Certified Supply Chain Professional (CSCP) Practice Exam

What should the declared value of the cargo reflect?

1. The estimated market value of the item

2. The actual price paid by the importer

3. The shipping cost plus insurance

4. Any discounts provided during the sale

The correct answer is: The actual price paid by the importer

The declared value of cargo is an important figure that serves multiple purposes in international trade and shipping. It should reflect the actual price paid by the importer because this value is critical for customs declaration and determination of duties and taxes. By declaring the exact amount that was financially exchanged for the goods, the importer ensures that the correct amount of tariffs and taxes can be assessed by customs authorities. Using the actual price paid maintains transparency in the transaction and often aligns with the conditions of the sale contract. This approach avoids potential disputes with customs officials about how much duty is owed on the shipment. While the estimated market value and shipping costs might play roles in other contexts (like insurance claims or internal accounting), the declared value specifically ties back to the transaction and the financial obligation of the importer, making it the most relevant figure for customs purposes.