01Obligations under DDP
Seller: Full carriage, export + import clearance, duties and taxes, delivery.
Buyer: Only receipt of goods.
The precise split of the 10 obligation pairs (A1–A10 / B1–B10) is binding under the ICC Incoterms 2020 rules.
02Risk and cost transfer
Risk transfer: On arrival at destination, ready for unloading, after customs clearance.
Cost transfer: Seller bears all costs through delivery incl. duties and taxes.
For several Incoterms, the risk and cost points do not coincide — this is the biggest source of misunderstanding in international trade. Cargo insurance should always be aligned with the risk transfer point, not the cost transfer point.
03When to use DDP
Sales model that mimics domestic purchase for the buyer. Seller must hold EORI/VAT registration or an indirect representative in the import country — otherwise customs breaks the model.
Before choosing, verify: Can both parties operationally handle customs, carriage and insurance in the respective country? Are there tax implications (e.g. VAT under DDP)? Which documents (commercial invoice, certificate of origin, B/L, CMR, AWB) are required?
04Common pitfalls
1) Mode mismatch: DDP works for all modes — but always specify the named place precisely (city, country, optionally a terminal code) on the commercial invoice.
2) On-board notation: For sea Incoterms, a correct on-board notation on the B/L is critical for letter-of-credit settlement.
3) Insurance cover: Explicitly agree ICC A / B / C and the sum insured.
Frequently asked questions
What does DDP mean in practice?
Maximum seller obligation: delivered to buyer's door, fully duty-paid. Applicable to any mode of transport. Risk transfer: On arrival at destination, ready for unloading, after customs clearance.
Who pays cargo insurance under DDP?
No mandatory insurance. The buyer bears the risk from the transfer point onwards and should insure accordingly.
Is DDP suitable for containers?
Yes. The term applies to all modes, including container transport.