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Customs Classifications
Customs Classifications

All goods that enter the United States must be categorized according to the Harmonized Tariff Schedule (HTS). The act of placing goods into the correct category is called classification. Classification determines the applicable Customs duty rate payable.  The Harmonized Tariff Schedule of the United States (HTS) was enacted by Congress and made effective on January 1, 1989, replacing the former Tariff Schedules of the United States.

The HTS comprises a hierarchical structure for describing all goods in trade for duty, quota, and statistical purposes. This structure is based upon the international Harmonized Commodity Description and Coding System (HS), administered by the World Customs Organization in Brussels; the 4- and 6-digit HS product categories are subdivided into 8-digit unique U.S. rate lines and 10-digit non-legal statistical reporting categories. Classification of goods in this system must be done in accordance with the General and Additional U.S. Rules of Interpretation, starting at the 4-digit heading level to find the most specific provision and then moving to the subordinate categories.

The "general" rates of duty subcolumn contains U.S. normal trade relations duty rates; products of some NTR countries may be eligible for preferential tariff programs, as reflected in the "special" subcolumn. Column 2 (the so-called "statutory rates") applies to countries listed in general note 3(b); the general notes set forth the rules for applying the HTS. Embargoes, anti-dumping duties, countervailing duties, and other very specific matters administered by the Executive Branch are not contained in the HTS.
The USITC maintains and publishes the HTS (in print and on-line) pursuant to the Omnibus Trade and Competitiveness Act of 1988; see the preface to the HTS for additional explanatory material. However, the Bureau of Customs and Border Protection of the Department of Homeland Security is responsible for interpreting and enforcing the HTS.

Customs Valuations

In order to arrive at the appropriate Customs assessable value and Customs duty payable for imported goods, it is necessary to know the official Customs appraisal for those goods.   The United States implemented the GATT Valuation Code for most imported goods on July 1, 1980.   Most of the trading partners of the United States also use this method.  As a general rule, Customs valuation presumes that the price paid by an unrelated buyer reflects market value.  However, in related-party transactions, market value must be proven.  The Customs valuation statute lists the following bases of appraisal:

•    Transaction value
•    Transaction value of identical merchandise
•    Transaction value of similar merchandise
•    Deductive value
•    Computed value
•    Best method available

Generally, the accepted Customs value of all merchandise exported to the United States will be the transaction value for the goods. If the transaction value cannot be used, then the secondary bases of value will be adopted in order of precedence.

What additional costs can be included in the price in order to arrive at the transaction value of imported merchandise?

These costs can be included in the price:
•    Packing costs incurred by the buyer
•    Selling commissions incurred by the buyer
•    The value of any assist.  An assist is a certain non-monetary benefit given to an overseas manufacturer by the U.S. importer, which is not included in the manufacturer’s commercial invoice price.
•    Royalty or license fees that the buyer is required to pay as a condition of the sale
•    The proceeds, accruing to the seller, of any subsequent resale, disposal, or use of the imported merchandise

What costs may be excludable from transaction value?

These costs are excludable from transaction value:
•    The costs of transportation, insurance, and other services related to the international shipment of the goods from the country of exportation to the place of importation in the United States
•    Reasonable costs incurred for providing technical services after importation into the United States
•    Reasonable costs incurred for transporting the goods after importation
•    The Customs duties and other federal taxes (including any federal excise tax), for which sellers in the United States are ordinarily liable

Customs Rulings

We can obtain for our clients advanced rulings from U.S. customs so that they know for sure how much Customs duty liabilities they are subject to way before importation is executed.  Advanced ruling is almost a necessary step in your importation process as unknown liabilities can become a key factor in turning an otherwise profitable trade transaction into one that is a financial loss.  Under U.S. Customs law, importers and exporters can request advanced rulings.  International exporters can obtain rulings that can increase their bargaining power during negotiations with buyers .  Below please find an introduction of US Customs e-ruling program. 

Under the newly enhanced eRulings program, the importing community may submit an electronic request for a binding ruling by accessing the new eRulings Template. ( eRulings Template ) The template permits the online filing of an electronic binding ruling request directly to the National Commodity Specialist Division (NCSD) of the Office of Regulations and Rulings. The eRulings Template is reserved exclusively for the electronic submission of initial binding ruling requests to the NCSD in New York. Any questions or follow-up inquiries concerning electronic binding ruling requests must be made via telephone to Customs and Border Protection, Customs Information Exchange at (646) 733-3056/3063. Upon transmission of an electronic, eRuling, request the requester will receive an email, acknowledging their use of the template. If the transmission is received by the NCSD in good order, the requester will receive an email acknowledgement of receipt, complete with a binding ruling control number, within one business day. The official binding ruling response, complete with an electronic signature, will also be returned by email. Ruling requests that require a sample will be excluded from the program. Generally, the NCSD will issue all such rulings within 30 calendar days of the date of receipt. Some delay may occur if a laboratory report or consultation with another agency is required. Rulings that require referral to Headquarters, OR&R, will be issued by mail within 90 days of receipt. The ruling request must concern prospective shipments. A copy of the ruling or the ruling control number should be provided with the entry documents filed at the time the merchandise is imported. Please note that if for any reason you cannot meet the requirements for filing an electronic ruling request, you can still file for a binding ruling by mail. See What are Ruling Letters. ( What are Ruling Letters )
Attachments must be in one of the following formats: Microsoft Word (.DOC), JPEG format for pictures (.JPG), Plain text (.TXT), Adobe Acrobat (.PDF), Power Point (.ppt), and GIF image format (.gif) No zip or compressed files will be permitted. Failure to adhere to these requirements may result in rejection of the request.
Information Required in Ruling Requests Ruling requests must contain a complete statement of all relevant facts relating to the transaction including:
•    The name, address, email address and phone number of the requesting party.
•    The names, addresses, email addresses and other identifying information of all interested parties (if known) and the manufacturer ID code (if known).
•    The name(s) of the port(s) in which the merchandise will be entered (if known).
•    A description of the transaction; for example, a prospective importation (merchandise) from (country).
•    A statement that there are, to the importer's knowledge, no issues on the commodity pending before CBP or any court.
•    A statement as to whether advice has been sought from a CBP office; and if so, from whom, and what advice was rendered, if any.
To increase the likelihood that we can respond without having to return your request for additional information, please provide as much of the below information as possible, depending on the type of ruling which you require. Please also note that a single ruling request may include no more than five (5) items of the same class or kind in order to be accepted.
Classification rulings determine which Harmonized Tariff Schedule (HTS) provisions apply to your goods. The HTS number determines the applicable duty rate and eligibility for various trade programs. Classification depends on various factors, which vary according to the type of product involved. The following information will be helpful:
•    A full and complete description of the good in its imported condition.
•    Component materials.
•    The good's principal use in the United States.
•    The commercial, common, or technical designation.
•    Illustrative literature, sketches, digital photographs, flow charts etc.
•    Chemical analysis, flow charts, CAS number, etc.
•    Any special invoicing requirements in ( Section 141.89 of the Customs Regulations ) (click link to see special descriptive requirements for certain goods).
•    Any other information that may assist in determining the classification of the article. We suggest you refer to the HTS ( Harmonized Tariff Schedule of the United States ) , and attempt to determine the likely applicable classification, so that you can discern from the wording of that provision what factors we will need in order to provide a ruling.
Country of Origin rulings determine the country of origin of your goods, which in turn determines the applicability of special duty rates and other trade programs. The origin of your goods depends on where the various production steps took place. The following detailed information will be helpful:
•    Countries where each of the source materials were made or harvested.
•    Countries where each the various production steps took place.
Trade Program or Agreement rulings determine whether free trade agreements such as NAFTA (North America Free Trade Agreement), or special trade programs such as AGOA (Africa Growth and Opportunity Act), apply to your goods. In addition to the detailed production information described for Country of Origin Rulings, these rulings may also require information on costs incurred in each of the production countries.
Country of Origin Marking rulings determine whether your goods are properly marked or labeled as to country of origin. The following information will be helpful:
•    Detailed description of how the article and its container will be marked.
•    Illustrations that show clearly how the goods are labeled and packaged.
•    Illustrations should show all other labeling and packaging details, besides the actual country of origin marking.
•    Detailed description of how the goods will be used or sold upon importation.

Customs Protest

Customs decisions that are adverse to the importer may be the subject of a formal protest. 

There are seven matters subject to protest set out in 19 CFR §174.11;
•    Appraised value of the merchandise
•    Classification and rate and amount of duties chargeable;
•    All charges or exactions of whatever character within the jurisdiction of the Seccretary of the Treasury;
•    Exclusion of merchandise from entry or delivery;
•    Quidation or reliquidation or reconciliation of an entry;
•    Refusl to pay a claim for drawback; and
•    Refusal to liquidate an entry for clerical error , mistake of fact or inadvertence.

The protests may be filed by the following parties, provided that there is a connection between the party and the merchandise:
•    Importer, consignee or their surety;
•    Any person paying or receiving a refund of any charge or extraction;
•    Any person seeking entry or delivery;
•    Any person filing a claim for drawback;
•    With respect to NAFTA country of origin, any exporter or producer if the exporter or producer completed and signed a NAFTA certificate of origin
•    Any authorized agent provided they are authorized to do so

Protests should be filed in quadruplicate on Customs Form 19.  The protest must contain the following information to be valid:
•    Name, address, and importer number of the protestant;
•    Number and date of entry;
•    Date of liquidation
•    A specific description of the merchandise; and
•    The nature of the protestant’s objection to decision

Only one protest may be filed per entry, except that where the entry covers merchandise of different categories, a separate protest may be filed as to each separate category.  Consequently, if two protests are filed concurrently for the same entry by the same protesting party, only the first protest received by U.S. Customs is valid.  A single protest may be filed for more than one entry if all such entries involve the same protesting party, the same category of merchandise and a decision common to all entries that are subject to the protest.
A protest must be filed with the port director whose decision is protested.  It must be filed within 90 days after
(a)    The date of notice of liquidation or reliquidation                                                    
(b)    Where the decision does not involve a liquidation or reliquidation, the date of the decision, or
(c)    The date of mailing of notice of demand for payment against a bond in the case of a surety.
No extension are permissible.  A protest may be amended at any time prior to the expiration of the 90-day period.  A protest must be allowed or denied, in whole or in part, within 2 years from the date the protest was filed.  Accelerated disposition of a protest may be obtained at any time after 90 days from the filing of the protest.  The port director shall review the protest within 30 days from the date of the mailing of the request.  The request must contain the protest number, date of filing, the name, address, and importer number of the protesting party, the importer of record or consignee and address of his agent or attorney.

If a protest is denied, a protesting party may seek further review of a protest by the district director, or by region or CBP Headquarters within the 90-day protest period.
A protest shall be reviewed by CBP Headquarters if the protest and application for further review raise an issue involving the following:
(a)    Lack of uniformity of treatment;
(b)    The existence of an established and uniform practice;
(c)    The interpretation of a court decision or ruling of the Commissioner of Customs;
(d)    Questions which have not been the subject of a Headquarters rulings or court decision

If a protesting party believes that an application for further rview was improperly denied, within 60 days after the date of the notice of denial, it may submit a written request to set aside the denial of the application for further review.
Any person whose protest has been denied, in whole or part, may contest the denial by filing a civil action in the United States Court of International Trade within 180 days after:
(a)    The date of mailing of notice of denial, in whole or in part, of a protest;
(b)    The date a protest, for which accelerated disposition was requested, is deemed to have been denied in accordance with Section 174.22;
(c)    The date that a protest is deemed denied in accordance with exclusion of merchandise or detention of merchandise
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