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Incoterm DDP

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The incoterm DDP is a type of commercial sale transaction between different countries, characterized in particular by attributing to the seller the responsibility for all costs related to the operation in the matter of transport, insurance or customs expenses.

In terms of trade, the International Chamber of Commerce defines a series of types of agreements or incoterms among which the DDP stands out. This modality of sale between different territories is characterized by attributing to the buyer the responsibility in terms of costs of carrying out the operation.

The term in acronym (delivery duty paid) shows what is described. It's in the hand of the selling agent the rush of all necessary expenses to get the goods to destination.

That said, it's assumed that this modality of international trade assumes that it's the selling company that has a significantly higher level of risk. This often causes the deals reached through DDP to involve higher prices for the buyer.

Basic implications of a DDP type trade agreement

In cases where a sale is made through an incoterm DDP agreement there will be different key points to consider:

- All economic management related to the operation is borne by the seller, from packing and transport costs to customs and tariff rates, both at the port of origin and upon arrival at the port of destination.
- These expenses include those of insuring the merchandise through a policy in the event of possible loss and deterioration, also attributed to the offering company.
- The expenses of possible internal transportation in the country of destination are commonly included in the foregoing, although it's possible prior agreement between the parties that it's the buyer agent that carries with them.
- Compared to other examples of incoterms exclusive to the maritime environment, a DDP can be applied to sales made by air or land.

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