Dutiable Value: How CBP Values Imported Goods

Most imports are valued at transaction value: the price actually paid or payable for the goods when sold for export to the U.S., plus certain additions, under 19 U.S.C. 1401a. The additions are packing costs, selling commissions paid by the buyer, assists, royalties and license fees that are a condition of sale, and resale proceeds that go back to the seller. International freight and insurance, and U.S. duties, are left out. Ad valorem duty is a percentage of this number, so every dollar of overstated value costs duty.

What gets added

• Packing costs paid by the buyer.
• Selling commissions paid by the buyer. Buying commissions are not added.
• Assists: molds, tools, materials or design work supplied to the manufacturer free or at a discount.
• Royalties and license fees the buyer must pay as a condition of the sale.
• Proceeds of later resale that go to the seller.

What gets left out

• International freight and insurance from the foreign port to the U.S.
• U.S. duties and fees.
• Costs after importation, such as U.S. inland freight, assembly or installation, when stated separately.

Where importers overpay

• Duty paid on freight that was bundled into a CIF or DDP price. See Incoterms and customs value.
• Buying agent fees added by mistake.
• Missing the first sale price in a multi-tier chain. See first sale.

Where importers underpay

• Unreported assists, which is a common audit finding.
• Royalties left out of value.
• Related-party prices that are not at arm's length. See related-party valuation.

How Caspian checks value

Caspian compares entered values against invoices and freight terms. See our trade audit and PSC services.

Works Cited:

• 19 U.S.C. 1401a, Value
• 19 CFR Part 152, Classification and appraisement