A valuation challenge is a customs or trade compliance dispute where an importer questions, defends, or corrects the declared value of imported goods. Customs authorities use declared value to calculate import duties, VAT, and other taxes, so an incorrect valuation can lead to delays, additional charges, audits, or penalties. A valuation challenge may involve invoices, transfer pricing documents, freight costs, insurance, royalties, assists, or proof that the declared transaction value is accurate. In the U.S., CBP may challenge valuation when invoice prices appear inconsistently low, related party transactions raise concerns, or benchmark data indicates undervaluation.
- CBP may issue a CF-28 (Request for Information) asking the importer to support the declared value
- Failure to adequately support the value may result in CBP assessing a higher dutiable value
- Importers must maintain commercial invoices, purchase orders, and proof of payment for five years
- Related party transactions are most commonly subject to valuation challenges
Related terms: Customs Valuation, Related Parties, Commercial Invoice, Non-Reimbursement Statements.
