Tariff Classification Disputes
All goods imported into the United States must be classified under the Harmonized Tariff Schedule of the United States (HTSUS). Since tariff classification determines the effective rate of duty, it is common for disputes to arise between Customs and importers over which classification applies.
Classification under the tariff is determined by certain guiding principals set forth in the General Rules of Interpretation (GRI) and the Legal Notes of the tariff. Frequently, classification turns on the application of legal principals, and often by judicial precedents.
Should such a disagreement arise, the provisions of 19 U.S.C. § 1592 (the Customs fraud and negligence statute), often allow the government to "claw-back" duties over a period of 5 prior years of import shipments, and to additionally impose harsh civil penalties, and interest charges. See, Customs Penalties.
Importers are therefore wise to secure advance guidance from Customs attorneys in order to establish "reasonable care" (and negate potential allegation s of negligence).
If faced with an active dispute over tariff classification, then counsel can invoke various legal mechanisms to preserve the importers rights to defend itself, and to dispute the claims.