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Index > News > Landed, Duty Paid (LDP) and Delivered, Duty Paid (DDP) Terms
Landed, Duty Paid (LDP) and Delivered, Duty Paid (DDP) Terms
 
Article ID : 23
Audience : Default
Version 1.00.05
Published Date: 2009/12/29 1:10:00
Reads : 490

Customs is increasingly targeting LDP and DDP shipments. Such goods are sold by a foreign manufacturer or middleman, or through a US selling agent. They are imported by a US-based company, generally but not always an affiliate of the shipper or seller, and are usually drop-shipped to the customer. The import invoice amount is well below the price paid by the customer.


Customs is wary of such sale. It believes that they are often nothing more than a method of reducing duties by disguising the real sale price. It believes that the real sale, and the real value for duty purposes, is often not the price invoiced to the importer but rather that paid by the US buyer. To combat the practice, it often denies the importer the right to clear the goods, saying that only the true owner has the right to do so and in reality, title never passed to the importer. In other cases it seeks increased duties, based on the sales price to the final customer.
 
One does have the right to structure transactions so as to minimize liabilities for duties. There are several ways to structure such sales and remain well within the limits of what has been approved as a matter of law, but the failure to carefully do so invites problems.

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