DDP (Delivered Duty Paid) is the Incoterm that places the maximum obligation on the seller. The seller delivers the goods, cleared for import, at the named destination — paying all transport, export clearance, import clearance, duties, taxes, and fees. The buyer's only obligation is to receive the goods.
Under DDP, the seller must:
- Arrange and pay for all transport to the named destination
- Handle export clearance in the country of origin
- Handle import clearance in the destination country
- Pay all import duties, taxes, MPF, HMF, and Section 301 / AD/CVD duties
- Bear the risk of loss until the goods are placed at the disposal of the buyer
DDP is the buyer's-dream Incoterm because it provides a landed-cost price with no further import burden. But it creates significant practical problems for the seller, especially in the U.S.:
- The seller must act as Importer of Record — A foreign seller selling DDP into the U.S. must register with CBP, obtain a customs bond, and file entry summaries. This requires a "non-resident importer" arrangement, which involves additional compliance complexity, surety scrutiny, and IRS withholding considerations.
- The seller bears all tariff risk — Section 301 tariffs, IEEPA duties, AD/CVD orders, and reciprocal tariffs all hit the seller's margin, not the buyer's
- The seller has limited duty mitigation options — First sale valuation, for example, depends on factory-level pricing that the seller may be reluctant to disclose
Many DDP arrangements are practically infeasible for U.S. import without specialized non-resident importer support, and parties often migrate to DAP or DPU instead.