Valuation for Imported Goods
As part of the compliant entry process, goods must be classified and their value must be determined. Let’s dive into the crucial aspects of determining valuation for goods imported to the U.S. from abroad.
Determining Valuation
Customs allows for the calculation of import valuation utilizing the following methods:
Preferred Method: Transaction Value
Transaction value is the price actually paid or payable for the merchandise when sold for exportation to the United Sates...
PLUS amounts equal to: packing cost incurred by the buyer, any selling commission incurred by the buyer, the value, apportioned as appropriate, of any assists. any royalty or license fees that buyer is required to pay, directly or indirectly, as a condition of the sale, and the proceeds of any subsequent resale, disposal, or use of the imported merchandise that accrue, directly or indirectly, to the seller.
MINUS amounts equal to: cost of chargers for international freight, insurance, and other C.I.F., cost of chargers for technical assistance after importation, transporting the good after importation, the customs duties and other Federal taxes, including any Federal excise tax for which sellers in the United States are ordinarily liable.
Other Methods
If the transaction value cannot be used or determined, CBP allows for the use of:
- Transaction Value of Identical Merchandise
- Transaction Value of Similar Merchandise
- Deduction Value
- Computed Value
- Values if Other Values Cannot be Determined
Why Valuation Matters
For the Importer
Proper import valuation ensures the correct appraisement of your merchandise and helps avoid any penalties of legal issues that can arise from incorrect valuation.
For CBP
Customs valuation is essential for collecting statical international trade data that helps inform government trade policies.
Valuation Compliance
To ensure full compliance, its helpful to run through this list of questions as well:
- Have you provided CBP with the correct declared value for your merchandise in accordance with 19 U.S.C. 1484 and 19 U.S.C. 1401a?
- Have you obtained a CBP ruling regarding valuation of your goods per 19 CFR Part 177 and can you establish that you followed the ruling reliably?
- Have you consulted the CBP valuation laws and regulations, CBP Valuation Encyclopedia, CBP informed compliance publications, court cases and CBP rulings to assist you in valuing merchandise?
- Do you know the total payment made, excluding international freight, insurance, and other C.I.F. charges?
- Do you know them terms of the sale? Whether there will be rebates, tie-ins, indirect cost, additional payments? If assists were provided or commissions or royalties paid?
- Are amounts actual or estimated?
- If you purchased the merchandise from a “related” seller, have you reported that fact upon entry? Did you assure the value submitted to CBP meets one of the “related party” tests?
- Have you assured that all legally required costs or payments associated with the imported merchandise (assists, commissions, indirect payments or rebates, royalties, etc.) have been reported to CBP?
- If you are declaring a value based upon a transaction in which you were/are not the buyer, have you substantiated that the transaction is a bona fide “sale at arm’s length” and that the merchandise was clearly destined to the United States at the time of sale?
- If you are claiming a conditionally free or special tariff classification or provision for your merchandise (GSP, HTS Item 9802, NAFTA), have you reported the required value information and obtained the documentation necessary to support the claim?
- Can you produce the required entry documentation and supporting information?
