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Related Parties


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Understanding Related Party Transactions

What is a Related Party Transaction?

A Related Party Transaction refers to a business deal between two entities that share a close relationship, which could potentially influence the transaction's terms and pricing.

How does U.S. Customs Define Related Party Transactions?

According to U.S. Customs, the assessment of a Related Party Transaction revolves around examining both the seller and the customer involved in the transaction.

Why is Assessing Related Party Transactions Important?

Assessing these transactions is crucial because there may be a link between the declared value on the Customs entry and the actual price paid, affecting both parties.

What Relationships Are Considered in Related Party Transactions?

  • Family Ties: Are there family connections between the seller and the Importer of Record, such as spouses, descendants, ancestors, or siblings?
  • Shared Officers and Directors: Do the buyer and seller have common officers and directors, meaning individuals holding positions in both entities?
  • Partnership Relationships: Are there partnerships between the buyer and seller?
  • Personnel Overlap: Do employees of the buyer and seller overlap?
  • Ownership and Control: Does either party control or own 5% or more of the outstanding voting stock or shares of the other party's organization?
  • Other Forms of Control: Are there any direct or indirect control relationships between individuals associated with the buyer and seller?

How to Identify Related Party Transactions?

To determine if a transaction qualifies as a Related Party Transaction, you should check if any of the aforementioned conditions apply. If they do, the transaction should be labeled as such on the Customs entry.


Understanding Related Party Transactions is essential when dealing with U.S. Customs regulations as it helps ensure transparency and fair valuation in trade transactions.

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