Why customs always catches on
Customs authorities don’t just take your word for it. They use sophisticated systems, historical data, and industry benchmarks to verify the declared value of goods. Red flags include inconsistent documentation, suspiciously low values for high-end items, or discrepancies compared to standard industry pricing.
When something seems off, customs can:
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Request additional documents like purchase orders, bank statements, or supplier invoices.
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Conduct random inspections to physically verify shipments.
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Cross-reference industry databases to detect undervaluation patterns.
The bottom line? If you think customs won’t notice, think again.
Consequences of lying to customs
Whether it's financial, reputational, or otherwise, lying to customs can pose serious risks.
The financial fallout - fines, penalties, and seized shipments
Declaring false values isn’t just unethical—it’s illegal. Customs fraud carries heavy penalties that can far exceed any short-term savings:
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Hefty fines based on the discrepancy between the declared and actual value.
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Additional duties and taxes, often with interest and late penalties.
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Seizure of goods, which means your shipment might never reach its destination.
In severe cases, violators face criminal charges, the loss of import/export privileges, and even permanent bans from certain markets.
Delays that damage your business
Even if your shipment isn’t seized, delays caused by customs investigations can be costly. Shipments may be held for weeks or months while the true value is verified. This ripple effect can:
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Disrupt supply chains and increase operational costs.
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Damage relationships with suppliers and customers.
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Flag your business for heightened scrutiny on future shipments.
Your reputation is on the line
Beyond fines and delays, your brand reputation is at risk. Customers facing unexpected customs fees, delayed orders, or missing shipments won’t hesitate to leave negative reviews, demand refunds, or take their business elsewhere. E-commerce marketplaces and payment processors may even suspend or ban accounts associated with customs violations, cutting off your ability to sell and fulfill new orders entirely.
The importance of declaring the correct country of origin
Another critical compliance factor is declaring the correct country of origin on your commercial invoice. The country of origin refers to where the product was manufactured or substantially transformed, not the country from which it was shipped. Misrepresenting this information can lead to similar risks as undervaluing goods, including fines, shipment delays, and legal penalties, especially when preferential trade agreements or specific import restrictions are involved.
With the new U.S. tariffs, accurately declaring the country of origin is more vital than ever, particularly for shipments entering the U.S. Some businesses may attempt to cheat the system by falsely stating the country of origin to avoid higher duties. However, customs authorities are vigilant, and discrepancies can result in severe penalties, increased inspections, and potential bans on future imports.
How to save on duties the right way
Instead of cutting corners, consider these compliant strategies to manage costs effectively:
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Use accurate HS codes: Proper classification ensures the correct duty rate applies, avoiding costly reclassifications by customs.
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Review de minimis thresholds by country: Many countries allow low-value imports to enter duty-free. Understanding these thresholds—and adjusting your pricing or shipment values accordingly—can reduce duties without violating customs rules.
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Take advantage of free trade agreements: These can reduce or eliminate duties for eligible goods.
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Be transparent with customers: Offering duties-paid options at checkout builds trust and prevents surprise fees.
Stay compliant with Zonos
At Zonos, we help businesses navigate the complexities of cross-border compliance without the risks. From accurate HS code classifications to landed cost (duty, tax, and fee) calculations, we make sure both you and your customers know exactly what to expect—no surprises, no penalties, no lost shipments.
Ready to simplify your international shipping? Get started with Zonos today.
The hidden costs of falsifying commercial invoice values
With new U.S. tariffs now active, compliance with customs protocols isn’t just a good practice—it’s essential. Some businesses, hoping to reduce import duties and taxes, might consider undervaluing their goods on commercial invoices. At first glance, this might seem like a cost-saving shortcut, but in reality, it’s a high-stakes gamble with severe consequences.