Richard Murray & Co., a trusted leader in global logistics and customs brokerage for over 100 years, is alerting importers of finished goods to the increasing dangers of entrusting customs and freight management to overseas freight forwarders. The Issue: Under-Invoicing and Customs Fraud Under-invoicing is a fraudulent practice where the declared value of imported goods is deliberately understated to reduce duties and taxes. While some overseas freight forwarders may offer to “save costs” by managing customs clearance at origin, these practices put U.S. importers at significant risk.
Common Schemes Include:
- Tampering with invoices to show lower values than what was paid.
- Double invoicing – one falsified invoice for customs, one real invoice for payment.
- Failing to declare assists (e.g., tooling, design, engineering support).
- Manipulating related-party transactions to undervalue goods.
The Consequences for Importers
If discovered, under-invoicing exposes importers-not just the overseas forwarder-to severe penalties:
- Financial penalties up to triple the underpaid duties.
- Civil and criminal charges, including potential prison time.
- Seizure of goods, leading to total financial loss.
- Loss of trusted trader status, increasing future customs scrutiny.
- Tax evasion liability, with back duties and interest owed.
How Authorities Detect Fraud
Customs and Border Protection (CBP) and trade enforcement agencies identify fraud through:
- Value-gap analysis comparing export vs. import data.
- Market-based pricing checks against fair market values.
- Whistleblower programs encouraging tips.
- Audits and document requests requiring importers to prove “reasonable care.”
How to Protect Your Business
- Always work with a licensed U.S. customs broker.
- Maintain accurate invoices and supporting documentation.
- Conduct regular compliance audits.
- Be cautious of overseas forwarders offering “duty savings” schemes-you will be held liable.
Richard Murray & Co. is committed to safeguarding your supply chain. For questions about compliance or to review your customs processes, contact us today.
Trust. Compliance. Protection.
