To BTI, or Not to BTI? That Is the Question

Blog originally posted on 28/04/2016 07:30 AM


Many trade compliance or logistics managers responsible for their company’s importation process have gone through the internal struggle of deciding whether it would be fruitful to apply for a binding ruling from the EU customs authorities.

This struggle might have been less dramatic then Hamlets, but a struggle after all. To add to the dilemma, the rules surrounding obtaining a BTI are also changing as part of the implementation of the Union Customs Code on May 1st, 2016.

For those of us who are new to the world of customs and trade compliance, BTI stands for Binding Tariff Information and is issued by the EU customs authorities. This ruling provides the correct commodity classification to be used in determining the applicable customs duties or to be used in pursuing any other customs-related activities with respect to that particular commodity.

Under the UCC, BTI’s will have a three-year validity term instead of six years as under the current Community Customs Code. Before the end of the three year term, the holder of a BTI can apply for an extended use of the decision. For BTI’s issued before May 1, 2016 the six year term will stay applicable under the new legislation.

BTI’s are will still be open to non-EU applicants. However, the new legislation requires the applicant to have an Economic Operator Registration and Identification (EORI) number. This could be seen as a new obstacle for companies not established in the EU.

Another change concerns the legal status of a BTI. Under the union customs code, a BTI is binding not only on the authorities, but also on the holder. As a result, a holder, of an “old” or “new” BTI, has to refer to that BTI on the customs declaration. Thus, the customs authorities are able to monitor the use of the issued BTI’s.

Finally, the UCC introduces the possibility of a BTI issued to “several persons”. This could mean that several entities of an international company could become holders of one BTI. However, it remains to be seen how customs authorities will interpret this clause, as no further clarification has been provided in the legislation or in national customs notices.

All in all, despite a few changes, in our view a BTI is still a useful tool for a company to be in control of commodity classification and to ensure the correct duty rate is being paid.

So when you feel that (figuratively speaking), “something is rotten in the state of Denmark”, or any other EU Member State, and that you have to “take arms against a sea of trouble” to ensure classification compliance, think of Tradewin. We are always ready to help with your Shakespearian classification dilemmas and getting in control of trade compliance in general.

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Topics: Europe

Blog originally posted on 28/04/2016 07:30 AM

Alexander Mnatsakanov

Written by Alexander Mnatsakanov

Before joining Tradewin in 2015, Alexander worked in Trade Compliance at a large accounting firm, as well as in-house with a large tech company. Alexander has been involved in various projects with regard to customs classification, customs valuation, customs procedures, customs audits, excises, supply chain optimization, and export controls. Alexander holds an LLM in International and European Law from the Leiden University. He is fluent in English, Dutch, and Russian.