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Understanding Product Descriptions in APAC

Posted by Noel Chow

7/25/17 7:03 AM

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A Rose by Any Other Name, or The Lack Thereof

For Shakespeare, a rose by any other name would smell as sweet; perhaps for lovers too. This, though, isn’t a love most customs authorities share, and for good reason.  Unfortunately, most businesses find themselves so heavily tied up with the “big ticket items” on the trade compliance pyramid that prioritising quality trade descriptions often becomes an afterthought.

Not to be downplayed, countries like the Philippines have strict customs rules regulating goods description where importers potentially face criminal sanctions and customs brokers risk suspension of their licenses for the offense of insufficient goods description on customs entry documents.

While the ramifications are not as punitive in most other Asian countries as they are in the Philippines, having goods stuck at the border for insufficient description is still a common and unnecessary impediment to your flow of business. A “toolkit” can be classifiable anywhere between Chapter 70 and Chapter 96 of the HS (by the way, that’s 1/3 of the nomenclature), so any customs officer worth his salt is right not to allow your goods to clear until he/she is satisfied with the explanation.  If you factor in the additional complexity of then having to translate a poor English description into Chinese or another regional language (as required on the import declaration) the problem is compounded.

A description like “General Purpose Cleaning Agent” will be equally as unacceptable in many places. In a country like Australia, for instance, where biosecurity standards are much higher than many Asian exporters are used to seeing, they tend to be surprised at the number of questions from the importer’s side with which they have to deal. Fortunately, a competent Australian customs broker would in most cases have spotted this red flag and questioned whether the cleaning agent was of the sort where the importer’s NICNAS registration sufficed for import, or additional compliance measures were necessary before customs does. Which with no doubt relieves the importer of an embarrassing encounter with the ABF.

Having said that, if you’re an importer, the habit of relying on someone else to spot your errors and correct them is a disaster waiting to happen. If you’re an exporter, there are more productive things you could be doing for your business than answering follow-up questions. Needless to say, repeated incidents can harm your reputation with customs as a reliable operator, importers, and exporters alike.

Business operators know their products best. Remember, the more clearly it is described, the less they (customs or your customs broker) need to ask. Quality trade description minimises unnecessary border delays. Even if the vast majority of cases don’t actually result in punitive action, proper descriptions are one less irritant to your operations and a boost to your reputation as a reliable operator.

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Written by Noel Chow

Noel joined Tradewin from a major US multinational where he was a key member of the APAC global trade compliance team in Singapore. He brings with him a combined 10 years of industry and consulting experience in trade, customs and transfer pricing having previously worked with a diverse clientele across industry groups as a consultant with the Big 4. He holds a law degree from the University of London and a Masters in International Law from the University of Malaya researching WTO law. His academic works in the area of WTO law have been published in peer reviewed law journals.