Commercial invoice: ISF Filing Terms & Definitions Explained

The commercial invoice is a critical document in international trade transactions. This document serves as a bill for the goods from the seller to the buyer, and is a primary method for customs to determine duties and taxes. In the context of Importer Security Filing (ISF), understanding the terms and definitions related to a commercial invoice is crucial for smooth and compliant trade operations.

ISF, also known as “10+2”, is a requirement by U.S. Customs and Border Protection (CBP) for importers to provide information about the goods they are bringing into the country before the goods arrive. The commercial invoice plays a significant role in this process, as it contains many of the details required for ISF filing.

Understanding the Commercial Invoice

The commercial invoice is a legal document between the supplier and the customer that describes the sold goods, and the amount due by the customer. It is used by customs authorities to assess the value of goods for the calculation of duties and taxes. It is also used to check the accuracy of the declared value, classification, and origin of the goods. The commercial invoice is one of the main documents used in international trade and is required for most customs clearance processes.

The commercial invoice typically includes the seller and buyer details, description of goods, Harmonized System (HS) codes, country of origin, price, terms of delivery, and payment terms. It is important to note that the commercial invoice is not the same as a proforma invoice, which is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods.

Key Elements of a Commercial Invoice

There are several key elements that a commercial invoice should contain. These include the full names and addresses of the seller and buyer, the invoice number, the date of issue, the type, quantity, and description of goods, the unit and total price, the terms of delivery and payment, and the HS codes. The HS code is a standardized system of names and numbers to classify traded products, and is used by customs authorities around the world for duty and tax calculations.

Another important element is the country of origin, which is the country where the goods were produced or manufactured. This is not necessarily the same as the country from which the goods are shipped. The country of origin can affect the amount of duty payable, as different rates apply to different countries. It can also affect whether the goods are subject to quotas or other restrictions.

Role of the Commercial Invoice in ISF Filing

The commercial invoice plays a significant role in ISF filing. The information on the invoice, such as the description of goods, HS codes, and country of origin, is used to complete the ISF form. The ISF form must be filed with CBP at least 24 hours before the goods are loaded onto the vessel at the foreign port. Failure to file the ISF form, or filing it with incorrect or incomplete information, can result in penalties.

The commercial invoice can also be used to verify the information provided in the ISF form. For example, CBP may compare the description of goods on the invoice with the description on the ISF form to check for discrepancies. If discrepancies are found, this could lead to delays in customs clearance, or even seizure of the goods.


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