Grumbling about …. DDP imports – the freight companies conspiracy

I heard a Customs official say that the way we import goods into the UK when they are sold as Delivered Duties Paid Incoterms Rule is “technically illegal” – come on guys, it’s either legal or it isn’t! 

Why illegal – well, if the Incoterms Rule DDP place of arrival is used in a contract then the selling is legally required to be named as the importer and pay all relevant customs duties and taxes (including VAT).  When shipping into the UK/EU this would mean that the overseas supplier is registered as an Economic Operator in the EU (in other words has an EORI). This, more often than not, is not the case so what legally should happen is the freight company carrying the goods into the UK should act under Power of Attorney on behalf of the exporter and make the declaration in their name against their EORI.  This would make the freight company the “Importer of Record” and therefore legally responsible for any errors or underpayment of duties.

BUT – what happens?  Well the freight companies don’t want to be legally responsible so they get the UK customers’ EORI – usually on the pretext of using it for VAT purposes (which is a different grumble rumbling) – and declare the goods at import with the Customer as the Importer of Record.  The forwarder, in their role as clearing agent, submits the entry to customs, often without checking how the customer would want them declared (well its DDP the customer has nothing to do with it!).  Hey presto, the UK customers is now the importer of record for something they have had no control over.

My advice – stop buying DDP and make a decision to take control of the import entry (eg change to Delivered at Place (DAP) named place of arrival) and take control of the freight forwarder.  Take control of declarations legally made in your name or insist on it being done correctly.

How can Strong and Herd LLP help?

Import Essentials

Essential Guide to Customs Procedures

Importers Workshop

Incoterms 2010 Explained

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