More Alphabet Soup- What is the CCL?

As a former LSP (Logistics Service Provider) account executive, and currently as a Licensed Customs Broker and consultant, I have had many clients assure me that their commodities fall under EAR99 and NLR.

EAR99 means that an item is subject to Export Administration Regulations but is not listed with a specific ECCN (Export Control Classification Number). NLR is the abbreviation for No License Required. The first step in the license/NLR decision is to determine ECCN or EAR99.

The CCL (Commerce Control List) is an index listing commodities and product groups. It is a good starting place for researching ECCNs. Here is the link for your reference:

https://bis.doc.gov/index.php/documents/regulations-docs/13-commerce-control-list-index/file

For help with ECCN contact mitch@adhoclogistics.com

LinkedIn Comments- Fast or Accurate Classifications?

Bill Connolly, LCB

Mitch, I couldn’t agree more with what you say and honestly, CBP expects brokers to be experts in all chapters while CBP IS Teams focus on certain areas. This is not a knock on CBP by any means. That is why they are such a great resource. Importers, your best bet is a Binding Ruling and I’m amazed at the number of importers who will not file for rulings. Mostly it’s because they do not want to find out the HS they’re using is wrong, but you should want to know your exact costs to protect yourselves and your bottom line.

Mitch Kostoulakos, LCB

Hi Bill thanks for your input. I have also found that importers are sometimes reluctant to request a ruling because they don’t want to “invite “ CBP into their business. I agree that a ruling is good business.

Fast or Accurate Classifications ?

How many classifications per hour should a Licensed Customs Broker be able to complete? This question came up in a recent LinkedIn discussion and resulted in many comments. In my opinion it is not possible to answer the question accurately and even providing a range is problematic. A thorough classification includes HTS lookup, GRI (General Rules of Interpretation) review, checking notes and 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. Finally, the process needs to be documented for future reference and parts lists updated.

As an independent consultant and Licensed Customs Broker my most frequent client requests are for classification help. While some commodities are easy to classify, most require research and interpretation. Here is an example of an easy one with no research or interpretation needed:

9506.69.2040 Baseballs

Here is one which is more challenging and time consuming:

8532.10.00 00 Fixed capacitors designed for use in 50/60 Hz circuits and having a reactive power handling capacity of not less than 0.5 kvar (power capacitors).

So what’s your goal; fast or accurate?

For accurate classification help contact mitch@adhoclogistics.com.

LinkedIn Comment- Classification Speed

Amy Breeman, MBA, LCB

I have applied to a couple of positions, along the lines of a classification specialist and trade consultant/manager. One of the key questions that I have been noticing is the amount of time it takes for you to make a classification. If for instance it is a product I had no idea about, I would do a thorough look up of the product, look up the HTS, GRI, notes, CROSS. It may take 10 to 15 minutes depending on how much a rabbit hole you can go down. I am very methodical when doing a classification, and some may call this too much time.

I had never found a question like this 5 to 10 years ago when applying for brokerage or other positions where classification was part of the job. What are your thoughts. Is this a fair question for employers to be asking?

Mitch Kostoulakos, LCB

10-15 minutes is reasonable for a thorough classification…certainly this is offset by faster classifications for commodities which are very familiar to you….better to be accurate than fast

2 Classification Lists? Check This Out

If you are maintaining separate parts lists for HTS and Schedule B codes this could be a time saver. Check out the Notice to Exporters on the Harmonized Tariff Schedule (2021 Basic Revision 7).

Exporters may use HTS codes in place of Schedule B. Go to https://hts.usitc.gov/current and choose the view tab. As always, there are exceptions, but you may be able to avoid toggling between lists.

Contact mitch@adhoclogistics.com for classification help.

Are You Unmanaging?

Many of my clients are hard-working owners or operators of small businesses. They don’t have in-house compliance or logistics expertise so must wear several hats. Day to day activities or unexpected issues take up most working hours. As a result, functions such as logistics planning and import/export compliance are often unmanaged or left completely to LSPs (Logistics Service Providers).

Making sure that your business is in compliance with import and export regulations is good risk management as well as good business. Think of it as insurance. A few basic steps can make a big difference and can be implemented quickly.

Ad Hoc Logistics can provide step by step guidelines, train your employees, and set up sustainable procedures. Recent consultations included our copyrighted programs:

Exporting for Smart People- Because You’re No Dummy

Red Flag Screening

A to Z of Managing Logistics

Contact mitch@adhoclogistics.com for a no obligation discussion.

Amateur Importing

Clients often say “we’ve used the same harmonized codes for years” and “our products are duty free“. As a Licensed Customs Broker and consultant this tells me that I need to do some checking on the client’s behalf. Using obsolete or invalid HTS codes is a sign of an amateurish operation. It is likely that, for these clients, commercial invoice descriptions need updating. If they are also an exporter we should check ECCNs, License Exceptions, and Schedule B numbers as well.

The Harmonized Tariff Schedule code is a 10-digit import classification system that is specific to the United States. HTS codes, also called HTS numbers, are administered by the U.S. International Trade Commission (ITC).

Customs brokers use the HTS, along with CBP regulations, in their day to day business. Importers and traders may also make use of the HTS in determining duty rates. Checking the validity of harmonized codes at least semi-annually is a good business practice. What may be surprising is the frequency of revisions to the HTS.

The tariff archives show that the 2020 HTS was revised 28 times. The 2021 version already lists 7 revisions. Here are the links to the changes. Don’t assume that your codes are valid. A little due diligence helps avoid problems down the road. Contact mitch@adhoclogistics.com for a review of your HTS codes.

2021 Basic Revision 7

2021 Basic Revision 6

2021 Basic Revision 5

2021 Basic Revision 4

2021 Basic Revision 3

2021 Basic Revision 2

2021 Basic Revision 1

2021 Basic Edition

October 2021 CBLE

Planning to take the October Customs Broker License Exam? Hopefully you are well into your preparations by now. If you would like study tips contact mitch@adhoclogistics.com. Best of luck !

From the CBP website:

The next Customs Broker License Exam (CBLE) will be offered both in-person and remotely on Thursday, October 21, 2021. Exam Registration will open on August 23, 2021 and close on September 21, 2021.

Here are the reference materials for the exam. They will be provided electronically on exam day:

Harmonized Tariff Schedule of the United States (Basic Edition 2020) (HTSUS) Harmonized Tariff Schedule PDFs (usitc.gov)

Title 19, Code of Federal Regulations (19 CFR 2020, revised as of April 1, 2020) (Parts 1 to Part 199)(CFR 0-140)(CFR 141-199) Code of Federal Regulations (Annual Edition) | govinfo

ACE Entry Summary Instructions Version 2.4a ACE Entry Summary Instructions | U.S. Customs and Border Protection (cbp.gov)

Right to Make Entry (RTME) Directive 3530-002A 3530-002A Right to Make Entry | U.S. Customs and Border Protection (cbp.gov)

ACE Entry Summary Business Rules and Process Document (Trade-External) (ACE BRPD) (Version 10.5 – Section 1 through 12 only) March 2021 ACE Entry Summary Business Process | U.S. Customs and Border Protection (cbp.gov)

https://www.cbp.gov/trade/programs-administration/customs-brokers/license-examination-notice-examination

Those Annoying Compliance Geeks

The current logistics environment is as challenging as I have ever seen. Tight capacity in trucking, containers not available where needed, astronomical ocean rates, and shortages of critical components. These are just a few of the problems confronting supply chain managers on a daily basis. So it is understandable that compliance may be taking a back seat at the moment. Who has the time or energy to deal with that annoying compliance person? As a proud compliance geek, let me offer the following.

Compliance is about attention to detail, consistency, process, and oversight. I guarantee that your compliance folks are not trying to practice “sales prevention”. The goal is to complete transactions the right way, avoid customs or logistics delays and reduce exposure to fines and penalties. However, there is no doubt that complying with all of the agencies involved in international trade generates a lot of red tape and can be frustrating.

Compliance managers must have the authority to stop shipments when red flags appear. In order to ensure independence compliance folks should not be in the supply chain, finance, or marketing chain of command. Better reporting relationships would be with the legal department, CEO, or COO.

Consider just a few of the details that can make or break a smooth transaction:

Harmonized Codes to the full 10 digits including heading and sub heading. It is very easy to transpose digits.

Schedule B Codes, ditto

ECCN , Alpha numeric, number, letter, followed by 3 numbers. Example 4A994. Then followed by sub paragraph level and don’t forget the dot between the last number and the sub para.

License Exceptions are designated by 3 letter codes and must be compatible with the ECCN listed.

COO, Country of Origin markings and proper codes on documents and AES filings. Best not to guess here. Have you ever entered CH for China?

Valuation must be determined accurately and is best covered in a separate post which I have done on 05/09/2019.

These are just some of the basics. We could also mention commodity descriptions, red flag screening, incoterms, and plenty of other details. So, hats off to the compliance teams.

For assistance contact mitch@adhoclogistics.com