TRADE ALERT
Importer Fined for Nondisclosure of
Provisional Invoice Prices
(October 25, 2007)
The United States Court of
International Trade (CIT) recently ruled that an importer had committed fraud,
in violation of 19 U.S.C 1592, by not disclosing the accurate value of imported
goods. The defendant provided invoices
to US Customs and Border Protection (CBP) representing only part of the actual
sale price for the goods. The invoices
reflected the initial amount to be paid for the sale, but not the balance due
that was payable up to 60 days after entry into the
The court found that the importer was aware that the prices on their Customs entries were undervalued but did not reconcile the value discrepancies. This negligence resulted in the violations being deemed as fraudulent. The importer was assessed over $600,000 in unpaid duties and interest and $7,500,000 in civil penalties.
The CIT states, “While there is nothing sinister, per se, about provisional pricing agreements, it is not the provisional pricing agreement here that is at issue, but the underlying undervaluation scheme in which the provisional pricing agreements only play a part.”
When provisional pricing is used, companies should ensure that a disclosure of the accurate information is given to CBP confirming the accurate value. For assistance with valuation or prior disclosures, please contact a Deringer trade advisor.
The Deringer Logistics