conclusion:

DDU (Delivered Duty Unpaid) was an Incoterm that required the seller to deliver goods to a specified destination in the buyer’s country without paying import duties or taxes. The buyer was responsible for customs clearance and all related import charges. Although DDU was replaced by DAP (Delivered at Place) in Incoterms 2010, it still remains relevant in some older contracts and agreements.