Landed, Not Loaded: The Incoterm That Decides Who Clears Customs

A container of BESS equipment arrives in Burgas. The vessel has discharged, the terminal has moved it into storage and storage charges are already running. What happens next was decided months earlier in a supply-contract clause many procurement teams treat as a formality: who is the Importer of Record?

Series

The Buyer's Desk: Commercial Decisions That Define the BESS Project

1. Ep. 1 · Payment Terms - Who Controls the Cargo
2. Ep. 2 · Who Pays for the Delay - Deadlines and Penalties
3. Current episode: Ep. 3 · Landed, Not Loaded - Who Is the Importer
4. Ep. 4 · Spare Parts - Warranty and Returns
5. Ep. 5 · Storage or Flow - The Customs Buffer

The Decision on the Table

When an EPC team negotiates BESS equipment supply from a manufacturer outside the EU, one contract line determines who will appear as Importer of Record in the customs declaration. The decision is closely tied to the selected Incoterms structure, particularly DAP versus DDP.

The distinction can look administrative until the cargo reaches Burgas and tax, customs, regulatory and future EPR responsibilities have already been allocated in ways the project team never fully discussed.

The Options and What They Mean

DAP – Delivered at Place

Under DAP, the seller carries cost and risk to the named destination, while import clearance, duties and import VAT remain the buyer's responsibility. In practical terms, the buyer is the Importer of Record.

• The buyer declares the cargo using an EORI valid for the customs-clearance structure.
• The buyer funds import duty and VAT.
• The buyer carries the consequences of tariff-classification errors.
• Where available, the buyer may use postponed-VAT accounting.

DDP – Delivered Duty Paid

Under DDP, the seller takes on transport, customs clearance, duties, taxes and delivery to the named place. In theory, the seller is the Importer of Record.

• The seller needs the necessary EORI/customs representation structure.
• The seller must deal with import VAT and recovery rules.
• The seller carries tariff-classification responsibility where it is genuinely the declared importer.
• The seller may also become the party placing the battery on the EU market for EPR purposes.

The choice between DAP and DDP is therefore not merely about convenience or freight cost. It determines who is standing in front of customs when something goes wrong.

The Hidden Obligation

When DDP Comes from Outside the EU

Most BESS equipment for CEE comes from manufacturers headquartered outside the EU. A non-EU manufacturer offering DDP takes on obligations it may not be able to perform directly without local registration or representation.

If the supplier has no suitable EORI/import structure in Bulgaria or another Member State, it may need a fiscal or customs representative. A freight forwarder or customs agent can file declarations, but it cannot simply erase the legal need for a genuine importer.

A common practical failure is that the contract says DDP, yet the buyer is entered as importer because the seller lacks the required setup. At that point the contractual label and the customs reality diverge.

Import VAT: Temporary or Permanent Cash Cost

Under DAP, a VAT-registered buyer may be able to recover import VAT through the normal VAT system, subject to the applicable rules. The cash impact can therefore be temporary.

Under DDP from a non-EU supplier without the correct VAT structure, import VAT can become a non-recoverable cost embedded in the price. That is a very different commercial outcome.

Tariff Classification: Who Carries the Risk

The source uses HS 8507.60.00.90 for lithium-ion BESS batteries and treats PCS equipment as a separate tariff classification. A classification error can lead to:

• Additional duty and interest assessed retrospectively.
• Administrative penalties.
• Greater scrutiny of future shipments.

The declared importer bears customs responsibility. If a DDP supplier quietly places the buyer on the declaration, that responsibility moves back to the buyer regardless of what the sales contract said.

EPR Obligations under the EU Battery Regulation

EU Battery Regulation 2023/1542 introduces Extended Producer Responsibility for the entity placing batteries on the EU market. For industrial batteries, that includes registration, collection/recycling obligations and reporting.

Under a clean DDP structure, the seller may be the entity placing the battery on the market. Under DAP, the buyer/importer may assume that role. The project must verify which entity is registered and compliant rather than relying only on the Incoterm label.

Transshipment Port: Where Is Customs Clearance Done?

A typical China-to-Bulgaria BESS route may transship through Piraeus or another hub. If the goods are fiscally cleared at the transshipment port, the importer needs the appropriate local EORI/representation structure. If they move under T1 transit, final clearance occurs at destination.

A freight forwarder can organise the process, but unless it is acting in the required legal representative capacity it is not automatically the Importer of Record.

What It Costs When Things Go Wrong

The source models a Bulgarian BESS project sold DDP to an inland point. The manufacturer has no Bulgarian EORI and has not appointed the necessary representative. To clear the cargo, the buyer is entered as importer with its consent.

The buyer pays duty and VAT because otherwise the containers remain at port. The contract has no clear reimbursement mechanism because everyone assumed the forwarder's “DDP service” solved the issue.

Six months later, customs audits the declaration and finds PCS units classified incorrectly as batteries. Additional duty and interest are assessed against the buyer because the buyer is the Importer of Record.

Later, the environmental regulator asks for proof of EPR registration. The non-EU supplier was never registered. The operating project is now dealing with a compliance problem that should have been settled before shipment.

What to Agree before Signing

If you accept DAP:

• Confirm your EORI and customs-clearance setup.
• If clearance will occur in another Member State, arrange the necessary local representation.
• Check postponed-VAT options.
• Use a customs broker experienced in BESS classification.
• Obtain technical documentation supporting the tariff codes for batteries and PCS separately.
• Address EPR registration as the importer placing industrial batteries on the market.

If you accept DDP:

• Require written evidence of the seller's EORI/customs-representation structure.
• Obtain proof of the relevant EPR registration.
• Include indemnity wording for customs reclassification and additional duty.
• Define who bears import VAT and how it is recovered.
• Create a reimbursement mechanism if the buyer is forced to act as importer.

Regardless of Incoterm:

• Do not assume DDP means zero administrative work for the buyer.
• Make sure Packing List weight is reconciled with VGM.
• Give the customs broker final commercial documents and final B/L data, not drafts.
• Allow realistic customs-clearance time even with perfect documentation.

What to Remember

• DAP versus DDP determines far more than freight cost. It shapes who is Importer of Record and who carries customs and tax responsibility.
• DDP from a non-EU supplier only works cleanly if the supplier has the necessary EU import structure or representative.
• Import VAT treatment can materially change project cash flow.
• Tariff-classification liability follows the declared importer.
• Battery EPR obligations follow the entity placing the product on the market and must be verified independently of the Incoterm label.

Frequently Asked Questions

Q: What is the customs-responsibility difference between DAP and DDP?

A: Under DAP, the buyer normally handles import clearance and acts as importer. Under DDP, the seller is supposed to take that responsibility, but only if it has a workable legal/customs setup.

Q: Can a Chinese manufacturer genuinely deliver DDP into Bulgaria?

A: Yes, but it needs an appropriate EU/Bulgarian import structure or representative. Without that, the buyer can end up appearing as importer despite the DDP contract.

Q: What duty does the source use for BESS batteries?

A: 2.7% ad valorem for lithium-ion batteries under HS 8507.60.00.90, with PCS classified separately.

Q: Can import VAT be recovered under DAP?

A: A VAT-registered importer using the equipment for taxable activity may be able to recover it under the applicable VAT rules.

Q: What is EPR under the Battery Regulation?

A: Extended Producer Responsibility requires the party placing batteries on the market to meet registration, reporting and collection/recycling obligations.

Q: Who is liable for an incorrect tariff classification?

A: The Importer of Record named in the customs declaration.

Q: What if the supplier offers DDP but has no EORI/import setup?

A: Require a proper representative structure or restructure the deal to DAP with explicit responsibility allocation rather than allowing an accidental importer-of-record situation.

Next episode

The Spare Parts You Didn't Order

What happens when a module fails commissioning, the contract is silent, and the project still has to move a defective Class 9 component back through the supply chain?