Related party transaction value: when CBP accepts the price between affiliates, and what replaces it
In brief
CBP does not reject a price only because buyer and seller are related. Under 19 U.S.C. §1401a(b)(2)(B) and 19 C.F.R. §152.103(l), the price stands if the relationship did not influence it or it closely approximates a test value. What the Importer of Record documents.
When the buyer and seller of imported goods are related, CBP does not reject the price for that reason alone. Under 19 U.S.C. §1401a(b)(2)(B) and 19 C.F.R. §152.103(l), the transaction value between related parties is accepted if the relationship did not influence the price, or if the price closely approximates one of the test values the regulation names. If neither can be shown, transaction value is not the basis of appraisement and the next method in the hierarchy applies.
The Importer of Record (IOR) is the party that declares value on the entry, so the facts behind a related party price are the IOR’s own records. This applies to a United States subsidiary buying from its foreign parent, and to companies importing high-duty goods such as pharmaceuticals, steel and aluminum, oil and gas equipment, chemicals, copper, and machinery, where the customs value is the base on which duty is calculated. It applies the same way to a Brazilian or other Latin American exporter selling to an affiliate in the United States, because the rule turns on the relationship and not on the country.
The statute: what counts as related
19 U.S.C. §1401a(g)(1) lists the persons treated as related for valuation:
- Members of the same family, including brothers and sisters, spouses, ancestors, and lineal descendants.
- An officer or director of an organization and that organization.
- An officer or director of one organization and an officer or director of another, where each also serves as an officer or director of the other.
- Partners.
- Employer and employee.
- A person who directly or indirectly owns, controls, or holds voting power over 5 percent or more of the outstanding voting stock or shares of an organization, and that organization.
- Two or more persons who directly or indirectly control, are controlled by, or are under common control with any person.
The 5 percent threshold in the sixth item is a low bar. A minority holder, a shared director, or a common parent can each make the buyer and seller related for customs.
The statute: where the relationship enters transaction value
Transaction value is the first method in 19 U.S.C. §1401a(a)(1)(A): the price actually paid or payable for goods sold for exportation to the United States, plus the additions in §1401a(b)(1). It is the appraised value only if the four conditions in 19 U.S.C. §1401a(b)(2)(A) are met. The fourth is that the buyer and seller are not related, or, if they are related, that the transaction value is acceptable under subparagraph (B).
Subparagraph (B) gives two routes to acceptance. Either the relationship did not influence the price actually paid or payable, or the transaction value closely approximates a comparison value, such as the transaction value of identical or similar merchandise sold to unrelated buyers in the United States at or about the same time. Subparagraph (C) requires differences in commercial level, quantity, the additions in §1401a(b)(1), and the seller’s costs in unrelated sales to be taken into account in that comparison, each on sufficient information.
The regulation: 19 C.F.R. §152.103(l)
19 C.F.R. §152.103(j)(1)(iv) repeats the condition, and 19 C.F.R. §152.103(l) explains how it is applied. Under paragraph (l)(1), CBP does not disregard a transaction value solely because the buyer and seller are related. Where CBP has doubts, the importer may be given an opportunity to supply further detailed information. Three interpretative notes describe circumstances showing that the relationship did not influence the price:
- CBP has examined how the parties organize their commercial relations and how the price was set, and is satisfied.
- The parties deal with each other as if they were not related, or the price follows normal industry practice or the seller’s pricing to unrelated buyers.
- The price recovers all costs plus a profit equal to the firm’s overall profit over a representative period, for merchandise of the same class or kind.
Paragraph (l)(2) covers the test value route. The comparison values are the transaction value of identical or similar merchandise sold to unrelated buyers in the United States, and the deductive value or computed value of identical or similar merchandise. Whether a price closely approximates a test value depends on the nature of the merchandise and the industry, the import season, whether the difference is commercially significant, and whether the difference comes from internal transport costs in the exporting country. No fixed percentage applies, and the same standard is used whether the transaction value is higher or lower than the test value.
What replaces transaction value
If the related party price cannot be accepted, the hierarchy in 19 U.S.C. §1401a(a)(1) moves to the next method: transaction value of identical merchandise, then similar merchandise, then deductive value, computed value, and the fallback method. 19 C.F.R. §152.104 requires the comparison goods to be exported at or about the same time as the goods being appraised, at the same commercial level and in roughly the same quantity, or adjusted on sufficient information. An importer may ask for computed value before deductive value under 19 C.F.R. §152.101(c), and that request is made when the entry summary is filed.
The steps after transaction value are walked in the customs valuation page, and the last of them is covered in the post on the fallback method under 19 U.S.C. §1401a(f). Duty on steel, aluminum, and copper articles under Proclamation 11021 of April 2, 2026 (91 FR 18201) applies to the full customs value from April 6, 2026, so the method that fixes the value sets the base for the Section 232 duty. The sector pages for steel and aluminum, pharmaceuticals, and oil and gas equipment list the duties by Chapter 99 heading.
In effect and in rulemaking, as of November 3, 2026
The related party rules above are statute and regulation, and they are in effect. Nothing in the documents below changes them.
The 2026 enforcement directives sit on a different track. Executive Order 14411, Strengthening Customs Enforcement (91 FR 35125, June 10, 2026), directs asset and bonding minimums, formal entry rules for foreign entities, good standing and vetting, disclosure and certification requirements, and a 50 percent penalty floor. Those provisions are in rulemaking with no effective date. CBP’s advance notice of proposed rulemaking on supply chain disclosures (September 2, 2026) takes comments through December 1, 2026. The Low-Value Shipments proposed rule (91 FR 64532, October 8, 2026) takes comments through December 7, 2026 and is not in effect.
One step is in effect: enforcement of the CBP notice Accuracy of Importer of Record Data Submitted to CBP (August 19, 2026) began September 18, 2026. The tracker records the dated position of each directive.
Facts that decide
- Whether the buyer and seller fall within any category of 19 U.S.C. §1401a(g)(1), including the 5 percent voting stock test and common control.
- Whether the relationship influenced the price, shown by how the parties set it and whether it matches the seller’s pricing to unrelated buyers or normal industry practice.
- Whether the price recovers all costs plus a profit equal to the firm’s overall profit over a representative period.
- Which test value was used, if any, and the records behind the comparison, including adjustments for commercial level and quantity.
- Whether the comparison merchandise was exported at or about the same time as the goods being appraised.
- Whether any request under 19 C.F.R. §152.101(c) for computed value before deductive value was made when the entry summary was filed.
Each of those items is answered from the IOR’s own records. Tell us what you import and how your entries are filed today, and we’ll show you where you stand: see if you qualify or write to ship@iorusa.com.
Sources
This post summarizes publicly available federal actions for general information. It is not legal advice. Requirements are subject to rulemaking and change. Verify current requirements against the Federal Register and CBP guidance.
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Tell us what you import and how your entries are filed today, and we’ll show you where you stand. We reply to your work email within one business day. The full form has room for more detail.
