I. How do I fill in the declared value for air freight?
The key to filling in the declared value for air freight is “truthfulness, compliance, and consistency with the documents.” Specifically, the following principles should be followed:
- Use “actual transaction value” as the core benchmark
The declared value must be consistent with the actual transaction price of the goods, that is, the amount agreed upon by the buyer and seller in an arm’s length transaction (usually excluding freight and insurance, unless the trade contract specifically includes these costs and the destination country’s customs has special regulations).
For commercial goods (such as foreign trade orders or cross-border e-commerce products), the declared value must exactly match the “Total Value” on the commercial invoice, and the amount and currency unit (e.g., US dollars or euros) must correspond exactly.
For goods not actually traded, such as samples, gifts, and personal effects, the declared value must be based on the “reasonable market value.” Do not simply enter “0” or an amount significantly lower than the actual value. For example, for a sample valued at $500, the market selling price should be accurately declared, rather than “$10” as the “sample fee.”
- Maintain logical consistency with the full set of documents
The declared value must not only match the commercial invoice but also logically align with the goods description, quantity, and specifications in documents such as the packing list, trade contract, and bill of lading. For example, if a commercial invoice indicates “100 pieces of clothing, unit price $20, total price $2,000,” the declared value should be “$2,000,” and the quantity of “100 pieces” on the packing list must correspond to this value. This avoids customs inquiries due to “unit price x quantity ≠ declared total price.”
- Adapting to the Destination Country’s Specific Regulations
Different countries have specific restrictions on declared values, so you need to verify and adapt in advance:
Low-Value Exemption Policy: Some countries offer simplified customs clearance or duty-free policies for low-value goods (e.g., the US exempts goods under $800, and the EU exempts goods up to €150). If the actual value of the goods falls within this range, you can declare them truthfully to benefit from the policy. However, please note that splitting multiple shipments to circumvent the limits (e.g., splitting a $1,000 shipment into two $500 shipments) may be considered “declaration fraud.”
Anti-dumping/Countervailing Duty: For goods included in the anti-dumping list (e.g., some Chinese steel products and photovoltaic panels), the destination country’s customs will set a “minimum price.” The declared value must exceed this price; otherwise, the goods will be taxed or detained based on the minimum price.
Foreign exchange control regulations in countries with stricter foreign exchange controls, such as Brazil and India, require that the declared value be consistent with the foreign exchange settlement amount to avoid customs clearance delays due to “declared value ≠ paid value.”
II. Will under-declaration be investigated by customs? Are the consequences serious?
- Under-declaration is likely to be investigated and punished by customs.
Customs uses multiple mechanisms to verify the authenticity of declared values, making under-declaration highly susceptible to detection:
Price database comparison: Customs authorities in major countries (such as the US Customs and Border Protection Agency and the EU Customs Service) maintain a “price database for similar goods of the same period.” This automatically compares the declared value with the average transaction price for goods of the same category and specification. If the declared value is more than 30% below the market average, the system triggers a “price alert” and the item is directly transferred to manual inspection.
Document logic verification: Customs will check the consistency of commercial invoices, contracts, and payment vouchers (such as bank receipts). If it is found that “the declared total price is far lower than the remittance amount” or “the price agreed in the contract is inconsistent with the declared price”, the cargo owner will be required to provide additional supporting materials (such as cost accounting sheets, similar transaction records). If the materials cannot be provided, it will be considered as underdeclaration. Manual inspection and verification: For sensitive categories (such as electronic products, luxury goods, and textiles), customs may open the box to verify the brand and model of the goods, and then check the market price through the official website and e-commerce platform, and compare and verify it with the declared value. 2. The consequences of underdeclaration are extremely serious, involving economic penalties, credit penalties, and even criminal liability. The consequences of underdeclaration are far more than “tax repayment”. They are divided into three levels depending on the severity of the circumstances: (1) Basic consequences: tax repayment + high fines This is the most common penalty. The customs will recalculate the tariff and VAT based on the “actual assessed value”, and the cargo owner must pay the difference in taxes and late payment fees (usually 0.05% per day); at the same time, the fine is generally “2-5 times the underdeclared amount”. For example, if the actual value of a batch of goods is US$10,000 and the declared value is US$5,000, the underdeclared value is US$5,000. If the tariff rate is 20%, the cargo owner must pay an additional US$1,000 in taxes, and the fine may be as high as US$10,000-25,000. The total loss far exceeds the normal declared taxes and fees.
(2) Advanced consequences: cargo detention, return or destruction
If underdeclaration is deemed to be “deliberate concealment”, the customs has the right to detain the goods and require the cargo owner to supplement the authentic documents, pay the taxes and fees and fines within the specified time limit. If the matter is not handled within the time limit, the cargo will be forcibly returned (the return shipping fee is borne by the cargo owner, usually 1.5-2 times the freight).
For under-declarations that fail to provide proof of true value or involve prohibited or restricted goods, the customs may directly destroy the goods, and the disposal fees incurred by the destruction must be paid by the cargo owner. (3) Serious consequences: credit downgrade + criminal liability Corporate credit penalties: If a company repeatedly under-declares, it will be included in the “dishonest enterprise list” by the customs. Subsequent customs clearance of goods will require 100% inspection, and it will not be able to enjoy customs clearance facilitation policies (such as priority customs clearance and consolidated taxation), which will seriously affect logistics timeliness. At the same time, the dishonest record will be synchronized with the tax and foreign trade authorities, affecting the company’s export tax rebate and import and export qualifications. Criminal liability: If the under-declaration amount is huge (such as the under-declaration amount of a single invoice exceeds RMB 500,000) or involves intentional smuggling (such as forging commercial invoices and concealing real transactions), it will violate the “smuggling of ordinary goods and articles” in the Criminal Law. The person in charge of the company may face imprisonment, detention, and a fine of 1-5 times the amount of tax evaded. Furthermore, underreporting can trigger chain reactions for importers in the destination country. If importers use underreported amounts for customs clearance, they may be deemed “tax evaders” by local tax authorities, facing back taxes, fines, and even damage to their business reputation, ultimately leading to a breakdown in the buyer-seller relationship.
In summary, air freight declared values must strictly adhere to the principles of “truthfulness and compliance.” Underreporting is not only highly susceptible to investigation and prosecution, but can also result in far greater financial losses and legal risks than anticipated. Don’t take any chances.
(Note: All fees listed above are for reference only. Please refer to your actual situation for details. Thank you!)
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