With the introduction of the Carbon Border Adjustment Mechanism (CBAM), businesses might question whether their logistics and supply chain strategies are still relevant and up-to-date given these recent environmental changes.
A common misconception that has been circulating recently is to switch from Delivery Duty Paid (DDP) to Delivery At Place (DAP) to better manage CBAM requirements. However, we believe that this approach would not resolve anything. At RM Boulanger, we highly recommend continuing to sell on a DDP basis to ensure seamless operations and customer satisfaction.
The Misconception of switching to DAP
Some suggest that switching from DDP to DAP will simplify CBAM compliance. This misconception can lead to unnecessary complications.
Regardless of the incoterm, CBAM data must be provided by the seller/producer of the goods. Shifting to DAP only transfers the reporting burden to your customers, creating additional challenges, administrative headaches, and therefore lead to potential client-loss.
Consequences of switching to DAP
Switching from DDP to DAP can have several negative impacts on your business:
- Administrative burden: Your customer becomes the importer of record and therefore responsible for VAT obligations, CBAM reporting and increased administrative workload.
- Operational disruptions: Shifting incoterms can lead to operational inefficiencies, compliance issues and potential import blockage at customs.
- Customer dissatisfaction: Burdening your customer with CBAM responsibilities can strain the relationship and reduce customer loyalty.
- Client loss: Shifting the burden to your customer can drive him away, resulting in a loss of business.
Switching from DDP to DAP is like trying to swat
a fly with a bazooka:
You might hit the target, but you’ll cause a lot of unnecessary damage along
the way.
Why are DDP and CBAM compatible?
At RM Boulanger, we believe that DDP and CBAM can coexist perfectly.
Here’s why:
- VAT obligations: RMB is well experienced in helping businesses sell on a DDP basis and will take care of all your VAT obligations, ensuring smooth and compliant operations.
- Efficient CBAM compliance: We handle all CBAM obligations and declarations on your behalf, ensuring compliance without disrupting your operations.
- Enhanced customer service: By managing VAT and CBAM requirements, we provide an added layer of reliability, fostering loyalty and satisfaction.
Switching from DDP to DAP is not the solution for
managing CBAM compliance.
At RMB, we offer a better approach by handling CBAM obligations while you
continue to benefit from the advantages of DDP.
Keep your customers happy,
your operations smooth, and your compliance effortless with RM Boulanger.
