Did you know?
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. If you are maintaining separate parts lists for HTS and Schedule B codes this could be a time saver.
From the tariff:
For reporting exports, the provisions of this HTS publication may generally be used in place of the reporting codes of Schedule B on the Shipper’s Export Declaration, or under the program for electronic reporting of exports. Except as noted below, the statistical reporting numbers in the HTS (with the article descriptions and units of quantity) for articles falling in chapters 1 through 97 may be used in place of those in Schedule B. The special prefix symbols which denote preferential tariff treatment should not be included.
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As noted in previous posts the HTS (Harmonized Tariff Schedule) has been updated for 2022 and the changes are significant. The change record lists 12 pages of codes that have been established, discontinued. or modified. The tariff will be revised throughout the year. For reference the 2021 version was revised 12 times and the 2020 version 28 times.
It’s time to review your codes.
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An annual customs review is a good business practice. As part of your due diligence check to make sure you are taking advantage of regulations that allow importing on a duty free or preferential basis. Here are a few basic items for your annual customs review:
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Classification– review annual updates to Harmonized Tariff to make sure your codes and descriptions are accurate. Proper classification and valuation of imported goods are the first step in compliance. If you do nothing else, do this.
Duty Drawback– this is a refund of duties paid on imports that are later exported. As supply chains expand there may be new opportunities for drawback. Record keeping is key here.
Chapter 98 of the Harmonized Tariff allows duty free entry of certain categories of goods. Examples are: American Goods Returned, American Goods Repaired or Altered Abroad, and American Components Assembled Abroad.
Trade agreements– programs which allow duty free or reduced duty rate entries. There are many agreements (such as USMCA) in place.
Customs rulings– consider requesting formal customs rulings prior to large transactions. This ensures compliance and eliminates uncertainty about imports. Rulings can be requested thru the CBP website.
Correcting errors– when an entry mistake is discovered it can be corrected by a prior disclosure to CBP. The formal process is a Post-Entry Amendment/Post Summary Correction. A prior disclosure can help mitigate penalties.
Happy New Year…It’s that time of year again. The 2022 Preliminary Edition of the Harmonized Tariff Schedule has been published and there will be more changes later in January. Best practices in compliance include reviewing your parts lists to make sure you are using accurate and up to date HTS codes.
Why not take it one step further and develop a parts matrix listing descriptions, HTS codes, Schedule B codes, ECCN, License info, Country of Origin, and any other relevant import/export data? Your matrix will enable you to document new parts additions and changes as they occur. All departments involved in trade will be working with the same information so errors and omissions will be reduced.
Contact email@example.com for help with your matrix.