Customs Classification – A Key Component of an Import Compliance Manual

We are often asked by importers to assist in classifying their products under the Harmonized Tariff Schedule of the U.S. (“HTS” or “HTSUS”). While seeking assistance from expert counsel is a best practice, under the CBP Modernization Act, an importer of record (“IOR”) is the sole party responsible for determining the correct classification of imported goods (and thereby paying the correct amount of customs duties). An IOR must use reasonable care in classifying its product at the time of entry. Should an importer misclassify their products and not pay the appropriate duties to CBP at the time of importation; the importer is exposing itself to potential CBP penalties under 19 U.S.C. 1592.  The process of classifying goods can be a tedious process and may require time and research to arrive at the correct HTSUS number for any one product.

This blog expands our prior blog, Crash Course in the Harmonized Tariff Schedule of the United States, and provides additional detail on the classification process and tips for importers to use when deciding on a classification its customs broker will declare to CBP.  Importers are encouraged to attend the webinar How to Build and Maintain an Effective Import Compliance Plan on October 6, 2021 (and on-demand) for best practices on how to build and maintain an import compliance plan by addressing common risks associated with the import process – including product classification.

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ACE: Auditing Your Export History

If a company or individual believes they have violated export control regulations and the U.S. government is unaware of this violation, proactively and voluntarily disclosing the potential wrongdoing can substantially reduce penalties. A key component of filing a successful voluntary self-disclosure (“VSD”) is uncovering and providing the correct data. Diaz Trade Law has significant experience analyzing ACE export data to evaluate your export compliance and submit successful VSDs that substantially mitigate penalties.

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REGISTER TODAY! NEI Accredited Webinar Importing 101 – Introduction to U.S. Customs

Webinar Importing 101 Introduction to US CustomsWhether you are new to importing or seasoned, this one-hour webinar is a must attend. Register today to hear directly from this specialized, expert trio on the “Top 10 Tips When Importing to Ensure Compliance” with real case studies:

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301 Exclusion Extensions for COVID-19 Related Products

On March 10, 2021, via Federal Register Notice ( 86 FR 13785), the United States Trade Representative (USTR) announced that 99 medical product exclusions will be extended from March 31, 2021, to September 30, 2021. This action extends a previous USTR action which extended these exclusions from December 31, 2020, to March 31, 2020 (85 FR 85831). […]

USTR Announces China 301 Tariff Exclusion Extensions for COVID-Related Products

On December 29, 2020, the Office of the United States Trade Representative (“USTR”) announced long-awaited extensions to a limited set of previously granted exclusions (for COVID-related products), that were set to expire on December 31, 2020. Meanwhile, importers across non-COVID industries are continuing to await guidance on their tariff exclusion extensions that are set to expire on December 31, 2020.

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LIST 3 Exclusion Updates

On June 24, 2019, the Office of the United States Trade Representative (USTR) provided the public with an exclusion process for items included subjected to Section 301 Tariffs. Specifically, the exclusions related to products included on List 3, which went into effect on September 24, 2018.

Originally, List 3 imposed 10 percent ad valorem duties on 5,757 full and partial subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) and had an annual trade value of $200 Billion. Months later, in May 2019, the 10 percent ad valorem duties were increased to 25 percent. […]

List 4 Exclusion Update

On  June 26, July 17, and August 11, 2020, the Office of the United States Trade Representative (USTR) requested the public to submit comments regarding potential product exclusion extensions for items subject to Section 301 Tariffs. This comment period specifically applied to products that were included on List 4.

When the list was announced on August 20, 2019, it imposed a 10 percent ad valorem on 3,805 full and partial subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an annual trade value of approximately $300 billion. Then, on August 30, 2019, USTR increased the rate of the additional duty announced in the August 20 notice from 10 to 15 percent. Finally, on January 22, 2020, USTR determined to reduce the rate from 15 to 7.5 percent. […]

NEW LIST 2- SECTION 301 EXTENSIONS

On June 25, 2020, the Office of the United States Trade Representative (USTR), requested the public to submit comments regarding potential product exclusion extensions for items subject to Section 301 Tariffs. This comment period specifically applied to products that were included on List 2, which went into effect on August 23, 2018.

List 2 imposed 25 percent additional duties on 279 eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) and had an annual trade value of $16 Billion.

On September 18, 2018, USTR provided the public with an exclusion process; then September 2019, USTR granted a number of exclusions that were set to expire on September 20, 2020. In the June 25th Notice, commenters were asked a variety of questions relating to their supply chains, such as…

whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries; any changes in the global supply chain since August 2018 with respect to the particular product, or any other relevant industry developments; and efforts, if any, importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.

The June 25th announcement was made via federal register notice and stated that requests for exclusion extensions were to be submitted no later than July 30, 2020. Less than three months later, on September 22, 2020USTR announced its determination to extend certain exclusions through the end of the year. Although USTR […]

An Introduction to U.S. Trade Databases

Introduction

There are many factors that U.S. exporters and importers should be conscious of in their operations – including trade and customs laws, foreign market opportunities, changes in commodity prices, and currency fluctuations – just to name a few. However, one vital consideration that exporters and importers alike often overlook is trade flows. A firm’s ability to analyze and keep a pulse on trade data pertaining to that company’s product category can provide that exporter or importer with a clear vision of what’s actually happening. This perspective can empower a firm to optimize its operations and gain an edge against competitors. For example, U.S. importers who regularly track and analyze trade data can gain an understanding of how tariff and non-tariff barriers affect imports. Similarly, U.S. exporters can track and analyze trade data to glean vital intelligence about opportunities in foreign markets. In doing so, U.S. exporters can gain an understanding of which markets their U.S. competitors are selling to and which countries demand is quickly increasing. Analyzing trade data is the first step to developing a sound import or export market strategy. However, doing so once is not enough. Importers and exporters should have a regular practice of tracking trade flow developments and restructuring operations based on what the data reveals. Such a nimble posture can truly empower businesses trading internationally.

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