Legal Definitions - DDU

DDU stands for Delivered Duty Unpaid.

DDU is an international shipping term that specifies the responsibilities of the seller and buyer regarding the delivery of goods. Under DDU terms, the seller is responsible for delivering the goods to a named destination in the buyer's country, covering all transportation costs and risks up to that point. However, the buyer is responsible for paying any import duties, taxes, customs clearance fees, and other charges that arise once the goods arrive in their country. Essentially, the goods are delivered to the buyer's doorstep, but the buyer must handle the final financial obligations related to customs and taxes.

Here are some examples to illustrate DDU:

• Example 1: Importing Specialty Coffee Beans

  A small coffee shop in New York orders a unique batch of specialty coffee beans from a farm in Colombia. The agreement is DDU New York. This means the Colombian farm (seller) arranges and pays for the shipping of the beans all the way to the coffee shop's address in New York. They cover the freight, insurance, and transportation risks. However, once the beans arrive at the U.S. border, the New York coffee shop (buyer) is responsible for paying any U.S. import duties, tariffs, and customs processing fees before the beans can be released and delivered to their door. If the coffee shop fails to pay these duties, the beans could be held at customs.

• Example 2: Receiving Custom-Made Furniture

  An interior designer in London commissions a bespoke dining table from a artisan workshop in Italy. The shipping terms are DDU London. The Italian workshop (seller) carefully packs the table, arranges for its shipment, and pays for its transport across Europe to the designer's studio in London. They bear the risk of damage during transit. Upon the table's arrival in the UK, the London interior designer (buyer) is then responsible for paying the applicable UK import VAT (Value Added Tax) and any customs duties before the table can be cleared through customs and delivered to their studio. The designer must ensure these fees are paid promptly to avoid delays.

• Example 3: Purchasing Industrial Equipment

  A manufacturing plant in Mexico purchases a specialized piece of machinery from a supplier in Germany. The contract specifies DDU Mexico City. The German supplier (seller) is responsible for crating the machinery, arranging its ocean freight, and ensuring it reaches the port or a specified warehouse in Mexico City. They cover all costs and risks associated with this international transport. Once the machinery arrives in Mexico, the Mexican manufacturing plant (buyer) must handle and pay for all Mexican import duties, taxes, and local customs clearance procedures to get the machinery released from the port and transported to their factory. The German supplier's responsibility ends once the machinery is available at the agreed-upon destination in Mexico, prior to customs clearance.