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What are the risks of DDU in international trade? (What are the risks of non-dutiable delivery?)
Published:
2023-11-03
In the trade term, DDU is Delivered Duty Unpaid, which is often used in international import and export trade. It means "delivered duty unpaid", that is, the seller sends the goods directly to the domestic address designated by the import buyer. At the same time, it is necessary to contract the full cost and risk of shipping the product to the designated address (except for other customer fees, import duties and taxes that should be paid when importing).
In the trade term, DDU is Delivered Duty Unpaid, which is often used in international import and export trade. It means "delivered duty unpaid", that is, the seller sends the goods directly to the domestic address designated by the import buyer. At the same time, it is necessary to contract the full cost and risk of shipping the product to the designated address (except for other customer fees, import duties and taxes that should be paid when importing).
Therefore, in the 2000 General Rules, buyers are required to bear other costs and risks arising from the failure to clear import customs in a timely manner, and the 2000 General Rules propose: In the case of knowing that the import clearance of the foreign country is difficult or takes a long time, in order to prevent the trade from being affected by the buyer's failure to handle the import clearance in time, the seller had better not use ddu trade.
DDU obligation: The seller must contract to ship the product to the agreed address, all expenses and risks other than import procedures and import duties (including production costs, freight, appropriate profits, insurance premiums, export duties and other expenses)
Notes for DDU:
1, import customs clearance is convenient: under DDU delivery conditions, the seller must undertake the obligation to transport the goods to the agreed destination in the import country, and actually hand over to the buyer. However, the customs clearance procedures and import duties for the import of goods are not borne by the seller, but by the buyer. This is suitable for trade between some free trade zones and countries with customs unions. If the importing country is a difficult and time-consuming country, the buyer sometimes cannot complete the customs clearance procedures in time and smoothly. In this case, requiring the seller to assume the obligation to deliver the goods at the destination on time will carry certain risks.
Therefore, the seller should first understand the customs management of the importing country before adopting DDU in the export business. If it is expected that the import clearance will encounter difficulties, it should not adopt the DDU 2000 General Rules. If the two sides agree that the seller shall bear the risks and costs of the import clearance of the goods, it must be expressed in clear words in the contract.
2, good at handling insurance: According to the General Principles, the seller has no obligation to conclude an insurance contract when the transaction is made on DDU terms, because DDU belongs to the actual delivery, and the risk before delivery is borne by the seller. Whether the insurance contract is concluded or not has nothing to do with the buyer. The seller is responsible for transporting the goods from the exporting country to the final destination in the importing country, which involves many links and long distance transportation, and the possibility of damage caused by disasters or accidents is high. Therefore, the seller should transfer the risk by means of insurance.
3, generally do DDU is the exporter has a company in foreign countries, belongs to the nature of business, the exporter is responsible for transporting the goods to the customer's hands, the customer itself does not provide any customs clearance documents and certificates.
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