DDP Isn’t a Shield — It’s a Trap

If you're sourcing from China and your supplier is offering DDP (Delivered Duty Paid) terms, this might seem like a win — “they handle the duties!”

But here’s the truth: if they lie on the import documents (and let’s be honest, they will), you, the U.S.-based buyer, can still be held civilly and criminally liable.

⚠️ DDP ≠ Protection

Just because your supplier is listed as the Importer of Record doesn’t mean you’re safe.

If you benefit from the shipment, and the fraud was obvious or avoidable, you’re exposed.

You don’t have to participate in the fraud — you just have to benefit from it while ignoring the red flags.

⚖️ The Legal Standard Is: “Knew or Should Have Known”

You don’t have to submit the customs entry. You don’t even have to see it.

If the declared value, origin, or classification is clearly wrong — and you knew, or should have known — and you accepted the goods anyway?

That’s enough to trigger liability under:

• 19 U.S.C. § 1592 – Customs fraud: negligence, gross negligence, or fraud
• The False Claims Act – Used by the DOJ to pursue importers for underpaid duties, aggressively

This isn’t about saving $100. Some Chinese-origin products are facing 170%+ tariffs. That’s tens of thousands in duties per container — and if your vendor fudges the numbers, you could be the one who pays.

📚 Real Cases Where U.S. Buyers Got Nailed

🟠 1. Homestar North America (2023)

• Bought from its Chinese parent using two sets of invoices.
• Fake (low) values declared to CBP, real value paid separately.
• Homestar didn’t file the entries — but they benefited.
• Result: Paid $798,334 to settle FCA charges. 👉 DOJ Source

🟠 2. Byer California (2019)

• Purchased DDP shipments from China.
• Vendor underreported value, and buyer should have known.
• Result: Settled with DOJ under the False Claims Act. 👉 Law Firm Summary

🟠 3. Yingshun Garments Buyer

• Buyer ignored obvious red flags in pricing and documentation.
• DOJ: they “turned a blind eye.”
• Result: Paid $1 million and had to implement a compliance program. 👉 LinkedIn Summary

✅ What You Can Do

• Be skeptical of DDP arrangements.
• If it sounds too good to be true — it probably is.
• Assume that if duties aren’t being paid, you’ll be the one left holding the bag.
• Just keep importing like you have and pay the duties due.

🔚 Final Thoughts

Yes, some sellers will save money by using DDP and letting the supplier undervalue the goods — and many of them will get away with it.

But others will get caught — and made into examples.

When that happens, the penalties under the False Claims Act can be devastating:

➡️ Triple the underpaid duties,

➡️ Criminal charges if there's intent,

➡️ And years of audits and reputational damage.

And with the likely creation of the External Revenue Service, early enforcement is expected to be aggressive. New agencies build credibility by making headlines — and that means high-profile crackdowns right out of the gate.

Disclaimer:

🚫 This is not legal advice.

This is a general warning based on public enforcement actions and legal precedent.

If you’re unsure about your exposure, consult a licensed customs attorney or trade compliance expert.