FOB, CIF and U.S. customs value: what should you enter?

FOB and CIF are Incoterms for sea and inland-waterway carriage. They assign delivery, risk and certain cost responsibilities. Read the named port and the contract version: “FOB” without a place and scope does not explain the entire invoice.

Under the transaction-value rules, the price actually paid or payable can require additions such as buyer-paid packing, selling commissions, assists, certain royalties and proceeds of later resale that accrue to the seller, when the legal conditions are met. Separately identified transportation or insurance after the relevant export point may be excluded under applicable rules. Foreign inland freight can depend on the facts, so do not use a universal “subtract all freight” shortcut.

• Collect the purchase order, contract, final invoice and proof of any separate freight and insurance charges.
• Ask about buyer-supplied tools, molds, materials or other assists and any royalty or commission arrangement.
• Have the broker document why each inclusion or exclusion applies to this sale.

Suppose two offers have different sale terms. Do not compare their invoice figures as if they included identical transport. First map each contract to the same arrival point; then obtain a shipment-specific valuation review. Use that reviewed value as the duty-estimate input and keep the supplier price and logistics bills in a separate landed-cost worksheet.