DDP Incoterms Explained: Delivered Duty Paid Into the US

Under DDP Incoterms 2020, the seller delivers the goods to the buyer’s named place cleared for import, with every duty, tax and customs formality paid, which the ICC calls the maximum obligation of all eleven rules. For a shipment into the United States, that makes the foreign seller, or a party it arranges, the importer of record: the entity that files the entry, posts the bond, pays duty and answers to CBP for classification and value. From January 5, 2027, a foreign importer of record can make consumption entries only if it is CTPAT validated or uses a CTPAT-validated customs broker.

This guide covers the obligations under Delivered Duty Paid, what it means for a foreign seller to act as US importer of record, the duties and fees the seller funds, the 2027 foreign IOR rule, and how to build a DDP quote that survives a CBP valuation review. The direct comparison with DAP has its own page, DAP vs DDP, and all 11 rules are in the Incoterms chart.

Seller and Buyer Obligations Under DDP

The DDP seller contracts and pays for carriage to the named place, bears all risk until the goods arrive there, and carries out and pays for export, transit and import clearance, including duties and taxes. The buyer pays the price, takes delivery and pays for unloading at destination unless the seller’s carriage contract already covers it. Neither party has an insurance obligation, although the seller, carrying risk to destination, normally insures its own exposure.

The table maps the ICC articles onto a shipment entering the United States. The column most US buyers overlook is the last row: under DDP the buyer’s own customs compliance obligations are minimal, but so is its control over how the goods are declared.

The Seller as US Importer of Record

A DDP seller must enter the goods in its own name or arrange an eligible party to do it. Under 19 U.S.C. 1484(a)(2)(B), entry is filed by the owner or purchaser of the goods, or by a licensed customs broker that the owner, purchaser or consignee designates, and the importer of record must be one of those eligible parties. Hiring a broker to file does not move the liability: the broker acts as agent, and the seller remains the non-resident importer answerable for the entry.

A nonresident corporation entering in its own name has two prerequisites under 19 CFR 141.18: a resident agent in the state of the port of entry authorized to accept service of process, and a bond on CBP Form 301 with a resident corporate surety. Those mechanics are covered in the DAP vs DDP comparison linked above. What matters here is that a DDP contract signed before both exist is a promise the seller cannot perform on arrival.

Some sellers route DDP through a US subsidiary or a third party acting as importer of record. That works only if the party is a genuine owner or purchaser of the goods, or a broker acting as importer of record within the limits CBP allows, and it shifts the compliance burden rather than removing it. Whoever is named on the entry carries the reasonable-care duty, the recordkeeping obligation and the penalty exposure under 19 U.S.C. 1592 for false or negligent declarations.

Duties, Fees and Taxes a DDP Seller Pays

Under DDP the seller pays every duty, tax and charge levied because the goods are imported. On a US entry that stack starts with the ordinary duty from the Harmonized Tariff Schedule and can include additional duties under Section 301, Section 232 and other Chapter 99 measures depending on origin and product. The seller’s quote therefore depends on correct classification and origin, two things the seller often has never had to determine under US rules.

Two user fees sit on top. The merchandise processing fee is 0.3464 percent ad valorem on formal entries under 19 CFR 24.23, within annually adjusted minimum and maximum amounts, payable by the importer of record at entry summary. The harbor maintenance fee is 0.125 percent of the value of commercial cargo unloaded from a vessel at a covered US port under 19 CFR 24.24. Both are calculated on the customs value, not on the DDP invoice total.

Two cost lines regularly break DDP quotes. Duty rates can change between quotation and arrival, and under DDP the seller absorbs the difference unless the contract says otherwise. And when CBP later finds additional duty due on an entry, the importer of record receives the bill, which for a DDP seller can arrive long after the sale has closed and the price has been collected.

Bond, CTPAT and the January 2027 Foreign IOR Rule

CBP’s interim final rule on foreign importers of record, CBP Dec. 26-19 published at 91 FR 69977 on November 6, 2026, takes effect on January 5, 2027. It divides every importer of record into two categories. A U.S. importer of record under new 19 CFR 110.2 is a US citizen or lawful permanent resident, or an entity located in and organized under the laws of the United States that either has at least 51 percent US citizen or permanent resident beneficial owners with control, or directly owns a significant amount of unencumbered US real property. Every other importer of record is a foreign importer of record under 19 CFR 110.3, including some US-incorporated subsidiaries of foreign groups.

Under new 19 CFR 141.21, a foreign importer of record may enter merchandise for consumption, on a formal entry or on an informal entry filed on CBP Form 3461 or 7501, only if it is validated in CTPAT or designates a licensed customs broker that is CTPAT validated to make entry or act as importer of record. The rule’s preamble notes that only Canadian foreign importers are currently eligible for CTPAT validation, so most DDP sellers outside Canada will need a CTPAT-validated broker. CBP’s announcement adds that a pending CTPAT application does not count, and that entries will carry new data fields identifying the US importer of record, the party acting on behalf of, and the principal on the power of attorney.

For DDP, the consequence is direct. A foreign seller quoting DDP for arrivals after January 5, 2027 needs its bond, its resident agent where 141.18 applies, and a CTPAT-validated broker relationship in place before the goods ship. CBP states the purpose plainly: foreign importers often have few US assets and their bonds can saturate before duties and penalties are paid. Our page for foreign importers of record sets out how the designation works in practice, and the CTPAT certification page explains what validation involves.

Pricing a DDP Quote That Holds Up at Entry

A DDP price is a landed price, but the US customs value is not the DDP price. Transaction value under 19 U.S.C. 1401a is the price actually paid or payable, which excludes international freight and insurance under section 1401a(b)(4)(A). Section 1401a(b)(3) also excludes US transportation after importation and the customs duties and Federal taxes payable because of importation, provided each is identified separately from the price of the goods. A DDP invoice that shows one lump sum gives the importer nothing to deduct.

The defensible structure is an invoice that states the goods value and lists international freight, insurance, US duties and fees, and US inland delivery as separate lines, each supported by the freight bill, the policy and the entry summary. Statutory additions such as packing, assists and royalties still apply under 1401a(b)(1). The customs valuation guide covers each deduction and addition, and a landed cost model turns them into a quote.

US buyers often ask whether DDP or FOB is better. FOB, or FCA for containers as explained in our FCA Incoterms guide, gives the buyer control of freight, the entry and the declared value, at the cost of running its own import program. DDP gives a single landed number but leaves the buyer dependent on how the seller declares the goods. If the seller cannot clear, the buyer’s cargo waits at the port while the parties renegotiate terms.

Frequently Asked Questions