GlossaryEN1 min readUpdated: Jun 22, 2026

customs valuation system

The moment a shipment crosses a customs frontier, the customs valuation system determines which value of the goods serves as the basis for calculating import duties.

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Last updated: 22 June 2026Published: 19 June 2025

Source: https://www.wto.org/english/tratop_e/cusval_e/cusval_e.htm

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Logistics Concept

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Definition & Explanation

The moment a shipment crosses a customs frontier, the customs valuation system determines which value of the goods serves as the basis for calculating import duties. The system is hierarchical: the first tier is transaction value – the price actually paid between an independent buyer and seller. If that value cannot be established or is not accepted, a mandatory sequence of fallback methods applies – the value of identical or similar goods, the deductive method based on resale prices in the country of import, the computed value using cost-plus logic, and finally a residual method drawing on available data. The system serves a dual purpose: importers cannot reduce their duty burden through artificial underpricing, and customs authorities cannot impose arbitrary assessments outside the prescribed methodology. Internationally, it is anchored in the WTO Customs Valuation Agreement, rooted in Article VII of the GATT, and applied across virtually all trading nations.