Detecting Tariff Evasion: Evidence from Matched Container Data

Clement Anne, Cyril Chalendard, Ana Fernandes, Bob Rijkers and Vincent Vicard

No 10606, Policy Research Working Paper Series from The World Bank

Abstract: This paper matches French export and Madagascan import declarations using container identifiers and account for shipment-specific transport costs to identify declarations and firms at risk of tariff evasion, examine how evasion occurs, and assess customs enforcement. Tariff liabilities calculated from French declarations exceed those based on corresponding Madagascan declarations by 24 percent in aggregate. This tariff revenue gap is highly concentrated: the five importers with the largest positive gaps account for three-quarters of it. Undervaluation accounts for approximately two-thirds of implied tariff revenue losses, with product misclassification accounting for the remainder. Larger-value containers facing high tariffs appear at greater risk of evasion. Many reporting discrepancies are nevertheless inconsistent with tariff minimization: For approximately two-fifths of containers, tariff liabilities calculated from Madagascan declarations exceed those based on French declarations. Customs value adjustments are ineffective, reducing implied tariff revenue losses by only 1.8 percent.

Date: 2023-11-14
New Economics Papers: this item is included in nep-int and nep-iue
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