The Anatomy of a Perfect Commercial Invoice: 11.5 Point Checklist
Importing can be tough. There are so many rules and regulations for importers to keep track of that it can be easy to forget all of the information that’s required for a Customs entry. One of the most important documents brokers need for writing entries is the commercial invoice. Without an invoice, we would have no way of knowing what’s coming in on a particular shipment or how much duty should be assessed. I can’t tell you how many times I’ve come across invoices missing some basic information.
Commercial invoice requirements can be found in 19 CFR § 141.86. I know you are thinking…who has time to read and decipher all of that?! In order to make things a little simpler for you, I thought it would be helpful to present a simplified list of these invoice requirements.
These are the items required to be on your commercial invoice (feel free to use it as a checklist):
- The port of entry: What is the destination of the merchandise?
- The time when, the place where, the person by whom, and the person to whom the merchandise is sold: The name and address of the buyer and the seller must be listed as well as the terms of sale/ Incoterms.
- A detailed description of the merchandise: What are these items exactly? What are they made of? What are they used for? Remember, there must be enough information about the goods so that Customs can properly assess duties.
- Quantities & weights: This one is pretty straightforward, but always make sure the units of measure are shown. If the reportable quantity required by Customs is the net weight, this information needs to be listed on either the invoice or the packing list.
- The purchase price of each item: How much did you pay for these items?
- The value of each item (if the items are not purchased): Even if these items were not purchased, what’s the value of the goods? Even free of charge items must be declared to Customs.
- Currency: This is one of the most overlooked requirements since many people assume the currency is in U.S. dollars already, but this needs to be specified on the invoice.
- Additional charges: These additional charges could include your freight, insurance, commissions, etc. Customs does allow you to deduct these from your invoice if they were prepaid and included in your invoice total, but only (and only) if you present an attachment to the invoice (proof) with these charges shown. And since most times importers are unable to get written documentation of these charges, it is wise to consider whether having your shipper arranging your freight and paying for all of this really makes sense (I mean, why would you want to pay duties on your freight and insurance charges?). Read The Nine Reasons that Buying Your Imports on CIF Terms is Too Good to Be True for more information on this.
- Any rebates, drawbacks, or bounties: According to Customs, this information needs to be listed and separately itemized on the invoice.
- The country of origin of the goods: It’s important to note that this information can vary from the port of lading, which is why Customs requires the invoice to specify the exact country in which the goods were physically made. For example, just because the shipment is departing from Hong Kong, it doesn’t necessarily mean that the goods were manufactured in Hong Kong, and just because the seller’s address is shown as Italy, it doesn’t mean the goods are really of Italian origin.
- Any assists not included in the invoice price: This also includes any tools, dies, molds, or engineering plans that were not included in the invoice price.
11.5 In addition to all of the requirements listed above, Customs requires that all commercial invoices must be written in English or have an English translation attached.
Certain classes of merchandise such as textiles, footwear, chemicals, and steel have specific invoice requirements in addition to what is listed above. Be sure you know the documentation requirements for your commodity. Check out 19 CFR § 141.89 for the details.
You know you have a good broker when they call you to ask questions when they encounter a less than perfect commercial invoice. Don’t get annoyed at us…we’re looking out for your best interest.
Now that I’ve gotten you in a compliance sort of mood, check out our Reasonable Care Checklist for Compliance. This publication has a ton of questions you can ask yourself to ensure your compliance program is strong. Also, feel free to leave me a comment below if you have questions so you can be sure your commercial invoices always get an A+.
Again, I know importing can be tough so reach out if you need us.
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-- Libby Redditt
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