Valuation Risk

Customs authorities utilize Risk Management Systems (RMS) to identify shipments where the Transaction Value may not reflect the true price 'actually paid or payable'. When a declaration falls significantly below the National Import Database (NIDB) benchmark, it triggers a valuation query.

Primary Risk Determinants:

• Transfer Pricing: Transactions between related parties (inter-company) are strictly scrutinized to ensure prices are at "Arm's Length".
• Transaction Methodology: While the 'Transaction Value' method is preferred, customs may discard it if they suspect undervaluation deliberately aimed at avoiding duties.

Using this tool helps compliance teams identify "Red Flags" before filing a bill of entry. If your risk profile is high, ensure you have a comprehensive Valuation Defense File containing price lists, manufacturer contracts, and bank remittance proof ready for presentation.