" It is about doing the right thing" - Choose the correct tariff code




After finishing the show Breaking Bad, I started to follow its derivative show Better Call Saul. Saul Goodman, formerly named as Jimmy McGill is at a small name attorney hustling to make a name for himself. He is " morally flexible " , sometimes he will use tricks to benefit himself as long as it is legal. However, when facing some critical moment, he said, " it is not about doing it quickly. It is about doing the right thing, " I really recommend this show.


Back to today's topic, the principle of " doing the right thing" for the customs broker, is to provide as accurate and complete information as you can to the U.S custom. Although making an entry with 50 lines seem a lot of work, if that is what supposed to be, you have to do it anyway. If you group all the items into 5 lines and when the shipment gets examined, the tactics might backfire at the end. On the other side, the importer is the ultimate responsible party to provide accurate classification as this is reasonable care requirement of U.S custom compliance. If you would like to save duties by misusing tariff code, such non-compliance conduct can result in substantial cost, both in back duties and penalties for the importer.



I have a real example here.


So this importer sells a large range of cleaning machines ( like commercial level vacuums and cleaning machines) and its components, accessories. So he simply provides to the broker one tariff code 84519000 for all its invoiced items. By definition from HTSUS book,


84519000

Drying chambers for the drying machines of subheading 8451.21 or 8451.29, and other parts of drying machines incorporating drying chambers


However, if we examined the commercial invoice and packing list, there are " accessories bag", " deep clean pads" , " " handy brushes", " battery" etc. These articles, although can be used in conjunction with a cleaning machine, but should not be classified as parts of any article. If the battery leaves the cleaning machine subject, it is still a battery. Apparently, the importer tried to play around the rule by claiming that battery, bag and all this and that item are just parts of the drying machines. This importer knows the bags has 17.6% duty while parts of machinery only have 3.5% duty. It makes a huge difference in the duty amount but it is not right to do so.


If you have doubt, please make sure you check with your broker whether it is ok to classify the goods be part of the parent item or not. Actually there are classes of goods that can never be considered to be parts of a parent item. These are considered to be "Parts of General Use" defined in Note 2 to Section XV, HTSUS. These articles include springs, nails, screws, pipe fittings, etc. Under no circumstances can they be considered to be parts of any article, but must be classified under their own headings


One size CANNOT fit all.


In any case, if you feel that you don’t understand the meaning of a particular heading or subheading, there are several tools for you to utilize


The Customs Ruling Online Search System


https://rulings.cbp.gov/home


The Customs Ruling Online Search System (CROSS) is a very user-friendly system that allows you to search by keywords. You can either enter descriptive names for your article or if you want to see what customs has classified under a particular HTSUS number, put that number in and see rulings that have been issued classifying products under that number.


The Harmonized Tariff Schedule of the United States


https://www.usitc.gov/tata/hts/index.htm


This is the official and most updated listing of 10-digit product classifications for products imported into the United States.

You will find the six General Rules for the Interpretation of the Harmonized System (GRI’s), found on page one of the EN. These rules are also found at the beginning of the HTSUS. However, the EN has detailed explanatory notes on all the rules, so it is considerably more useful.

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