[OPE-L:3455] Re: Re: valuation of imports

[jlevy@xxxxxxxxxxxxxx (JERRY LEVY)]

How is the following topical issue dealt with in national
income statistics, etc.?

When firms import commodities into the US, they have to issue a
statement which states the "declared value" of those goods. Yet,
those firms have a motivation to over-state the value of those
goods since if they sell the goods at a market price well below
the [purposely inflated] "value", then they don't have to pay
any customs tax (duty) to the federal government since they
sold those goods at a "loss".  A recent report claimed that
this practice is widespread and commonplace and that the
government hardly ever prosecutes a firm for violating customs
requirements by issuing fraudulent statements on the
supposed value of the imported goods.  To give an indication
of how severely this can inflate the statistics on the value
of imported goods, it is not unusual -- according to a TV
documentary -- to overvalue imports at a rate of several
thousand percent.

In solidarity, Jerry