Transfer pricing fraud is how multinationals under-declare dutiable value. The goods cross the border. The duty shortfall doesn't appear in any single declaration — it lives in the relationship between buyer and seller, and in the gap between what was declared and what the market says it should cost.
The WCO Customs Valuation Agreement Article 15 defines related parties — entities linked by ownership, control, or family relationship. Customs administrations have the legal right to test whether a related-party relationship has influenced the declared transaction value. The legal basis is there. The practical capability rarely is.
Manually identifying which declarations involve related parties requires cross-referencing corporate registries, ownership databases, and director records against every import entry. Then benchmarking each one against third-party comparables for the same commodity, route, and period. At national declaration volumes, this is not a feasible manual exercise.
The result: related-party undervaluation passes through undetected, systematically, at scale — not because it's hidden, but because no system joins the dots.
Four sequential stages resolve every intra-group declaration: identify the relationship, test the price, surface the pattern, generate the finding. Each stage feeds the next.
Resolves buyer/seller identity against corporate ownership registries, director databases, and known group structures. Flags declarations where buyer and seller share a relationship under WCO CVA Art. 15.
Benchmarks the declared unit price against a corridor of arm's-length transactions for the same HS code, origin, and trading partner. The corridor is derived from third-party trade data — no intra-group transactions included.
Single transactions can be explained. Structured patterns — the same group, the same HS codes, consistently below the corridor — cannot. The model surfaces the pattern, not just the outlier.
A documented finding citing the comparator set, the legal basis (CVA Art. 15), and a recommended uplift range. Structured for officer review, post-clearance audit, or tribunal proceedings.
Every finding maps to a downstream workflow action. Related-party cases require different treatment depending on the strength of evidence and the size of the deviation.
Customs valuation uplift request issued. Officer has the comparator set, the deviation calculation, and the ownership evidence. Case is audit-ready.
Declarant is asked to provide transaction value documentation under CVA Art. 1.2. Finding is held pending declarant response.
Related-party flag fired but arm's-length deviation is within corridor. Declarant is asked to provide transfer pricing policy documentation for the commodity group.
Declared price is within the arm's-length corridor. Result is cached — future declarations from the same group for the same HS code auto-clear without re-testing.
Every finding cites the legal basis (CVA Art. 15), the comparator records used to construct the arm's-length corridor, and the deviation calculation. The ownership evidence is shown with its source registry and retrieval date.
No black box. When a finding is challenged by a declarant, the officer already has a structured evidentiary record — no separate evidence-gathering step required before a post-clearance audit or tribunal hearing.
The model resolves buyer and seller identity across corporate ownership registries, director databases, and trade network patterns. Groups that restructure to avoid detection in one jurisdiction tend to leave traces in another.
Coverage spans company registries in over 140 jurisdictions, major director and beneficial ownership databases, and trade-derived network signals — counterparty patterns that emerge from declaration history itself.
Arm's-length corridors update continuously as new third-party trade data flows in. A corridor derived from Q1 data reflects Q1 prices — if market prices shift in Q2, the corridor shifts too. Declared prices are always benchmarked against a current comparator set, not a static one.
This matters in commodity categories with meaningful price volatility — semiconductors, chemicals, agricultural inputs — where a stale corridor would either over-flag or miss genuine deviations.
The Transfer Pricing model runs on-premises. No declaration data, no corporate identity data, and no ownership records leave the administration's infrastructure. The entity graph is built and resolved entirely within the deployment boundary.
For administrations with strict data residency requirements, an air-gapped mode is available — all processing, all registry lookups, and all comparator benchmarking run against locally held data sets with no external calls.
We run a no-risk trial against a sample of your historical import declarations — returning documented findings with comparator citations and ownership evidence. You keep the findings. No long engagement, no procurement overhead.