Valuation of Imported Goods

Valuation is the process of determining the worth of an imported product for the purposes of calculating the amount of duty payable and making the declaration to Customs and Border Protection. Appraisement, also known as valuation, of imported merchandise is an important part of the import process. CBP places a great deal of attention on appraisement, and it is a frequent area of investigation in compliance reviews. Even though the invoice from the foreign supplier may state one amount, there may be additional costs that are not included that should be included for customs purposes. Importers and brokers often look at the total value listed on the invoice, and never think about all the components that may be included or not included in that value. Some of the components belong in the total value, while others do not. Determining what components of the price should be included in the dutiable value, and which should not, is the key to effective appraisement

Even though the broker usually generates the CBP 7501 containing the information about value, the broker can only report the information provided by importers. The importer is legally responsible for reporting the value of imports to Customs and Border Protection. This obligation makes sense because the importer initiates the purchase of imported products, pays for them and is in the best position to know the details about the transaction that created the import. Brokers also need to know about valuation because brokers are the "specialists" on customs issues and are hired by importers to assist them in facilitating transactions with CBP. Brokers can be excellent resources when importers need assistance or guidance with valuation issues. If you need help with your taxes, you might go to an accountant for assistance. If you are an importer and you need help with your imports, you might go to a broker or other expert. Both importers and brokers must use reasonable care in fulfilling their responsibilities for the entry of imported merchandise and both should develop a good understanding of valuation rules and regulations. Some of the tools available for learning about various valuation issues include:

• Title 19 Code of Federal Regulations, Part 152 (19 CFR 152)
• Title 19 United States Code, Part 1401a (19 U.S.C. 1401a)
• U.S. Customs Rulings
• Bona Fide Sales & Sales for Exportation to the U.S. (ICP)
• Buying & Selling Commissions (ICP)
• Customs Valuation Encyclopedia (ICP)
• Customs Value (ICP)
• Proper Deductions for Freight & Other Costs (ICP)

Note: You will see the terms "appraisement" and "valuation" used interchangeably throughout our discussions on valuation.

Next Monday we will discuss the methods of valuation. If there are any specific import topics you would like to see discussed in the blog, please feel free to post a comment or send your suggestions to inquiries@boskage.com.