Customs value adjustment (increase): why customs raises the value and how t...

Customs value adjustment (increase): why customs raises the value and how to challenge it

A customs value adjustment (CVA) is a decision by the customs authority in which it disagrees with the value of the goods declared by the importer and determines it on its own, usually upwards. Since the customs value is the base for charging the duty, VAT and excise, any increase immediately raises the amount of the payments. The grounds for a CVA are Article 55 of the Customs Code of Ukraine (CCU), and such a decision can be challenged: administratively, before the State Customs Service, and in court — before the district administrative court.

A key point importers miss: to keep the right to appeal, the goods must be released "under protest" — against a financial guarantee, rather than re-filing the declaration at the customs value. Below we break down the grounds for a CVA, the six valuation methods, how to release the cargo correctly for a dispute, and how a defence is built in the light of the positions of the Supreme Court.

A customs value adjustment in Ukraine is carried out under Article 55 of the CCU when customs considers the declared value unreliable or unconfirmed. The value is determined by six methods (Articles 57–64 of the CCU) in a strict sequence: from the contract price to the fallback method. To keep the right to appeal, the declarant releases the goods against a financial guarantee while continuing to declare their own value, and receives a decision on the adjustment and a refusal card — it is precisely these that are later annulled in court. The security for the difference in payments is valid for up to 90 days, and additional documents can be submitted within 80 days (parts 2 and 8 of Article 55 of the CCU). The burden of proving the lawfulness of the adjustment lies with customs — this is confirmed by the case law of the Supreme Court. This article describes the grounds for a CVA, the valuation methods, the release and appeal procedure, the refund of overpayments and ways to reduce the risk of the value being increased.

What the customs value is and who determines it

The customs value is declared by the declarant themselves during customs clearance — in the customs declaration, and in certain cases a customs value declaration (CVD) is additionally filed. A CVD is mandatory (part 5 of Article 52 of the CCU) if costs under Article 58 are added to or deducted from the price, or if the seller and the buyer are related; for consignments with a customs value of up to EUR 5,000 a CVD is not filed. The customs authority, in turn, controls the correctness of the value determination (Article 54 of the CCU) and may request additional documents (Article 53 of the CCU).

Why customs raises the customs value

An increase is almost always linked to the inspector's doubt about the reliability or completeness of the price data. The declared value is checked against risk profiles and the customs authority's price benchmarks. Typical grounds:

• Price below the "benchmark" — the declared value is noticeably lower than the level customs sees for similar goods.
• Discrepancies in the documents — the amounts or terms in the invoice, contract, payment and transport documents do not match each other.
• Unaccounted components of the value — delivery to the Ukrainian border, insurance, royalties, packaging are not included (Article 58 of the CCU).
• Relationship between seller and buyer — customs checks whether the parties' relationship influenced the price.
• An incomplete set of supporting documents — no manufacturer's price lists, export declaration, payment orders.

Important: under part 2 of Article 55 of the CCU, the decision on the adjustment must contain a justification for the numerical value of the new price. An unreasoned decision is vulnerable on appeal.

Six methods of determining the customs value

The methods are applied sequentially (Article 57 of the CCU): each next one only if the previous one cannot be applied. Customs is obliged to justify why it rejected the main method. In practice, most disputes arise at the transition from the first (contract) method to the fallback method.

What to do when you receive an adjustment decision

Having received a CVA decision, the importer is not obliged to agree with it immediately and "freeze" the cargo. There are three working scenarios.

• Agree and pay the difference — if the increase is small and disputing it is not economically worthwhile. But note: agreeing effectively removes the subject of the dispute.
• Release against a financial guarantee while keeping the dispute — pay the payments at your own value, secure the difference with a guarantee or your own funds, and challenge the decision. It is this path that preserves the right to go to court (in detail below).

How to arrange the release to keep the right to appeal

The main mistake is to re-file the declaration at the customs value and release the goods as an ordinary import. If the declarant has agreed with the customs value, there is no legal dispute between the parties, and the court will refuse to annul the CVA decision. For the dispute to survive, the cargo is released under protest:

1. Declare your own value and method — do not rewrite the declaration to the customs price. Declaring their price as your own means agreement and the loss of the dispute.
2. Obtain two appealable acts — the decision on the customs value adjustment (Article 55 of the CCU) and the refusal card for clearance (Article 256 of the CCU). These are individual administrative acts that you then annul in court; without them there is nothing to appeal.
3. Release the goods against a financial guarantee — under part 2 of Article 55 of the CCU, in the event of disagreement customs is obliged, at the declarant's request, to release the cargo for free circulation upon payment of the payments at the declarant's value and the provision of security for the difference for up to 90 days. Working capital is not frozen, the supply does not stall.
4. Submit additional documents within 80 days — under part 8 of Article 55 of the CCU the declarant may provide documents in support of the declared value. The appeal is prepared in parallel.
5. Wait for the outcome — if the decision is annulled the security is returned, and the overpayment is refunded under Article 301 of the CCU; if the decision is not challenged in time, the reserved difference is transferred to the budget.

The position is strengthened by a complete and consistent set: the foreign economic contract with the specification, the invoice, payment orders (SWIFT), the manufacturer's price list, the export declaration of the country of departure, transport documents and a cost calculation. What exactly confirms the value is covered in the material on documents confirming the customs value.

How to appeal an adjustment: the administrative and judicial procedures

An appeal against a CVA decision runs along two independent paths. An administrative appeal is not a mandatory stage before court and does not deprive you of the right to go to court.

Case law on the customs value

Ukraine's administrative courts — in Kyiv, Odesa, Lviv, Kharkiv and Dnipro — take a critical stance towards unfounded adjustments. Key conclusions that an importer can use as arguments:

• Customs proves the lawfulness of the decision. Under Article 77 of the CAPU, the obligation to justify the lawfulness of a decision lies with the authority. At the same time, the declarant must be ready to confirm their price with documents.
• Specific discrepancies are required. In case No. 820/307/17 (Supreme Court ruling of 21 April 2021), the court pointed out that customs had not named which specific inconsistencies in the documents were the ground for rejecting the declared value.
• The customs price databases are not evidence in themselves. References to statistical and reference data without an analysis of the declarant's documents are considered by the courts to be insufficient (in particular, the case law in case No. 380/23618/21, ruling of 7 December 2023).
• Formal nit-picking does not work. Minor technical discrepancies that do not affect the numerical value are not a ground for a CVA.

Case law on CVAs consistently develops in favour of importers with a complete set of documents, so a well-grounded claim in most cases has good prospects.

How to reduce the risk of an adjustment in advance

It is cheaper to prevent a CVA than to dispute one. Prevention at the supply-preparation stage:

• Declare the real "white" value and correctly account for costs under the Incoterms delivery terms.
• Prepare a consistent set: the amounts and terms in the contract, invoice, payment and transport documents must match.
• Keep the manufacturer's price list and the export declaration of the country of departure to hand — these are strong arguments for confirming the price.
• Classify the goods correctly and assess the risk for the specific commodity item in advance.

Trans-Hope supports importers at every stage: from preparing documents and assessing the CVA risk to release against a guarantee and appealing the decision. We handle clearance and disputes in Kyiv, Odesa, Lviv, Kharkiv and Dnipro. The company's customs broker will help check that the value and the set of documents are correct before the declaration is filed. Send the invoice and the contract — and we will assess the risk of the value being increased and propose a defence strategy.