Tariff Classification

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Tariff Classification

All goods imported into the United States must be classified under the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS is an extensive nomenclature (like the dewey decimal system) which allows customs to categorize all goods entering the commerce of the United States.

As you might imagine, classification can be complex, even with mundane items. For example, whether a item constitutes a “case” under heading 4202, HTSUS, or a “camera part” under heading 8525, HTSUS, may ultimately hinge on specific facts and a legal analysis that take into account the General Rules of Interpretation (GRI), the Legal Notes of the HTSUS, U.S. judicial precedents, past Customs rulings, and various types of WCO materials.  We hold extensive experience in fighting these legal battles.

Tariff Disputes with U.S. Customs

Since tariff classification determines the effective rate of duty, it is common for disputes to arise between Customs and importers over which classification applies. Customs holds a mandate to protect the revenue of the Treasury - this means that CBP may disagree with an importer’s classification, and rate advance a shipment.

Should such a disagreement arise, the provisions of 19 U.S.C. § 1592 (the Customs fraud and negligence statute), allow the government to "claw-back" duties over a period of 5 prior years of prior imports , and to impose harsh civil penalties, and interest charges against all of them.  See, Customs Penalties.

Importers are therefore wise to use experienced attorneys to render advance guidance establishing “reasonable care" (to negate negligence claims).  

If such advance precautions were not taken, however, experienced counsel can sometimes shield the importer from the civil penalties by promptly filing a prior disclosure. Counsel can also actively challenge Customs assessment, via the complex administrative procedures and once those procedures are exhausted, the issue can be subject to litigation in the U.S. Court of International Trade.

Tariff Engineering

Tariff engineering in a term used to leverage an understanding of the tariff to create more competitive business strategies. For example, garlic powder might ordinarily be classified under heading 7012 as garlic “not further processed”, however, if blended with even only 1% onion powder, that commodity may qualify for favorable tariff treatment as a “vegetable blend.” The discovery of such opportunities, and long-term strategies to create such new tariff opportunities, are both an important part of our daily work.

Miscellaneous Tariff Bill (MTB)

Tariffs are a means of shielding U.S. business from foreign competition - thus, when no U.S. businesses would be harmed, Congress is often amenable to the elimination of tariffs. The MTB is the legislative vehicle for this process. The process is administered by the International Trade Commission (ITC) in accordance with the American Manufacturing Competitiveness Act of 2016 (AMCA). We assist importers in navigating this complex path to obtain duty free (or reduced duty) treatment. The next MTB round will begin again in October, 2019.


Curated news related to tariff classification:

*Next MTB round to open October, 2019.


We are legal experts in tariff classification…

Contact a firm attorney at 415-498-0070.