Hi every one,

Is there any international policy to control the undervalue of the invoice??????

Replying to [mirna]:
Mirna,
As such no there is no international policy. Each country has it's own laws regarding this prcatice........ and as far as I am aware there is no country on earth that allows it.

Basically it is fraud. No other name for it..... If you get caught you can be fined HUGE amounts of money and spend time in prison (depending on what country you are in).

In the US being caught and convicted of this will give you a felony conviction, which not only gets you jail time but means that you can not be a senior person in many types of company, you can lose the right to vote (depending on state) and you get audited pretty much every year by the IRS (and they WILL find something to get you there too usually).
So for the sake of a few $$$$ savings you can screw up the rest of your life.......

Is it really worth it????

Quoting from [mirna]:Hi every one,Is there any international policy to control the undervalue of the invoice??????

   FX is the main for the economy of a country: so each country will watch the FX ( import and export) and flow of foreign currencies:


  There are floor price stipulation int he customs for every product they export The duty to impose in the other country is on the certified customs invoice of the other country:The appraiser in the native country and  the customs appraiser in the importing country will verify and sign the documents:


 There is no chance to make under value and make fraud: The international business system is like that:

Replying to [curdrice]:
FX? Are you using this term in regards to Foreign Exchange? Which is usually referred to as ForEx when outside the walls of a trading floor.

What has a ForEX rate got to do with someone undervaluing an invoice for god's sake?
Forex rates come from Trading Floors in banks....... Are you suggesting the forex traders keep lists of the price of every product in the world? What sort of crazy post is this?

Also what the heck are you talking about with Floor Prices? There are absolutely NOT stipulated Floor Prices for every product in every country..... Stop referring to PRODUCT or COUNTRY specific QUOTAS and PRICES as being an international standard.

All you are doing is posting INCORRECT (to be polite) information. Either check your facts or don;t post like this Curdy, it is irresponsible to pass a post like that off as any kind of fact.

Quoting from [Foow]:

Hi Foow

i understand your blindness.

If you donot accept or you donot know or

if you find it is irrevelent,who are you to dictate this to me! and ask me not to post:

do you know what is customs,Hormonised code system/numbers,floor price,customs-appraiser and etc. you write clearly about this?

the member is asking about the devalued invoiceing: I am explaining it is not possible" and giving the reasons why it is not possible;

if you donot know and understand

or if prove that my answer is wrong, you prove it with supported documents: examples

stop crying

Quoting from [curdrice]:

Hi Foow

i understand your blindness.

If you donot accept or you donot know or

if you find it is irrevelent,who are you to dictate this to me! and ask me not to post:

do you know what is customs,Hormonised code system/numbers,floor price,customs-appraiser and etc. you write clearly about this?

the member is asking about the devalued invoiceing: I am explaining it is not possible" and giving the reasons why it is not possible;

if you donot know and understand

or if prove that my answer is wrong, you prove it with supported documents: examples

stop crying

Curdice.



You did not explain to the gentleman why it is not possible to undervalue an invoice.




For those of you that don't know, a supplier or manufacture can "undervalue" an invoice to try to circumvent the taxes or tariffs on the importing body.

This is NOT legal, yet totally possible.



For example: if the buyer pays 10K for goods and it's invoiced at 7K on the importing/customs documents the buyer would pay taxes / tariffs on the 7K; not the true value of the goods (10K).

This is ILLEGAL and can result in very strict fines!

Never undervalue an invoice. The risk is not worth the small amount of reward. Your business, and your reputation is at stake.



So, to answer the initial question "Is there any international policy to control the undervaluation of the invoice?"



No. There's no international policy to prevent you from changing a number on a document.



However, you can be caught by the customs authority on the importing side, and heavily fined or criminally charged.

To sum everything up:

BUYERS: DO NOT REQUEST THAT YOUR SUPPLIERS UNDERVALUE INVOICES!

SUPPLIERS / MANUFACTURERS: DO NOT UNDERVALUE INVOICES! YOU WILL LOSE THE FUTURE BUSINESS OF YOUR CUSTOMER!

Replying to [Rizzob]:
Thanks Rizz....... I give up on the other comment..... Impossible to explain to thosewho will not hear. *sigh*

Quoting from [Rizzob]:

 Hi Rizzob

I will explain a few for better understanding:

(1)

suppose a T shirt costs USD 2.00 this is the lowest price: one supplier and buyer with understanding they cannot put below this price: In India there are restrictions that goods have some floor prices:The customs appraiser in the port will stop the goods:as you aware every prodcut has the HS number:and now it is available with full details with the customs.

(2)

suppose the same style shirt is made with high quality and with value addition works: in this thre is chance to hide some price:

(3)

the sellers Invoice is recorded in DGFT (Director general for Foregin trade)records in India during export: The customs certified Invoice will go to the buyers customs and the buyer will pay as per the Invocie: On receipt of the money to the seller: he will record the inward remittance and tally the out going invoice value:

So there is Foreign exchange control and fraudleing is difficult;

 

Replying to [curdrice]:
Curdrice,
You are missing what "undervaluing an invoice" actually is. It is done (illegally) for the BUYER to avoid paying customs duty at HIS end.... Not to avoid anything at the point of departure.

if the actual cost is $10,000 but the supplier makes a second invoice that says $7,000 that the buyer shows to HIS customs then he is is avoiding paying duty costs on $3,000 woth of goods....... and THAT is fraud.

Replying to [Foow]:

Hello! Probably because I am Asian, I follow Mr. Cudrice's train of thought. He probably means Customs, being a government arm, monitors all importations because it is tasked to ensure that all importations are declared correctly. All ultimately, to make sure the government gets what is due to it, hence, the foreign currency connection.


In the Philippines, the Bureau of Customs tax importations based on the "Transaction Value" system, where, whatever is declared on the Invoice, is the basis for computation of taxes. HOWEVER, in the Philippines (I don't know if this is true elsewhere), the BOC has a list of MARKET PRICES (based on current international values) of all commodites which serves as a guideline for them. If the Invoice Value falls below the Custom's list price, your importation will be taxed based on Custom's values. You basically get taxed on whichever value is higher (Invoice Value or Customs book value/list price). This is probably what Mr. Curdrice meant by "floor price". As to the method and how often the Customs' values are determined and re-assessed is everyone's guess.


In my personal experience, the Philippines Customs values does not reflect the fluctuations in international market price or is not revised fast enough to reflect same. I have experienced a case where an importation of Brass Alloy Bars were assessed according to LME copper prices of 6-months previously which is approx. 40% higher. LME Copper prices has crashed since, but the Customs values where not revised so my client ended up paying higher taxes based on the book value.

To Mr. Cudrice, no there is no international policy to control undervaluation. But depending on the commodity (if it is heavily misdeclared) and the customs' resolution, sometimes customs at port of discharge will communicate with customs at port of loading to verify whether the declared values are correct. But this is not standard procedure so there really exists loopholes in the system.

I hope I was coherent enough to be understood.

Quoting from [moppet]:


Replying to [Foow]:


Hello! Probably because I am Asian, I follow Mr. Cudrice's train of thought. He probably means Customs, being a government arm, monitors all importations because it is tasked to ensure that all importations are declared correctly. All ultimately, to make sure the government gets what is due to it, hence, the foreign currency connection.



In the Philippines, the Bureau of Customs tax importations based on the "Transaction Value" system, where, whatever is declared on the Invoice, is the basis for computation of taxes. HOWEVER, in the Philippines (I don't know if this is true elsewhere), the BOC has a list of MARKET PRICES (based on current international values) of all commodites which serves as a guideline for them. If the Invoice Value falls below the Custom's list price, your importation will be taxed based on Custom's values. You basically get taxed on whichever value is higher (Invoice Value or Customs book value/list price). This is probably what Mr. Curdrice meant by "floor price". As to the method and how often the Customs' values are determined and re-assessed is everyone's guess.



In my personal experience, the Philippines Customs values does not reflect the fluctuations in international market price or is not revised fast enough to reflect same. I have experienced a case where an importation of Brass Alloy Bars were assessed according to LME copper prices of 6-months previously which is approx. 40% higher. LME Copper prices has crashed since, but the Customs values where not revised so my client ended up paying higher taxes based on the book value.


To Mr. Cudrice, no there is no international policy to control undervaluation. But depending on the commodity (if it is heavily misdeclared) and the customs' resolution, sometimes customs at port of discharge will communicate with customs at port of loading to verify whether the declared values are correct. But this is not standard procedure so there really exists loopholes in the system.


I hope I was coherent enough to be understood.

        The question is there any international policy:

        There is no policy : But one of the routine work of the aprasiers of the customs on

        both sides , verify the product,certify the product and price declared: if they have any          doubt in the price ( lower than the floor price) the shipment will be hold & inspected