TradeLane

When was the last time your company did an in-depth review of the Harmonized Tariff Classifications assigned to the parts you import into the US? Go ahead and take a minute to think about it, I’ll wait…

I’m going to take a stab in the dark and say that you are guessing the last review was done sometime before the advent of the iPod, but after the Reagan Administration. Don’t worry, you’re not alone. I cannot tell you how many companies I deal with that find themselves in the same position. Unfortunately for them, more often than not they are only brought to ask this question of themselves because CBP has asked it of them in the form of an audit. If you take one thing away from this blog, DO NOT wait until CBP has asked you this question.

The importance of correct HS classification is evident. Wrong classification can lead to overpayment of duties and penalties. In some cases a Binding Tariff Information (BTI) can be used as a tool to assure that your goods are classified correctly.

What is a BTI?
A BTI is a written tariff classification decision, given on request, which is legally binding in all customs administrations within the European Community for up to six years from the date of issue. 

A BTI is intended to give you certainty about the correct tariff classification of your goods. It is not a legal requirement. A BTI provides you certainty that you, or your chosen representative, can declare the correct commodity code for your goods on the customs entry. It also helps you meet your legal obligations in respect of correct tariff classification ensuring that your liability for duties, VAT, and other charges are known in advance.

At Tradewin, we often hear importers say, “I know we will be audited. It’s not a question of if, it’s a question of when. What can we do to be prepared?”

Our answer is always the same “conduct your compliance as if the when is now.”  A focus on the core areas of internal controls will assist you with audit preparedness:

The UN Convention on Registration of Objects Launched into Outer Space defines a "space object" to include component parts of a space object as well as its launch vehicle and parts thereof.  All well and good for keeping track of things floating around in the stratosphere, but what if you made your space object here in the US using imported (read “duty-paid”) components.  That space object lifts off, and there go all those dollars in duty payments.  Can you get any of that back?