In my last article I discussed the importance of properly classifying products imported into the United States. As I stated, the Harmonized Tariff number determines the duty rate that U.S. Customs applies to imported products.
In the first article I wrote for the International Trade Blog, I examined the importance of proper product classification for the importer. Accurate classification is a reasonable care requirement of U.S. Customs and Border Protection (CBP), and non-compliance can result in substantial cost, both in back duties and penalties for the importer.
I noted in that initial article that proper classification requires an understanding of the rules and the process. What follows are my recommendations to anyone who has to classify product.
The Generalized System of Preferences (GSP) was established by the Trade Act of 1974 as a mechanism by which U.S. trade policy can assist so called Beneficiary Developing Countries or BDCs.
Under GSP, certain articles designated by A, A*, or A+ in the Special subcolumn of the Harmonized Tariff Schedule of the United States (HTSUS) may enter the U.S. duty free if they qualify under the GSP regulations as found in the Customs Regulations of the United States.
The theory is that by allowing certain goods to enter free of duty, the U.S. is able to support indigenous manufacturing and production and thus raise the standard of living of the beneficiary country.
With more than 20 years of observing new businesses try to get into international trade, I have seen many mistakes made and many companies fail. I am going to give you my perspective on what new importers, particularly those dealing in consumer goods, should not do.
Since U.S. Customs and Border Protection (CBP) announced the Customs-Trade Partnership Against Terrorism (C-TPAT) in November 2001, I have been recommending to importers that they should participate.
This article will give you more information about what C-TPAT is, why you should participate, and how to apply.
As someone who works with importers of various sizes and with different product mixes, people often ask me what they need to know to start importing.
The first thing I always point out is that U.S. customs regulations continually change. It is every importer’s responsibility to stay abreast of these changes.
With that caveat in mind, I would offer the following advice to new importers.
In previous columns, I discussed the concept of informed compliance under which importers in the United States are required by law to understand the U.S. customs regulations as they apply to their importations and to comply with them completely.
One major problem with this concept, however, is that the customs regulations are complicated and are constantly being changed. Moreover, Customs and Border Protection (CBP) regularly issues rulings further interpreting the regulations and product classifications.
In an earlier article (Everything has a Value—to U.S. Customs), I stated that the value of any type of assist must be added to the transaction value of imported merchandise in order to obtain the correct value for customs duty purposes.
I went on to say that this was an extremely complicated subject. In fact, the whole subject of assists is so complicated that they are the first subject covered in the official Customs Valuation Encyclopedia.