Sanctions Evasion Reference

Under-invoicing

Stating a price below the true value of goods, so that value is retained abroad or duty and export restrictions are reduced.

reviewed

2026-08-20

Under-invoicing is the mirror of over-invoicing and moves value the other way, leaving the difference offshore with the buyer. In a sanctions context it also has a second use: a shipment declared at low value attracts less customs attention and may fall below thresholds that would trigger additional checks.

Both directions produce the same statistical signature — a divergence between what the exporting country and the importing country report for the same trade flow.

Where this term is used

  • What is cargo origin blending? — Mixing, decanting or re-documenting a commodity in transit so that restricted cargo is no longer traceable to its origin and arrives certified as coming from somewhere else.
  • What is HS code misclassification? — Declaring goods under a Harmonised System commodity code that does not describe them, so that they attract the wrong duty, escape a licence requirement, or disappear from the statistics that would show them.
  • What is trade misinvoicing? — Trade misinvoicing is misstating the price, quantity or description of goods on trade documents, so that value moves across a border in a direction and an amount the paperwork does not admit.

Related terms

  • Over-invoicing — Stating a price above the true value of goods on an invoice, so that the importer transfers more value to the exporter than the trade justifies.
  • Trade misinvoicing — Deliberately misstating the price, quantity or description of goods on trade documents so that the value recorded differs from the value actually exchanged.
  • Mirror statistics — Comparing what one country reports exporting to a partner with what the partner reports importing from it, treating persistent gaps as evidence of misreporting.

Sources

  1. Trade-Based Money Laundering: Risk Indicators. Financial Action Task Force and Egmont Group, 2021.
  2. Trade Misinvoicing. Global Financial Integrity, 2024.

All glossary terms