Binding rulings allow an importer to get a determination on the correct classification and duty rate for their products in advance of importation. A binding ruling request can be submitted electronically or in a letter to the CBP Information Exchange, National Commodity Specialist with a detailed description of the product along with relevant specifications, descriptive literature and samples. The importer generally receives a response within 30 days. Once Customs issues the ruling, the classification is binding for all US ports.
Binding rulings are not just for tariff classification, they can also be requested on many other import questions such as how to value your goods, country of origin marking questions, country of origin determinations, as well as NAFTA and other free trade agreement determinations.
What are the advantages of getting a Binding Ruling?
Binding rulings give you certainty in computing your landed cost.
Ensures uniformity in all ports. Harmonization among ports is CBP’s goal but without a binding ruling in hand it is certainly not the rule.
Helps avoid delays in getting your goods cleared through Customs and minimizes chances of receiving CF28s (Requests for Information from Customs).
When you obtain binding rulings on questionable classifications, you demonstrate reasonable care and ensure accuracy. It also shows Customs you are in control of your compliance.
But, isn’t there a downside?
What if CBP rules unfavorably? Maybe you’ve been classifying your product with a 2% duty rate and Customs says the correct rate is 5%. Are you better off not requesting a ruling?
Many importers will claim “I’ve been bringing this product in duty free for years, and Customs has never questioned it.” Are they better off just keeping the status quo?
The reality is if you are classifying your products incorrectly, sooner or later CBP will notice. They’ll start with some friendly questions, maybe issue a CF28, and before you know it, you could find yourself facing a full-scale audit, owing large amounts in unpaid back duties and be hit with huge penalties.
You are better off to make the effort up front to ensure you are using the correct classification from the beginning. The risk of non-compliance is too high.
The Good News
When requesting a binding ruling, you are not simply at Customs’ mercy to determine your classification and duty rate – you can help control your own destiny. Tradewin can argue on your behalf. We will do all the background research, consult the regulations, the Harmonized Tariff chapter notes and the WCO Explanatory Notes as well as all the previously published Customs rulings on similar products. We can build a case and customize our arguments to your product and your situation to present to CBP on why your product is rightfully classified in a certain provision.
Tradewin has a proven track record of successfully advocating on behalf of our customers to achieve your desired result. Binding rulings are a smart business decision. Don’t delay and contact Tradewin today.