GlossaryEN1 min readUpdated: Jun 22, 2026

customs valuation process

Unlike commercial cost-plus pricing, the customs valuation process follows a strict, legally defined hierarchy of methods.

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Last updated: 22 June 2026Published: 19 June 2025

Source: https://www.wcoomd.org/en/topics/valuation/overview/what-is-customs-valuation.aspx

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Definition & Explanation

Unlike commercial cost-plus pricing, the customs valuation process follows a strict, legally defined hierarchy of methods. Transaction value – the price actually paid or payable for the imported goods, adjusted for certain additions such as freight and insurance to the point of entry – takes precedence and covers the vast majority of commercial shipments. Where transaction value cannot be established or accepted, for instance in related-party transactions where arm's-length pricing cannot be demonstrated, successive fallback methods apply: value of identical goods, value of similar goods, deductive value, and computed value, in that order. The framework derives from the WCO Valuation Agreement and is implemented in the EU through the Union Customs Code. Freight forwarders and customs brokers guide importers through the process, compile the required documentation, and ensure the chosen method is properly justified for any post-clearance audit.