1. Can Your Declared Price Support Transaction Value?
CBP can accept transaction value only when the sale and price meet federal valuation requirements. The starting amount is the price actually paid or payable for goods sold for export to the United States, plus required additions. A review traces that amount to the transaction and checks conditions that could prevent its use.
Establishing the Sale and Total Payment
Purchase orders, sales agreements, invoices, and payment records should identify the goods, parties, and agreed price. Payments made separately or indirectly for the seller’s benefit may affect the calculation. A low invoice price alone does not establish undervaluation, but unexplained differences between invoices and accounting records require review.
In a multi-tier supply chain, using the manufacturer’s price requires support for a bona fide sale for export to the United States. Contracts, orders, and shipping records should establish the transaction relied on.
When Another Valuation Method Applies
If transaction value cannot be determined or used, CBP follows the statutory sequence: identical merchandise, similar merchandise, deductive value, computed value, and finally the fallback method. An importer may request computed value before deductive value at entry-summary filing. The available evidence must support the method used.
2. Related-Party Prices and Valuation Adjustments
A customs valuation review separates related-party price acceptability from required additions and allowable exclusions. Each issue needs supporting records.
Showing That the Relationship Did Not Influence Price
A related-party sale may support transaction value if the circumstances show that the relationship did not influence the price. Alternatively, the transaction value must closely approximate qualifying test values for identical or similar merchandise exported at or about the same time. A tax transfer-pricing study can provide relevant evidence, but it does not automatically satisfy CBP’s standards.
A review connects pricing policies, comparable sales, costs, and profits to the applicable customs test. An unexplained profit margin or a study covering different products may leave the relevant price unsupported.
Distinguishing Additions from Exclusions
Buyer-incurred packing and selling commissions, qualifying assists, dutiable royalties, and subsequent proceeds accruing to the seller must be added when not already included and supported by sufficient information. International freight and insurance generally fall outside the price actually paid or payable. Certain post-importation charges qualify for exclusion only when separately identified.
| Item | Valuation Question | Relevant Records |
|---|---|---|
| Buyer-supplied tooling | Is it an assist, and how should its value be allocated? | Tooling invoices and production records |
| Royalties | Is payment related to the goods and required as a condition of sale? | License and supply agreements |
| Commissions | Does the intermediary act for the buyer or seller? | Agency agreements and payment records |
| Freight and insurance | Are the claimed amounts qualifying shipment expenses? | Freight invoices and shipping documents |
Buyer-supplied tooling
- Valuation QuestionIs it an assist, and how should its value be allocated?
- Relevant RecordsTooling invoices and production records
Royalties
- Valuation QuestionIs payment related to the goods and required as a condition of sale?
- Relevant RecordsLicense and supply agreements
Commissions
- Valuation QuestionDoes the intermediary act for the buyer or seller?
- Relevant RecordsAgency agreements and payment records
Freight and insurance
- Valuation QuestionAre the claimed amounts qualifying shipment expenses?
- Relevant RecordsFreight invoices and shipping documents
Assist allocation is not a general deduction. Contract labels do not control royalty treatment. Broader customs law issues, including classification and origin, require separate analysis.
3. Choosing a Response before and after Liquidation
Liquidation finalizes CBP’s duty calculation. Attorneys confirm entry status and deadlines before evaluating a correction or challenge.
Before Filing or While an Entry Remains Open
Before importation, attorneys can review pricing terms, additions, and whether a prospective ruling request is appropriate. For eligible unliquidated entries, a post-summary correction may provide a route to amend declared information, subject to program requirements and timing.
Form 28 requests information; Form 29 communicates proposed or completed action. Check the notice’s wording, dates, and response instructions before answering. A request for information does not itself establish a violation, but the response should reconcile contracts, payments, and declared amounts.
After Liquidation or Protest Denial
For a protestable valuation decision reflected in liquidation, the protest generally must be filed within 180 days after liquidation. Informal correspondence should not substitute for a timely protest.
If CBP denies the protest, a Court of International Trade action generally has a separate 180-day deadline measured from mailing of the denial notice. For an importer’s protest-denial action, all liquidated duties, charges, or exactions must generally be paid before filing. A deemed denial can have a different deadline trigger.
Customs litigation analysis also weighs disputed duties, evidence, recurring entries, and litigation expense.
4. Practical Pitfalls in Customs Valuation Records
Preserve original records and identify inconsistencies before submitting explanations or changing reporting practices. The same problem may affect multiple entries.
Correcting Prices without Reviewing Past Entries
Changing future invoices does not resolve earlier reporting errors. Year-end adjustments require analysis of the original pricing arrangement and the affected entries. An ordinary post-importation rebate does not automatically reduce transaction value.
Where an omission may create penalty exposure, attorneys evaluate correction obligations and whether prior disclosure is available. An entry amendment alone should not be assumed to resolve customs compliance and enforcement concerns.
Losing the Connection between Documents and Goods
Preserve original contracts, amendments, ledgers, shipment records, and broker communications. Connect payments and allocated costs to specific merchandise and entries. Never present reconstructed documents as contemporaneous originals.
5. Frequently Asked Questions
An entry review can also raise questions about the broker’s role and what CBP’s earlier decisions establish.
No. Hiring a broker does not eliminate the importer’s reasonable-care obligations. The importer should provide accurate transaction information and review how the broker reports it.
An importer may request a written valuation explanation within 90 days after liquidation under the applicable regulation. That informational request does not replace a protest or extend its deadline.
No. CBP’s acceptance of an entry does not establish blanket approval of the pricing method. A prospective ruling can provide guidance, but its application depends on its scope and whether the actual transaction matches the stated facts.
6. Discuss Your Customs Valuation Issue
A customs valuation consultation can assess price support, affected entries, and options for correcting or challenging an assessment.
Records to Bring for Review
Provide the CBP correspondence, entry and liquidation dates, sales and license agreements, payment records, and any pricing studies. Identify pending shipments using the same arrangement. An attorney can use these materials to evaluate deadlines, the valuation method, and the next filing or response.
27 Jan, 2026
