I recently bought a vintage board game from a seller on Etsy. The game was $39 and the cost of shipping they quoted was $29 (from USA to Switzerland). I was OK with this as it is something I cherished from my childhood.
However Switzerland determines whether an imported item is subject to customs duty based on the sum of the value and the shipping cost. And the cutoff is approximately $60. So I knew that this item would be subject to customs duty. With this in mind, I contacted the seller and asked whether she could declare a lower value for the item on the customs form, so that the total falls below the cutoff. She refused, saying that she could get in trouble if she did that. So I let it drop, and sure enough, I got a bill for customs duty of $24. So now my $39 vintage game ended up costing me $92. Yay!
But is what the seller is telling me correct? Would this have been a problem for her to declare a lower value? The game is a used item, so the actual value is rather arbitrary. I have done this with other sellers (not in the US though), and it has never been an issue. Was she telling the truth?
Yes, this is a fraudulent practice to make a declaration that is false to avoid paying customs duties. The Swiss government is unlikely to come after the seller, but that does not change the facts.
Can a foreign customs agency go after the seller or is there international law that covers this situation? And wouldn’t orville be risking getting in trouble?
I agree it is unlikely, but this is no different than lying to a customs officer in person. They can certainly seize the goods and block the seller from export to Switzerland in the future. Not trying to be pedantic, but the act is fraudulent regardless of the dollar amount.
The actual value is not at all arbitrary. In the present case, it’s $39. That’s not a matter of opinion: you paid $39 for it so as far as the customs folks are concerned, its reportable value is $39. Reporting a different value constitutes customs fraud:
The authorities are unlikely to chase down a small-potatoes case like this, but the bottom line is, yes, you were asking the seller to commit (and you yourself would have been a co-conspirator in the commission of) customs fraud.
Yes. A knowing failure to pay customs tariffs or duties violates the False Claims Act. An importer or exporter may be liable under the False Claims Act for making false statements to avoid or decrease payments it owes to the government. Customs fraud violates what is known as the “reverse false claims” provision of the law.
The False Claims Act exposes defendants to “treble damages” – liability for three times the actual amount of the fraud – and penalties for every individual false claim.
A related question: is it standard for a country to base import duty on the value plus shipping cost? This policy in CH seems new to me, but perhaps it has been around a while. But is it common elsewhere, and what is the rationale?
That is the case in Germany too (so, presumably, all over the EU with its harmonised national customs systems), and it it makes sense to me: if import duties were levied on the price without shipping cost, exporters could in concert with importers game the system by billing a lower price plus higher shipping cost.
Forgot about that part. The OP was rationalizing the declaration of a lower cost for the game itself, but you’re right: according to the OP’s explanation of Swiss customs rules, declaring a total goods+shipping cost of less than the actual $60 would have been fraudulent.
Same in Canada. The rationale is that the product cost + shipping is the landed cost. If you were to purchase it in a local store, they would have had to pay the shipping costs also.