Customs Valuation: A Threshold Foreign Traders Must Cross

As a 20-year veteran in foreign trade, I deeply understand that customs valuation is one of the most 'risky' aspects of import-export operations. Many companies have faced this dilemma: despite declaring actual transaction prices, they receive a 'Price Inquiry Notice' from customs. Today, let's discuss this 'valuation process' that foreign traders both love and fear.

Why Does Customs Question My Transaction Price?

According to Article 55 of the Customs Law and Article 18 of the Tariff Regulations, customs has the authority to review the declared prices of import and export goods. Customs may initiate valuation procedures under the following circumstances:

• Price is significantly low: Lower than the average import price of similar products during the same period
• Special relationship influence: The buyer and seller have special relationships such as shareholding or kinship
• Abnormal transaction conditions: Such as restrictions on resale, tied sales, and other non-standard commercial arrangements
• Special payment methodsThere are non-one-time payments such as subsequent profit sharing involved.

What to Do When Receiving an Inquiry Notice? A 5-Working-Day Race Against Time

After customs issues the Price Inquiry Notice, companies only have 5 working days to prepare supporting documents. Based on my experience, this stage requires:

• Quick ResponseImmediately form a response team with finance, business and other relevant departments
• Complete documentationPrepare full set of transaction documents including contracts, invoices, and payment vouchers
• Professional explanationPrepare detailed transaction description explaining price composition

Price Negotiation: The Art of 'Bargaining' with Customs

If supporting documents cannot fully address customs concerns, the case will enter price negotiation phase. This stage truly tests a companys professional capabilities:

• Adequate preparationResearch market prices of similar products in advance and prepare comparable cases
• Professional presentationUse terminology and logic familiar to customs to demonstrate price reasonableness
• Flexible responseWhile adhering to facts, appropriately consider customs adjustment suggestions

Valuation Not Approved? Here Are Some Remedy Options

If disagreeing with customs final valuation result, companies can:

• Request customs to issue a Valuation Notice to understand specific valuation basis
• File administrative reconsideration with higher-level customs
• Protect rights through judicial channels

Prevention is Better Than Cure: A Guide to Valuation Risk Prevention

Based on years of experience, Ive summarized these preventive measures:

• Pre-clearance price reviewConsult customs about price risks before major transactions
• Document managementMaintain complete records of all transaction documents and communication
• Professional supportSeek assistance from professional customs brokers or lawyers for complex transactions

Customs valuation may seem complicated, but mastering the rules and preparing adequately ensures smooth clearance. Remember: honest declaration is fundamental, professional response is key. May this guide help our foreign trade colleagues avoid detours in valuation processes!