Double Invoicing & Customs Under-Valuation
The supplier issues different invoices to you, the bank, and customs — often under-declaring value, leaving you liable for penalties, demurrage and audits.
How the scam works
- 1.Supplier proposes a 'lower declared value' to reduce duties.
- 2.One invoice goes to you, a different one to customs and/or the bank.
- 3.Customs detects the mismatch on arrival in your country.
- 4.You — the importer of record — are held liable for penalties and delays.
Red flags to watch for
- Supplier offers to under-declare the shipment value to 'save tax'.
- Invoice amounts differ across documents for the same shipment.
- Vague or inconsistent HS codes and product descriptions.
- Reluctance to let you control your own customs declaration.
How to protect yourself
- Insist on a single, accurate invoice that matches all documents.
- Control your own customs filing rather than delegating it to the seller.
- Reject any proposal to under-declare value, however small the saving.
- Keep contract, invoice and packing list internally consistent.
In depth
Double invoicing exploits the gap between what was agreed and what is presented for payment — a duplicate invoice, an inflated quantity, or charges for goods or services never delivered. It often rides on top of a genuine order, which is what makes it easy to miss in a busy accounts-payable process.
Tight reconciliation defeats it. Match every invoice against the signed contract, the purchase order, and the verified shipping and inspection documents before releasing payment, and route any discrepancy back through a controlled approval step rather than paying under time pressure. Keeping commitments in the contract rather than in informal chat threads removes the ambiguity these scams rely on.
Related reading
Frequently asked questions
- Why is under-declaring shipment value dangerous for the buyer?
- As the importer of record you are liable for the declared value. If the supplier files a lower invoice with customs, you face penalties, demurrage, audit flags and delays — not the seller. A small duty 'saving' can become a large liability.
- How do I avoid double-invoicing problems?
- Insist on a single, accurate invoice that matches all documents, control your own customs filing rather than delegating it to the seller, and reject any proposal to under-declare value however small the apparent saving.
Real cases
Underweight rebar, hidden spec
The contract specified 12 mm bar at 0.888 kg/m, but delivered material weighed materially less on an independent scale. The supplier pointed to a separate internal spec that was never shared before signing.
Two invoices, one angry customs office
A re-roller discovered the supplier had filed a customs invoice undervaluing the shipment by 40%. The customs authority held the importer liable for the discrepancy.
Worried this is happening to you?
Run your supplier through the structured verification checklist.