HTSUS (Harmonized Tariff Schedule of the United States) classifications can be straightforward or not, as these two examples illustrate:

9506.62.4040 Footballs

9033.00.2000 Light-emitting diode (LED) backlights modules, the foregoing which are lighting sources that consist of one or more LEDs and one or more connectors and are mounted on a printed circuit or other similar substrate, and other passive components, whether or not combined with optical components or protective diodes, and used as backlights illumination for liquid crystal displays (LCDs)

A detailed classification includes HTS lookup, checking both chapter notes and GRI (General Rules of Interpretation), reviewing specs and/or other literature, and searching CROSS (Customs Rulings Online Search System). This is the procedural aspect of classification, but there is more. Most commodities require interpretation of the tariff language based on experience. In many cases subject matter experts need to be consulted. Finally, the process needs to be documented for future reference and parts lists updated.

I sometimes recommend a binding ruling to ensure accuracy in entries. Binding rulings provide uniformity across all ports of entry, and protect the importer from variations in interpretation from current and future CBP personnel. Rulings can be requested on valuation and country of origin as well as classification. The downside to obtaining a ruling is that you must follow it or be subject to penalties, although rulings can be appealed.

Rulings can be requested using the link shown here:

https://erulings.cbp.gov/s/

For help with binding rulings contact mitch@52.91.45.227.

A quick look at the BIS (Bureau of Industry and Security) Website shows that export enforcement activities have ramped up significantly. This means more fines and penalties for violations of the EAR.

Export compliance includes attention to detail, consistent procedures, up to date knowledge, and oversight. Due diligence is required for EEI filings, Schedule B and ECCN classification, Licensing entries, and Country of Origin determination. In spite of best efforts, mistakes will be made. In these cases a Voluntary Self-Disclosure is a smart move. Here is some info from the BIS website:

BIS encourages the submission of Voluntary Self Disclosures (VSDs) by parties who believe they may have violated the Export Administration Regulations (EAR). VSDs are an excellent indicator of a party’s intent to comply with U.S. export control requirements and may provide BIS important information on other ongoing violations. BIS carefully reviews VSDs received from disclosing parties to determine if violations of the EAR have occurred and to determine the appropriate corrective action when violations have taken place. Additional information regarding VSDs can be found in Part 764.5 of the EAR, or the enforcement section of our website www.bis.doc.gov.

Contact mitch@52.91.45.227 for assistance in submitting VSDs.

Freight forwarders are essential logistics service providers in international trade. The functions performed by forwarders make it possible for any business to export their products without a large staff. Forwarder selection criteria will vary according to the specific needs of the exporter. Among the most common factors are capacity, connections with airlines and ocean carriers, efficiency of local operations, customer service support, up to date technology, and of course, price. Obtaining rate quotes for large or first time moves is a valid practice. Rate shopping or basing transactions on price alone, however, makes it difficult to access necessary service factors. In recommending forwarders to clients I always emphasize the importance of maintaining a good business relationship with providers.

Forwarders can be a valuable partner in export compliance. It is important to note, however, that primary responsibility for compliance with the EAR falls on the “principal parties in interest” (PPI) in a transaction. Here is a link to BIS Freight Forwarder Guidance:

https://www.bis.doc.gov/index.php/documents/bis-guidance-documents/oee/2528-freight-forwarder-guidance

Contact mitch@52.91.45.227 for export assistance.

I often hear from frustrated exporters about shipments “stuck” in customs. The shipments may include critical parts needed for an equipment or plant shutdown, expensive high tech components not generally carried in inventory, or medical instruments for hospitals. Delayed orders also mean delayed payments, which gets everyone’s attention.

The data used in customs entries comes directly from the commercial invoice for the transaction. All countries have different, and sometimes obscure, customs regulations. It is true, however, that most delays are caused by a few commercial invoice errors or omissions.

Commodity descriptions should answer the questions: What is it? What is it made of? What is it used for? Use plain language which can be understood by anyone. Avoid trade names, brand names, or part numbers in the description. These can be added below the description or to the packing list if needed. If using a harmonized code enter only the first 6 digits which are universal. All countries apply their own last 4 or 6 digits.

Value for customs may appear to be too low for the commodity being shipped. The customs agencies in the destination country need to make sure that duty rates are accurate and will hold up the shipment if in doubt. Make sure that your commercial invoice reflects the correct transaction value.

Importer of record (IOR) contact info is often lacking on the commercial invoice. Customs in the importing country will not contact the exporter if they have questions or issues. If they are unable to contact the IOR the shipment will go into storage. Make sure you include recipient name, address, phone number, and e mail address on your CI.

Contact mitch@52.91.45.227 for immediate assistance.