Related parties are businesses or individuals with a close ownership, control, family, management, or financial relationship that may influence a transaction. In customs and international trade, related-party transactions are important because customs authorities may review whether the declared import value reflects an arm’s-length price. Related parties can include parent companies, subsidiaries, affiliates, shareholders, directors, officers, partners, or family members involved in buying, selling, importing, or exporting goods.
In customs law, related parties are buyers and sellers who have a relationship that might influence the price of the transaction. CBP scrutinizes related party transactions to ensure the declared transaction value reflects an arm’s-length price rather than an artificially low intercompany transfer price.
- Parent company and subsidiary
- Affiliated companies with common ownership
- Companies with exclusive distributor relationships
- Employee and employer
CBP’s Test for Related Party Transactions
CBP will accept the transaction value in a related party transaction if it can be shown the price was not influenced by the relationship, either by comparing to unrelated party transaction values or by meeting one of CBP’s test values.
For related logistics context, see glossary entries on Customs Valuation, Commercial Invoice, Non-Reimbursement Statements, and CBP.
