Essential Guide to Tariff Classification

The book, "Tariff Classification, May 2004", published by the U.S. Customs and Border Protection, offers comprehensive guidance on the tariff classification system under both the Harmonized Commodity Description and Coding System (HS) and the Harmonized Tariff Schedule of the United States (HTSUS). This resource is designed to help the trade community comply with U.S. Customs regulations and procedures. Although it was published 20 years ago, it remains a highly valuable reference for trade practitioners. Below is a summary to help you quickly access key information from this 43-page book.

Key Sections:

1. General Background:
   • Overview of the importation and entry process in the U.S.
   • Importance of accurate classification and valuation of goods to avoid delays, increased duties, or penalties.
2. Harmonized Commodity Description and Coding System (HS):
   • History and Development:
     • Originated in the late 1960s to facilitate international trade by standardizing product classification.
     • Developed under the Customs Cooperation Council, now known as the World Customs Organization (WCO).
   • Structure:
     • The HS consists of 21 sections and 99 chapters, each divided into headings and subheadings with specific codes.
   • Convention Obligations:
     • Contracting parties must adopt the HS and amend their national tariffs accordingly.
3. Interpretation of the HS:
   • Governed by the General Rules of Interpretation (GRIs), which must be applied sequentially to classify goods.
   • The six GRIs cover various scenarios, including incomplete, unfinished, or mixed goods.
4. HTSUS Structure:
   • Incorporates the HS into the U.S. national tariff system, effective since January 1, 1989.
   • The HTSUS includes General Notes, GRIs, Additional U.S. Rules of Interpretation, and product categories.
   • Chapters 98 and 99 are reserved for national use, allowing for special classification provisions.
5. Rates of Duty:
   • Three types of duty rates: ad valorem (percentage-based), specific (per unit), and compound (combination).
   • General rates apply to most goods, with special rates for preferential trade programs and higher rates for non-NTR countries.
6. Extrinsic Interpretative Aids:
   • Explanatory Notes and the Compendium of Classification Opinions published by the WCO provide additional guidance.
7. Amendment and Maintenance Procedures:
   • Managed by the Harmonized System Committee and various subcommittees under the WCO to keep the HS current and resolve disputes.
8. Availability of Resources:
   • The HTSUS is available in paperback, CD-ROM, and online through the U.S. International Trade Commission's website.
   • Classification rulings and pre-importation rulings can be obtained from the CBP for guidance on specific transactions.
9. Legal and Administrative Provisions:
   • Emphasizes the importance of "reasonable care" in classification and valuation by importers, as mandated by the Customs Modernization Act.
   • Details the process for administrative and post-importation reviews, including the availability of FOIA requests and the role of the CBP.
10. Additional Information:
    • Lists resources such as the Customs Bulletin, importing guides, and value publications available to the trade community.

Overall, the document serves as an essential guide for importers to understand and comply with the complex requirements of tariff classification under U.S. law. It underscores the shared responsibility between the trade community and CBP in ensuring accurate and lawful importation practices.