As noted in previous posts, HTS (Harmonized Tariff Schedule) or Schedule B classification is the first step in export compliance. Other critical factors are ECCN (Export Control Classification Number) or EAR99, License/License Exception or NLR (No License Required), and Country of Origin. We’ll cover ECCN in this post.
Order of Review– Determine if your commodity is subject to the EAR (Export Administration Regulations). Use BIS decision tree. https://www.bis.doc.gov/index.php/export-control-classification-interactive-tool
CCL (Commerce Control List)– If your commodity falls under the EAR it is either EAR99 or requires an ECCN. EAR99 means that an item is subject to Export Administration Regulations but is not listed with a specific ECCN. Check the CCL. https://www.bis.doc.gov/index.php/regulations/commerce-control-list-ccl
CCL Index- The CCL is not especially user friendly but the CCL Index is a good resource. If you find your commodity in the index you can then dig deeper into the CCL. https://bis.doc.gov/index.php/documents/regulations-docs/13-commerce-control-list-index/file
For help with ECCN classification contact firstname.lastname@example.org
I am working with a client on a few HTS (Harmonized Tariff Schedule) classifications and they were surprised that I could not just “look them up”. In fact I may have been able to pick out plausible codes for their commodities, but that would be malpractice on my part . Compliance adds value through attention to detail, established protocols, oversight, and documentation. HTS classification is the first step in both export and import compliance.
Proper classification includes HTS lookup, GRI (General Rules of Interpretation) review, checking both chapter and additional notes, as well as CROSS (Customs Rulings Online Search System). For some commodities it may be necessary to consult with a subject matter expert in engineering, purchasing, or manufacturing for details about the item.
This is the procedural aspect of classification but there is more. Most listings require interpretation of the tariff language based on experience. Finally, the process needs to be documented for future reference and parts lists updated.
Here is an example of an easy classification with no research or interpretation needed:
Here is one which is more challenging and time consuming:
8532.10.0000 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).
For accurate classification help contact email@example.com.
Here are a couple of questions from the April 2022 CBLE (Customs Broker License Exam). Non-brokers what are your answers?
- Importer ABC Inc. is importing widgets from Canada to the United States. The company
hires LMN Logistics, a freight forwarder (FF), to move the widgets from Vancouver, BC
to Seattle, WA. LMN Logistics contracts with licensed Customs broker, XYZ Brokers, in
Seattle to file the Customs entry. Which entity does NOT have the right to make entry?
A. ABC Inc.
B. LMN Logistics
C. XYZ Brokers
D. A and C
E. B and C
- What type of entry is required for goods brought into the customs territory of the United
States by the National Aeronautics and Space Administration (NASA) from space or from
a foreign country as part of an international program of NASA?
A. 01 – Formal Entry
B. 11 – Informal Entry
C. 51 - Defense Contract Management Agency (DCMA) is the importer of record
and filer of the entry
D. 52 – Any U.S. Federal Government agency (other than DCMA) is the importer of
E. Entry is not required
Global Trade Compliance ProfessionalsLalitha D
Question for thought:
The client wants you to include a HS Code different from what is appropriate in the bill of lading/SAD/Entry summary.
What would you do?
Mike Bing Senior customs consultant
Listen very carefully and suggest you are willing to let Customs know about the different code. If the client insists you should not do that, refer him to another service provider. If he agrees, get an instruction in writing, acknowledging your advice but requesting a different code.
LinkedIn contacts and outreach from search firms tell me that logistics and compliance expertise is in demand. This is good news for experienced professionals. It may also present an opportunity for ambitious shippers to upgrade their skills.
You may be looking to add a logistics or compliance pro to your staff and, understandably, want to make a good selection. In the meantime let me suggest training your shippers in some export compliance basics. I have always warned that compliance should not be left to a busy shipping department as the factors are complex and need to begin early in the order cycle. However, a few hours of training is a good investment, enabling shippers to spot possible export violations before shipments leave your dock. It will also allow your new professional to focus on more strategic matters and hit the ground running.
BIS (Bureau of Industry and Security) offers basic on-line export training at no cost. Why not improve the skills of your existing staff (on company time of course)?
Ad Hoc Logistics can also help with specific training at your site. Contact firstname.lastname@example.org.