Interwoven in our bustling import sector lies a silent threat, one that is quietly draining public resources and undermining common honesty. Our recent investigations have revealed a troubling pattern of under-invoicing by certain importers, a pervasive practice that, while rarely grabbing headlines, is costing the country millions in lost revenue and weakening the very systems we rely on to function as a nation.
How it works
Here’s how it works: goods are brought into the country, but their declared value is drastically understated. This means importers pay significantly less in taxes and customs duties. These savings are not passed on to the consumer, but instead pocketed. It might seem like a clever accounting trick to some, but at its core, it’s high-level deception plain and simple. Though immediately this might not appear to be harming anyone. Every dollar lost to this scheme is a dollar that won’t go toward schools, hospitals, road repairs, reduction of national debt, national financial independence or the modernization of public services. In essence, the country suffers while a few profit unfairly.
Fuel for the Problem
Even more troubling is how easily this form of deception can slip through undetected. Investigators have found that personnel often rely solely on the invoice provided by the importer as the basis for valuing shipments without any reliable pricing database to verify the declared amounts against similar shipments or current global market prices. In many instances, there is no centralized reference system at all. This leaves personnel with few options but to process entries based on whatever documentation is handed to them, or their personal knowledge and experience.
Adding to the problem may be a general unfamiliarity among some agency personnel with how modern invoicing in trade logistics works. It’s not impossible for importers to submit an initial invoice reflecting only the first payment, often approximately 30% of the total shipment value. Without ever submitting the follow-up invoice reflecting the final cost. Without a proper mechanism to track or require the full documentation, the true value of goods remains concealed. Inspections and value verification are largely manual, and under the pressure of high volumes and tight deadlines, critical checks can be rushed or skipped. The same item may be declared at different values by different importers and go unquestioned, simply because there’s no baseline for comparison. These gaps don’t just allow deception, they create the perfect conditions for it to evolve.
More Than Just Revenue Loss
But the cost is far greater than lost revenue. Dig deeper, and you’ll find that under-invoicing often plays a central role in laundering illicit funds and financing organized crime. This practice is far from isolated, it is pervasive. In numerous cases globally and in the region, the money used to pay for undervalued imports comes from illegal sources such as drug trafficking, corruption, and other criminal enterprises. Once the goods enter the legitimate market and are sold at regular prices, the dirty money is effectively “cleaned” and reintroduced into the economy under the guise of legitimate trade. This makes under-invoicing not just a customs issue, but a complex financial crime instrument, one that blurs the line between legal commerce and criminal enterprise.
When eventually those same laundered funds are reinvested in drug operations, weapons smuggling, or violent gang activity, the consequences become national security issues. This is how gaps in trade become launchpads for subverting our communities and eroding public safety.
What Needs to Be Done
Fixing this requires more than just better equipment, it demands institutional will. Live pricing databases that are continuously updated and benchmarked against international values would help frontline agency personnel verify declared values more accurately. Systems like the World Customs Organization’s (WCO) Customs Enforcement Network (CEN) and the Global Price Information Exchange (PIE) have proven effective in allowing countries to share and compare commodity pricing data to detect anomalies. Singapore’s TradeNet system and the European Union’s TARIC (Integrated Tariff of the European Union) are also examples of integrated digital systems that support transparent, efficient, and secure customs declarations. When these tools are paired with artificial intelligence and data analytics, it allow agencies to spot patterns of manipulation that would otherwise go unnoticed.
Crucially, regular audits must become standard practice not just triggered when red flags are raised. Proactive enforcement is far more effective than reactive damage control. There must also be real consequences for offenders. Currently, many businesses view under-invoicing as a low-risk, high-reward strategy. That perception must change.
Ongoing Action
The above are illustrative of several of the matters that are currently engaging our attention. The Agency considers the problem to be urgent and prevalent enough that it is necessary to raise awareness and prompt urgent attention. We continue to urge the active cooperation of our strategic partners and wider public. Our commitment is to use all the levers, that the law provides to ensure that wrongdoers face the prescribed sanctions.