For businesses, this immediately raises a contractual issue. Ongoing supply contracts with fixed prices are particularly prone to disputes: must the seller deliver at the agreed price despite subsequently increased import duties – or are they entitled to charge a duty surcharge?
The answer does not follow solely from customs law, nor does it automatically follow from the Incoterms. The decisive factors are the contractual allocation of costs, price or ‘change in law’ clauses, and the applicable law.
New customs duties also affect old contracts
Whether a new duty applies does not generally depend on when the supply contract was concluded. Rather, the decisive factors are the date on which the relevant customs measure comes into force, the date of importation and any transitional rules for goods that have already been dispatched. Consequently, even a consignment that was ordered some time ago or is already in transit may be affected by a subsequent increase in customs duties.
Before any discussion about who bears the costs, it should therefore be clarified: does the measure cover the specific goods, their origin and the relevant date of import? When importing into the EU, the customs debt generally arises upon acceptance of the customs declaration. Union Customs Code, Article 77.
Three letters can determine the additional costs
An example illustrates the economic significance of Incoterms: if a German manufacturer sells a machine at a fixed price on a DDP Chicago basis, they generally also take responsibility for customs clearance and US import duties. If customs duties rise prior to importation, the additional cost initially falls within their sphere of responsibility.
In the case of a DAP Chicago delivery, however, import clearance is the buyer’s responsibility. The place of delivery may therefore be almost identical – but the economic customs risk is not. Under the Incoterms, the buyer bears the cost of import clearance and the corresponding duties under DAP, whilst the seller does so under DDP. ICC
A customs surcharge does not constitute a price adjustment
If the seller has agreed a fixed price, they cannot, in principle, simply add the customs duty increase as an additional item on the invoice. A ‘tariff surcharge’ or ‘customs surcharge’ does not, in itself, create a claim for payment.
The situation is different if the contract expressly stipulates that newly introduced or increased customs duties may be passed on. A practical customs clause should answer the following questions:
- Which customs duties and goods are covered?
- What is the relevant cut-off date?
- How must additional costs be documented and notified?
- Are the costs passed on in full or shared between the parties?
- At what level of cost can the contract be renegotiated or terminated?
A general clause covering changes in legislation is only useful if it also covers tariffs and their impact on the price.
Force majeure is usually the wrong approach
New customs duties do not generally prevent delivery, but merely make it more expensive. Therefore, the issue is usually not one of exemption from the obligation to deliver, but rather whether the agreed price can be adjusted. Without a suitable contractual clause, a statutory adjustment to the contract is only possible in exceptional cases.
Conclusion
Customs duties are not just a matter for the customs department. In the case of ongoing supply contracts, they can quickly become a matter of pricing and dispute. Companies should therefore not be too quick to pass on or reject new duties, but should jointly review the customs role, Incoterm, price clause and applicable law.
For new contracts, an explicit customs clause is recommended. It provides clarity before a trade policy decision turns into a contractual dispute.
Key points in brief
A party liable to the customs authorities is not necessarily required to bear the cost definitively within the supply relationship.
Incoterms govern customs formalities, but do not replace a price or change-in-law clause.
Without an adjustment clause, new customs duties cannot automatically be passed on in fixed-price contracts.
