It’s vital for importers to understand the concept of a Customs Assist to ensure they value their imported products correctly. Failing to account for assists could result in reporting a lower valuation which in turn leads to underpaying customs duties. While often unintentional, undervaluing and underpaying duties creates trouble with U.S. Customs and Border Protection (CBP).
What are Customs Assists?
Defined by the CBP, an assist is an item that the buyer of imported merchandise provides, directly or indirectly, free of charge or at a reduced cost, for use in the production or sale of merchandise for export to the United States.
For example, raw materials are considered assists if the buyer sends them to the manufacturer to be processed or used in the product that will ultimately be imported into the U.S. Sourcing raw materials and transporting them to their facility for production normally would have incurred costs. In this example, the manufacturer avoids such expenses and the production costs are reduced.
When an importer provides an assist, the invoice value of the merchandise coming into the United States doesn’t reflect the value of the assist. From a U.S. Customs point of view, this reduces the invoice value of the import. Reduced valuation subsequently reduces duties and revenue for the United States. Even when an import is duty free, the value of any assist must be declared upon importation.
An assist can take various forms. Under CBP’s concept of informed compliance, it is the importer’s responsibility to make sure all imports are correctly valued.
How are Customs Assists valued?
Assists are key to the proper valuation of shipments in the importing process because they are dutiable by Customs. The basic rule for determining the value of any assist is that it must be based on objective and quantifiable data. The assist value could be determined using things like the fair market value, cost to produce, cost to acquire, etc. When the assist is declared, the importer must be able to show Customs the method used to determine the value of that assist.
How do you declare Assists?
Assists can be declared in one lump sum on one shipment or divided and spread out over multiple shipments. You can do so using the commercial or pro-forma invoice accompanying the shipment during importation. It can be added in as a line item, but it must detail the assist and its value.
Assists can also be described in a separate letter accompanying the shipment.
Don’t risk customs penalties
While assists can be complicated, it’s not worth the risk to make guesses or assumptions. Customs can penalize you if they question your goods’ valuation or if they audit you. It’s important to appraise your shipment accurately and add in the value of all materials or services used in the production of your goods. If you are not sure, an expert at Krypt can help.