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Loren
Loren, Attorney
Category: Business Law
Satisfied Customers: 29021
Experience:  30 years experience representing clients .
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Hello, I am in the business of exporting goods from USA

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Hello,

I am in the business of exporting goods from USA to Africa. Customers have asked for multiple invoices split into goods and the other for services. For example a $100 split into 2 invoices of 50 each. 50 for goods and 50 for services. My company would collect the full amount of 100, however the client would remit the payment in 2 tranches and only show the 50 invoice for declared value (commercial invoice) of the tangible goods. I am not sure if this is really the correct approach in terms of its legality. Any advise would be very helpful.
Thank you for using JustAnswer. I am JudgeLaw and I will do whatever I can to answer your question and provide you excellent service.

Before we begin, a bit more detail would be helpful please.

What is the customer's purpose for splitting the invoice?

Is the stated value an accurate value of the cost of the goods?

Thank you.

JudgeLaw
Customer: replied 3 years ago.

Hello JudgeLaw, No, the split in the invoice would not be accurate value of the items. Essentially, the item would be discounted and then the discount value billed in a separate invoice. The reason is because the country charges very heavy import duties.

Thank you for the additional information.

I am sorry to hear of your dilemma.   I realize how frustrating this is for you and I hope to provide you information which is accurate and useful, even though it may not be the news you were hoping to get.

I think you already know the answer but are looking for confirmation.

It is a violation of federal law and international treaty to participate in such a scheme to defraud another country from lawful import fees and duties.

You and your customer will need to figure out a lawful way to defer or reduce the import tariffs. There are legal ways, but you will need to identify a more compliant avenue to meet your purpose. I would strongly suggest you consult a US attorney versed in international trade regulation.

If you need help locating a qualified attorney, try Martindale Hubble. Many attorneys themselves use this site to locate attorneys outside their jurisdiction or expertise:
http://www.martindale.com/Find-Lawyers-and-Law-Firms.aspx

It is a huge worldwide database searchable by location and specialty.

I am sorry. I realize this is not the answer you were hoping for. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's position, but accurately reflects their position under the law. I hate it, but it happens and I ask that you not penalize me for having to deliver less than favorable news.

It is my privilege to assist you. Let me know if you need further information.  I hope I have helped you beyond your expectations in the service I have provided to you.  I am here for you.

Please remember to rate my answer when our communication is completed so I will be compensated for my time in providing you with the information you requested.

If you feel the need to provide a low rating, please stop and reply to me via the REPLY button with whatever issue or clarification you may need. I will happily answer your follow-up questions and assist you until I am able to explain the answer to your satisfaction. Please also remember that I cannot control whether the law is favorable to your situation, so please do not penalize me for having to deliver bad news.

Thank you.

JudgeLaw
Customer: replied 3 years ago.

JudgeLaw-


 


Thanks for your reply and advise. Indeed, my first impulse was that this was not the way to go, however, I was hoping that you would have more insight into the "There are legal ways, but you will need to identify a more compliant avenue to meet your purpose." I will have a look at the link you have provided. Thanks.

Thank you for following up.

Their are various methods for reducing tariffs. One popular method is setting up a free trade zone in a country with lower tariffs and then forwarding from that port to the destination.

Another would be setting up manufacturing or assembly in the target country so that the exported goods are reclassified.

The important take away is that you not misrepresent or lie to commit customs fraud. In any event, it is beyond the scope of this site and a violation of state bar regulation to act as your attorney, but the site I referred in the original answer should be able to point you in the direction of a qualified international transaction attorney.

I hope this helps.

JudgeLaw
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