What is transaction value?

The price actually paid or payable for goods sold for export, plus the additions the agreement lists — assists, selling commissions, royalties, packing. It is the first of the six WTO methods and covers most trade.

Is customs value FOB or CIF?

It depends on the country. The US leaves out international freight and insurance, so its value is close to FOB; the EU, UK, Saudi Arabia and Dubai include them to the border, so theirs is CIF.

What is an assist in customs valuation?

Something the buyer supplies free or at reduced cost for making the goods — tools, dies, moulds, materials, or design work done outside the importing country. Its value is added to the price paid.

Term

Customs valuation

Customs valuation is how customs works out the value that duty is charged on. Under the WTO Valuation Agreement the first method is transaction value — the price actually paid, plus set additions such as assists and selling commissions. The US leaves out international freight; the EU, UK and Gulf include freight and insurance to the border.

Also called customs value, transaction value, dutiable value, assist, WTO valuation agreementUpdated 13 October 2026

Six methods, in order

Order	Method
1	Transaction value — the price paid or payable, with Article 8 adjustments
2	Transaction value of identical goods
3	Transaction value of similar goods
4	Deductive — worked back from the resale price in the importing country
5	Computed — built up from the cost of production
6	Fall-back

WTO Customs Valuation Agreement

The methods apply in that hierarchical order, though the importer — not the customs officer — may ask to swap 4 and 5. The WTO calls transaction value the first and most important method; the European Commission put its share at about 95% of EU trade, and HMRC says over 90% of UK imports use it.

What is added to the price

Commissions and brokerage, except buying commissions.
Packing and container costs.
Assists — tools, dies, moulds and similar items the buyer supplies for production, and design work done outside the importing country.
Royalties and licence fees the buyer must pay.
Proceeds of resale that go back to the seller.

FOB or CIF

The WTO agreement leaves freight and insurance to each member. US law excludes the costs of transportation, insurance and related services for the international shipment. The EU adds the cost of transport and insurance up to the place where goods enter the EU, and HMRC counts costs up to the UK border. In the Gulf, Saudi Arabia's transaction value includes freight and insurance to the place of import, and Dubai Customs charges duty on CIF value.

Worked example: an assist

Invoice 5,000 units × $20 = $100,000 · moulds supplied free by the buyer: $10,000 → US customs value $110,000 · Merchandise Processing Fee 0.3464% = $381.04

Here the whole mould value is put on this one entry; the law lets an assist be apportioned across the goods it helps make. Design work done in the US would not count — the statute covers it only when undertaken elsewhere.

The mistake people make

Leaving the assist off. Moulds or materials sent to a supplier never appear on the supplier's invoice, so the declared value is too low unless the importer adds them — and the same is true of royalties paid separately to a brand owner as a condition of the sale.

FAQ