NBR turns to global databases to end customs valuation disputes

S&P Global Platts recommended as first choice as importers allege inflated assessments and lack of transparency

The National Board of Revenue (NBR) is preparing to subscribe to internationally recognised commodity-pricing databases in a bid to reduce persistent disputes between importers and customs officials over the valuation of imported goods.

The move is aimed at giving customs officials access to independent international price references when assessing whether the values declared by importers accurately reflect prevailing market prices.

Among the platforms under consideration are S&P Global Platts, the London Metal Exchange (LME), Shanghai Metals Market (SMM) and Independent Commodity Intelligence Services (ICIS).

At a recent meeting at Chattogram Customs House, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, the authorities decided to subscribe to at least one international database by September.

A committee formed by the NBR's customs wing to examine the advantages and disadvantages of such subscriptions has recommended S&P Global Platts as the first platform.

A long-running source of friction

The initiative comes amid longstanding complaints from importers that customs officials frequently question declared invoice values and impose higher assessed values when calculating duties and taxes.

Importers argue that such practices can increase their costs, create uncertainty and delay the clearance of consignments.

The NBR, meanwhile, needs reliable market information to determine whether declared transaction values are consistent with international prices, particularly for commodities whose prices fluctuate significantly across markets.

At present, the NBR does not subscribe to international commercial databases that can routinely be used to cross-check declared import values.

‘Move towards data-driven valuation’

Trade economist Dr Zaidi Sattar, chairman of the Policy Research Institute (PRI), said the problem should ultimately be addressed through greater automation rather than discretionary valuation.

He called for the integration of artificial intelligence into ASYCUDA World, the customs automation system developed under the United Nations Conference on Trade and Development (UNCTAD).

“Arbitrary valuation should be stopped immediately,” Sattar said, adding that access to global commodity databases would help reduce disputes between customs officials and importers.

He said international databases could be linked to ASYCUDA World so that declared prices could be automatically compared with relevant market information.

According to Sattar, Bangladesh is using only around a quarter of the system's capacity.

He also pointed to the country's complex tariff structure, saying greater automation was needed to reduce opportunities for discretionary intervention at the import stage.

One database may not tell the whole story

Business representatives, however, caution that simply subscribing to one or two international databases will not resolve the valuation problem.

Md Fazlul Huq, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said the NBR should ensure access to databases covering Bangladesh's major import markets.

Prices can vary significantly depending on the country of origin, quality, specifications, supplier, volume and market conditions, he said.

He cited a recent import of 100 per cent polyester fabric for a new production unit. The importer purchased the fabric at $2.35 per unit, while customs assessed it at $4.00.

The same product could legitimately cost around $4 in another market, he said.

“This is why country-specific sources and databases should also be incorporated,” Fazlul Huq said, arguing that a broader database architecture would provide a more realistic basis for valuation.

Importers cite ‘inflated’ assessments

The issue has been particularly contentious at Chattogram Customs House, the country's principal seaport customs station.

Amirul Huq, president of the Chittagong Chamber of Commerce and Industry (CCCI), told the meeting that customs officials sometimes assess imported goods at prices considerably higher than the actual purchase or invoice values.

He cited plastic chips as an example.

According to him, the actual purchase and invoice price was around $8,000–$9,000 per tonne, while customs assessed the goods at $12,000 per tonne for determining duties and taxes.

Such differences, he said, leave importers facing higher costs despite having supporting commercial documents.

Customs acknowledges data gap

Md Mahbubur Rahman, commissioner of Chattogram Customs, said importers who provide purchase information from recognised global platforms alongside their invoices are considered to have supplied credible information.

But for some products, customs still needs to verify declared values against international market prices.

The problem is that the customs authority currently does not have subscriptions to the relevant databases, he said.

That gap is one of the reasons behind the NBR's latest initiative.

Declared values to remain in force for now

Until the proposed database-based valuation system becomes fully operational, customs will continue to accept valuation data submitted by importers, officials said.

The transition is significant because it could gradually move customs valuation away from ad hoc comparisons and towards a system based on independent market data, automated checks and traceable valuation decisions.

But experts and businesses say the quality of the system will ultimately depend on how the databases are used.

International benchmark prices cannot always be applied mechanically. Differences in product quality, origin, grade, specifications, contractual terms, shipping costs and market conditions can produce legitimate variations in transaction prices.

The challenge for the NBR, therefore, will be to build a valuation system that uses global price information as evidence rather than as an automatic replacement for the actual transaction value.

If successfully integrated with ASYCUDA World, the databases could give customs officials and importers a common reference point—and make customs valuation more transparent, predictable and less prone to dispute.