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The goods for export are priced at CIF, but the customs declaration form lists the price as FOB.
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We signed a CIF contract with our client for a batch of export goods, but the transaction method was mistakenly listed as FOB on the customs declaration form. The goods have already been shipped, but we only noticed this now. Will the customs authorities investigate this? The client hasn't received the full payment yet. Could this cause any problems??
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
Your situation is a typical case of declaration inconsistency，which customs refers to as "untruthful price declaration". The CIF price includes freight and insurance premiums，while the FOB price does not. By declaring FOB，you are understating the value of the goods. This directly poses three risks。
1. During customs inspections，if the declared value is found to be inconsistent，the customs may determine tax evasion and impose a fine of 30% to 2 times the unpaid taxes according to the *Regulations on the Implementation of Administrative Punishments by Customs*。
2. It will affect tax refunds. The VAT corresponding to the freight and insurance premiums may not be refunded。
3. If the goods are subject to license management，an incorrect value declaration may constitute smuggling violations。
Now that the goods have been shipped，you must immediately do two things。
1. Apply to the customs for a correction of the declaration，submitting a situation explanation，the original contract，invoice，and bill of lading to explain that this was an operational error。
2. If the declaration has exceeded 30 days，you must follow the "voluntary disclosure" procedure to seek lenient treatment。
Remember: Do not rush to clear the tax refund before completing the correction，otherwise it will cause further complications later on.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
From a logistics operational perspective, who exactly paid the freight and insurance fees for this shipment? Under CIF terms, it should have been you who paid, but the customs declaration form lists FOB, indicating that the customs records show the client paid. This will lead to two problems: First, the freight invoice you paid won’t match the customs declaration, making it impossible to record this expense in export costs for financial purposes. Second, if the client needs your freight invoice for customs clearance and the terms don’t match, they may question the authenticity of the documents. To rectify this, follow these three steps:
1. Contact the freight forwarder immediately to stop sending original bills of lading to the client until the amendment process is completed.
2. Calculate the actual freight and insurance fees paid for this shipment and prepare payment receipts.
3. When applying for a customs amendment, fill in the specific amounts in the "Freight" and "Insurance" columns.
The time window is critical. If the customs data has already been uploaded to the tax system, the amendment process may take 2-3 weeks, during which you shouldn’t apply for tax refunds. Additionally, inform the freight forwarder that all future invoices must match the customs declaration to avoid further errors.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Here's the translation of the text into English, with detailed explanations:
When communicating with clients, you need to adhere to one principle: be proactive and transparent, but avoid exposing internal operational errors. It is recommended to send an email directly, saying: "Based on the latest logistics arrangements, we need to confirm the trade terms in writing to ensure that the customs clearance documents fully align with the contract." Then attach a clause confirmation letter, clearly stating the CIF terms and the party responsible for freight and insurance costs. Ask the client to sign and return the document. This approach has three advantages: first, it frames the issue as "process optimization," maintaining professional credibility; second, it obtains the client's written confirmation, which can prove the absence of intentional tax evasion if customs later investigate; third, it doesn't affect payment collection, as the CIF contract remains valid. Avoid telling clients "we reported the customs declaration incorrectly," which could cast doubt on your operational competence. If the client has already noticed discrepancies in the terms, explain: "The FOB declaration is for customs statistical purposes. The actual trade terms are governed by the CIF contract, and we have already arranged for the documents to be synchronized." Additionally, check the letter of credit or payment terms to ensure that the document requirements match the CIF terms, to avoid bank rejections.