We have a client — a Shenzhen maker of outdoor lighting fixtures — whose shipment came through Long Beach last summer. His U.S. importer (the client who signs his checks, the one we all politely call "the boss") forwarded him a letter from U.S. Customs in a panic: a CBP Form 28, demanding a written explanation within 28 days. Why was this shipment's declared value thirty percent below the "comparable merchandise" in Customs' pricing database?
The boss's first instinct was to fold — accept a higher declared value, pay the extra duties, make it go away. I told him: slow down. Read the letter first.
Here's how it ended: we spent two weeks assembling the price evidence package for that shipment — the purchase contract, the factory's commercial invoice, bank payment records, the ocean freight invoice (proving the quote was FOB, freight and insurance excluded), and the factory's cost breakdown sheet. Everything went to Customs within the 28-day window. Six weeks later, Customs accepted the explanation. The goods released normally. Not a dollar of extra duty paid. The boss later bought us dinner and said it was the best money he never spent.
Now here's the counterintuitive part, and I want you to read it twice: a CBP Form 28 is not a penalty. It's Customs giving you one chance to explain yourself — and ignoring it is how the real penalty begins. Most people shake when this letter arrives. They think they're being fined. They're not. Form 28 is literally titled "Request for Information." The letter that costs you money is the one that comes after: Form 29, the Notice of Action, where Customs issues its own valuation decision and sends you a bill for back duties plus interest. Form 28 is your last chance to talk with evidence.
Why Customs Is Questioning Your Declared Price (and Why a Form 28 Follows)
We have another client, a Yiwu small-appliance exporter, who got a CBP Form 28 at the end of 2024. His situation was different: the factory and the U.S. buyer were related parties — the owner had set up his own company in the States as the importer. Classic transfer pricing structure. The declared price was set low, and Customs smelled it immediately.
He shrugged it off. Had his forwarder reply "the price is correct" in one sentence and called it done. Customs responded with a Form 29, proposing an uplifted dutiable value plus back duties and interest. He had no choice but to accept — paid a painful bill, got flagged in the system, and every shipment since has been pulled for exam. He now tells everyone: answering that letter would have been so much cheaper.
Customs questions declared value for three reasons, and China-origin cargo hits all three at high frequency:
First, the declared price sits well below Customs' pricing database. They hold mountains of import price data on comparable goods. You declare $5, the database says everyone else declares $8 — the system flags you automatically.
Second, related-party transactions. Factory and U.S. importer are "family," and the price is set in-house. Customs trusts nothing about it. Transfer-priced shipments get questioned at a far higher rate than arm's-length trade.
Third, the pricing logic doesn't hold together. Declare the high-value item low and the accessories high in the same shipment — a trick meant to game duty rates — and the pattern jumps right off the page.
And here's an insider detail most exporters miss: the Form 28 goes to your U.S. importer of record, not to you in China. But the bill always rolls downhill to you — the boss will deduct the extra duties from your next payment. So "the letter wasn't addressed to me" is not a strategy.
The CBP Form 28 Evidence Checklist: Build Your Case in 28 Days
Customs doesn't want your explanation. It wants your evidence. The entire 28-day clock is about assembling one complete price evidence package. This table is copy-ready — start working it the day the letter arrives:
| What you must prove | Documents to prepare | What we tell our clients |
|---|---|---|
| The transaction is real | Purchase contract + commercial invoice + bank payment records | Invoice amounts must match actual payments; if the balance isn't fully paid yet, say so in your cover letter |
| The price is ex-factory | Factory cost breakdown + your price quotation | The quotation must state FOB vs. CIF explicitly, freight and insurance in or out — this is the single most common misunderstanding |
| Freight and insurance are separate | Forwarder's invoice + ocean bill of lading | FOB freight was never in the declared value; prove it separately instead of letting Customs "estimate" it for you |
| The parties aren't cooking the books | Related-party declaration + transfer pricing documentation | If factory and buyer are related, keep this file ready year-round; scrambling to create it after the letter arrives never works |
Timing note: the letter normally gives you a 28-day response window (always check the date printed on your notice — policy details are subject to the latest guidance on the CBP website). My rule: start within 48 hours of receipt. Assembling evidence takes about two weeks. Never leave it for the final week.
Do the Math: Fight It or Fold
A lot of importers want to "pay and make it go away." Let's price both roads honestly:
| Answer it properly | Accept the uplift | |
|---|---|---|
| One-time cost | Broker/attorney service fees (get a quote) + about two weeks of staff time | Back duties + interest, paid out immediately |
| What follows | If accepted, no record, normal release | Flagged in the system; exam rates on future shipments jump |
| The valuation baseline | Your original declared value stands | The uplifted value becomes the "new normal" for every future shipment |
| Worst case | Evidence falls short and you're back in the right column | There is no worse — conceding is where the worst begins |
See the trap? The expensive part of conceding isn't that one bill. It's the new baseline — you'll pay duties on the uplifted value for every shipment afterward. A year's worth of that difference would hire ten attorneys. That's why I say: Form 28 is your one free swing. Don't waste it.
Three Contract Questions Before a Form 28 Shows Up
On the surface this is a customs problem. At the root it's a contract problem. From the 3PL side of the table, here are four things you can lock in during negotiation — before any letter ever arrives:
First, name the U.S. importer of record in the contract. Under DDP terms, that's you — the Form 28 lands on your desk. Under FOB or DAP, it's the buyer. Different terms, different recipient. Write it down clearly and don't leave it fuzzy.
Second, make your quotation transparent. Break out ex-factory price, inland freight, port charges, and the FOB price line by line. The most common injustice I see: the exporter quotes FOB, and the buyer compares it against CIF values in the Customs database. Of course yours looks low. It was never an apples-to-apples comparison.
Third, keep transfer pricing documentation ready if you're related parties. When the factory and the U.S. company are "family," having this file on hand within 48 hours tells a completely different story than cobbling it together two weeks later.
Fourth, put a notification clause in your forwarder contract: any Customs inquiry letter must reach you within 48 hours. Too many forwarders sit on these letters trying to "handle it themselves" — by the time you find out, three days are left on the clock and no one can save you.
So here's how I close this one. Next time you're negotiating a contract, ask these three questions: one — who exactly is the U.S. importer of record on this shipment? Two — does the declared price include freight and insurance or not? Three — if a Form 28 shows up, who pays the attorney and who assembles the evidence?
Ask those three, and the boss will think you know U.S. Customs better than he does. That's where a 3PL earns its keep — in the details nobody else thinks to ask about.
By Susan, 3PL Sales Director
