What is Commercial Invoice?
A commercial invoice is the seller's bill to the buyer for goods sold in an international transaction, and it is the primary document customs authorities use to establish the value, description, quantity and origin of imported goods. Its content is set partly by commercial practice and partly by law: in the US, 19 CFR 141.86 lists required data such as the parties, a detailed description of the merchandise, quantities, purchase price and currency, itemised charges and country of origin. In the EU, the customs value is based primarily on the transaction value, the price actually paid or payable, for which the invoice is the starting evidence. Under UCP 600 Article 18, an invoice presented under a letter of credit must appear to be issued by the beneficiary, be made out to the applicant and be in the credit's currency. Related documents include the pro forma invoice, issued before shipment, and the packing list.
Why it matters for forwarders
Most customs queries and many delays trace back to the commercial invoice: vague descriptions, missing Incoterms rule, absent HS codes or prices that do not match payments. The Incoterms rule matters because freight and insurance are treated differently in each customs territory: EU customs value includes transport and insurance to the EU border, while the US generally excludes international freight and insurance from dutiable value. Undervaluation or 'split' invoicing exposes the importer to penalties and the broker to compliance scrutiny. Forwarders should check that the invoice matches the transport document, the packing list and any certificate of origin in quantities and descriptions, especially where a letter of credit requires strict compliance. Where assists, royalties or commissions are paid outside the invoice price, the importer may need to declare them separately.