The Commercial Invoice

A commercial invoice, in 3 copies, is required for shipments containing any item other than business documents. Since the definition of 'business documents' varies according to destination country, it is often confusing for the shipper to know when it is necessary to complete a commercial invoice. If there is any question about a particular shipment, your local OCS customer service at 1-877-2222-OCS can advise you.

If you include an invoice, but the shipment can be considered documents in the destination country, OCS will still clear your shipment as documents, and it will not be considered as a dutiable shipment.

Purpose

The commercial invoice has 3 functions:

1. It is a bill or record of transaction between seller (shipper) and buyer (recipient), listing a complete description and sale price of the goods, the name and addresses of shipper, recipient, and buyer (if not the recipient), and if possible, purchase order or reference numbers for the transaction. Separate pricing for shipping and insurance should be attached to the base price when applicable, as should the country of origin of the goods. If the payment for the goods is secured by a Letter of Credit, all information, payment terms, and commodity descriptions on the commercial invoice must agree with the Letter of Credit instructions.

   Even if the goods are not part of a sale, as in the case of a loan or transfer of goods to an affiliate company, the commercial invoice serves the following functions.

2. The commercial invoice is the basis for foreign Customs' identification, classification, duty/tax assessment, and final approval of entry of the goods. Accurate descriptions help expedite the clearance process, first by providing OCS with the necessary information to make customs entry, and secondly in helping Customs quickly identify your commodity. To further help this identification, you may also want to include the first 6 digits of the 'Harmonized Tariff' classification (these are the international digits; see section on SED's for more information on the Harmonized Tariffs and compliance with the Department of Commerce).

   It is important that the value of the goods be accurate, even if the shipment is a transfer or loan instead of a sale. Customs will not waive duty/tax simply because an invoice states 'no commercial value' or 'no value declared'. Customs will assess the goods, and if the goods are held to merit value, will either demand a new invoice, or, in some countries, arbitrarily assign value to your goods and base the duty/tax on this assignment.

3. The commercial invoice is the document that confirms the value of goods for insurance purposes. Although you may choose to insure goods for less than than the commercial invoice value, the commercial invoice value can never be stated as a lesser value than the insured amount.