Two questions get confused, and Incoterms only answers one of them
A Chinese supplier sends a price with three letters after it. DDP. Most buyers read that as “duty is handled, customs is not my problem,” and on the commercial side they are right. On the legal side, they have answered a question nobody asked.
DDP is a delivery term from the Incoterms 2020 rules. It allocates cost and risk between a seller and a buyer, and it says the seller clears the goods for import and bears the duty. That is a contract between two private parties. The International Chamber of Commerce writes those rules. It does not administer United States customs law, and CBP does not read your sales contract before deciding who is accountable for an entry.
US law answers a different question. Under 19 U.S.C. § 1484, entry must be made by the importer of record, and that party can only be the owner or purchaser of the goods, or a licensed customs broker appointed by the owner, purchaser or consignee. Whoever occupies that field on the entry summary is the party held to the reasonable care standard, billed when duty turns out to be short, written to when CBP has questions, and penalized when a declaration was wrong.
So the useful question to put to a DDP supplier is not whether duties are included. It is this: whose name and whose importer number will appear in the importer of record field of the CBP Form 7501 for my shipment? Suppliers running a genuine US import program answer that in one sentence. The rest change the subject.
A Chinese company can be the importer of record. Look at what that requires.
Foreign entities do act as importers of record in the United States. The arrangement is usually called a non-resident importer, it is entirely legal, and some large Chinese exporters run it properly. It also carries requirements that are cheap to verify and expensive to fake.
- An importer identification number. A company with no US tax presence has no EIN, so it applies to CBP for an assigned number using the Create/Update Importer Identity Form, CBP Form 5106. That assigned number, not your EIN, is what belongs on the entry.
- A resident agent for service of process. Customs regulations require a non-resident corporation to have an agent in the state where the port of entry is located, authorized to accept legal process on its behalf. This is the requirement almost no “yes we can do DDP” sales rep has ever heard of.
- A customs bond written for a foreign principal. Sureties price the risk of chasing a defendant they cannot reach, so these bonds are harder to place. Ask which surety wrote it, what the bond number is, and whether it is continuous or single transaction.
- A licensed US customs broker holding a power of attorney from that foreign entity. The POA has to run from the actual importer of record. If the only POA in the file is the one you signed, then you are the importer of record, whatever the quote says.
Those four items carry a real running cost. Now put that next to a DDP price that lands below the duty figure you calculated for yourself. Something has been left out of that price, and it is rarely the freight.
Three arrangements that hide behind a cheap DDP number
Your own EIN is used. This is the common one. Somewhere during onboarding you emailed a scan of your EIN assignment letter, or signed a customs power of attorney described as “for clearance purposes,” and entries have been filed with you as importer of record ever since. You are never shown the 7501. The address on file is the broker’s. Whatever CBP mails goes somewhere you have never seen.
Someone else’s bond carries the entry. Entries are filed under an importer number belonging to an entity you have no relationship with, sometimes a thin US company that lends its bond to consolidated cargo for a fee. The model holds until claims saturate the bond or the entity stops answering the phone. Then CBP starts looking for the party that owned and paid for the goods, and the paper trail is your purchase order and your wire transfer.
The consignment is split to sit under a value threshold. Low-value entry pathways for China-origin goods have been narrowed sharply, and the current position should be checked rather than assumed on the day you ship. Our note on de minimis on China imports covers how the mechanism works and where to verify its status. The practical test is simple: if a supplier’s DDP price only survives when the shipment is broken into many small parcels, ask what the price becomes when it cannot be.
What actually attaches to the party in that field
Duty is the smallest part of it. The obligations below follow the importer of record and stay attached long after the container is unloaded and the supplier has been paid in full.
| Exposure | Sits with the importer of record | Position of a foreign seller once paid |
|---|---|---|
| Underpaid duty discovered after the entry liquidates | Billed to the IOR, with interest | May owe you reimbursement under contract, which is a civil claim you would have to pursue abroad |
| Penalties for a materially false statement or omission (19 U.S.C. § 1592) | Assessed against the IOR, in tiers that escalate from negligence to gross negligence to fraud | Outside CBP’s practical reach |
| Producing entry records on demand for five years from entry | A legal duty of the IOR, enforceable on its own | None |
| CBP Form 28 request for information, Form 29 notice of action | Mailed to the IOR at the address on file, with a deadline to reply | Never sees them |
| Forced labor detention under UFLPA | Only the IOR can file the rebuttal and the supply chain evidence | Cannot respond on your behalf |
| Importer Security Filing accuracy and timing | Liquidated damages claims run against the ISF importer, normally the IOR | None |
| Exclusion, seizure or forfeiture of the goods | The IOR is the party who can contest it | Already paid, and the cargo loss is yours |
Two features of the system make this worse than it first looks.
An entry is not finished when the goods are delivered. It is finished when it liquidates, which happens later, can be extended by CBP, and can produce a rate advance or a supplemental duty bill long after you have sold the stock. Your window to protest runs from liquidation, not from delivery, so people who assume the file closed at the warehouse door discover the deadline after it has passed.
Then there is recordkeeping. The importer of record must retain entry records and produce them on request for five years from the date of entry. If the filing was done by another party’s broker, on an invoice you never saw, showing a value you did not set, you are still the party legally required to produce documents that were never in your hands.
How to find out what has already been filed under your name
You do not have to take anyone’s word for this. Four routes, roughly in order of usefulness.
- Open an ACE Secure Data Portal importer account. CBP lets importers hold a portal account tied to their importer number, with a designated trade account owner on your side. Once it is live you can pull reports on entries filed under your number and read what was declared. Setting it up takes paperwork and does not happen overnight, but it is the only view that does not depend on someone volunteering information to you.
- Ask the broker for your own entries. If you are named as importer of record, ask for the filed 7501 and the invoice as filed for every entry in the past twelve months. A broker who declines to release entry documents to the party named as importer of record has told you something important.
- File a FOIA request with CBP. Slower, and worth it when you do not know which broker filed, or when a relationship has soured. Request entry records associated with your importer number across a date range.
- Audit your powers of attorney. Ask every broker and forwarder you have ever onboarded with to send you a copy of the POA they hold, then revoke the ones you no longer want live. A forgotten POA is the usual reason entries keep appearing under a name that stopped importing years ago.
Five documents to demand before you accept a DDP quote
| Ask for | What you are reading it for | What a bad answer sounds like |
|---|---|---|
| A filed CBP Form 7501 from a recent shipment, redacted | The importer of record name and number, the ultimate consignee, the surety and bond type | “Customs paperwork is confidential, we cannot share it” |
| The customs power of attorney on file | Whose authority the broker is acting under, and whether it is yours | “The broker keeps that, we do not have a copy” |
| Bond details: surety name, bond number, continuous or single transaction | Whether a bond exists at all, and in whose name | A bond number with no surety attached to it |
| The commercial invoice and packing list as filed | Whether the declared value matches what you actually paid | “We use a separate invoice for customs” |
| Evidence that duty was paid on the entry | A broker duty invoice or statement reference tied to the entry number | “Duty is included in the price, there is nothing to check” |
The fourth row is the one to watch. A separate customs invoice, quietly cheaper than the one you paid against, is what makes an implausible DDP price arithmetically possible, and the party who carries that declaration is whoever is named as importer of record.
The tariff question you should not answer from a blog post, this one included
Duty on a China shipment is not a single number. It is a stack: the base rate for your classification, plus whatever trade remedy programs apply to that subheading and origin, plus antidumping or countervailing duty if your product falls inside the scope of an order, plus the processing and harbor fees. Move the classification by two digits and the whole stack moves with it.
Any specific rate you read anywhere may already be stale, because the programs sitting on top of the base rate change on their own schedules and several carry review or expiry dates. What lasts is knowing where to look.
- Base rate. Look your product up in the Harmonized Tariff Schedule published by the USITC, and read the section and chapter notes rather than trusting the plain-language description.
- Trade remedy programs. Check whether your subheading appears on the current action lists and whether any exclusion is live. Our page on Section 301 tariffs on China imports explains how the list structure and the exclusion process work, which is the part that does not change.
- Antidumping and countervailing duty. Search the scope of active orders by product description, not by supplier name. Cash deposits here can exceed ordinary duty by a wide margin and are trued up years later.
- Changes between updates. CBP publishes implementation messages to the trade, and legal changes appear in the Federal Register before secondary sources catch up.
- Certainty for one item. A binding ruling request settles the classification argument for that product, in writing, in advance.
Once you have a rate you trust, run it through a full landed cost calculation and set the result beside the DDP number. A large gap is not a bargain, it is a question. Something is financing it, and the party who eventually pays is the importer of record.
What to ask for, and wording that produces a straight answer
Two arrangements are worth accepting.
The seller genuinely acts as a non-resident importer. Get it in writing before you order: the legal name of the importing entity, its CBP-assigned importer number, the surety and bond number, the licensed broker’s name and filer code, and an undertaking to send you the filed entry summary and the invoice as filed after each shipment. If all of that exists, it will take one email to produce.
You are the importer of record, and you know it. Here DDP is simply a pricing convention: the seller prepays duty and you reimburse it. You appoint your own broker, you approve the classification and the declared value before filing, and the entry documents come to you. It is a little more work and completely under your control. If you go this way, read through the customs clearance steps first so you know what your broker will need from you and when.
The email that gets a usable reply is short. Something close to: “Before we confirm the order, please tell me which legal entity will be named as importer of record on the US entry, its importer number, and the surety and bond number. If it will be our company, please confirm that in writing and send us the entry summary after each shipment.” A supplier with a working import program answers with facts. A supplier who replies with reassurance about how everything is taken care of has also answered.
If you have already found an entry you do not like
Two mechanisms exist and both are time-sensitive. Before an entry liquidates, a post summary correction can fix classification or value through the broker. Where an error is material and may amount to a violation, the regulations provide for prior disclosure, which substantially limits penalty exposure when it is made before CBP has begun looking. There is also a provision allowing a nominal consignee to file a declaration naming the actual owner, together with that owner’s bond, and be relieved of liability, though the window is short and whether it fits your facts is a judgment call. Take all three to a licensed customs broker or customs counsel before you write anything to CBP.
A DDP quote that names the importer of record is a different product
Nothing above says avoid DDP. Plenty of importers use it well, and for small or repetitive shipments it removes real friction. The point is narrower: DDP describes who pays, and it says nothing about who answers. Those two roles are assigned by different systems, and the second one is the expensive one.
So make it a line item. When you send a shipment out for pricing, ask every forwarder on the list, this one included, to state in the quote which entity will be named as importer of record and under whose bond. It costs nothing to ask, it takes one line to answer, and it separates the quotes worth comparing from the ones that only look cheap. When you are ready, request a quote and put that requirement in the first message.