TradeLane

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.  

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.

I’ve always found it interesting that so many healthcare companies that import chemicals and pharmaceuticals have such a difficult time with import compliance. These companies typically have solid regulatory compliance knowledge regarding the FDA, Departments of Agriculture, Consumer Product Safety Commission and many other agencies and have access to chemists and manufacturing product experts. It’s never as easy as it appears.

As a former Director of Operations and a licensed Customs Broker, I understand how difficult it can be to stay on top of changes in the regulations that surround import compliance. The proliferation of trade preference programs offer savings opportunities but require a company to accept significant responsibilities which can be difficult to manage.  All of these programs have a foundation in the accurate classification of imported products.