Category Archives: Regulatory Updates

Got Changes?

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.

For help contact mitch@adhoclogistics.com

Heads Up Exporters

Registered United States Census Bureau Logo January 4, 2022
Schedule B and Harmonized Tariff Schedule (HTS) Updated in the Automated Export System (AES)

Effective immediately, the Schedule B and Harmonized Tariff Schedule (HTS) tables have been updated to accept the 484(f) statistical changes to the January 1, 2022 codes. AES will accept shipments with outdated codes during a grace period for 30 days beyond the expiration date of December 31, 2021. Reporting an outdated code after the 30-day grace period will result in a fatal error. The ACE AESDirect program has been updated with the January 1, 2022 codes and will accept shipments with outdated codes during the grace period. There will be a second AES update later this month to add new Schedule B and HTS codes resulting from international changes to the 2022 Harmonized System.

The 2022 Schedule B and HTS tables are available for downloading at: http://www.census.gov/foreign-trade/aes/documentlibrary/#concordance

The current list of HTS codes that are not valid for AES are available at: http://www.census.gov/foreign-trade/aes/documentlibrary/concordance/hts-not-for-aes.html

For further information or questions, contact the U.S. Census Bureau’s International Trade Indicator Micro Analysis Branch:  Telephone: (800) 549-0595, select option 2 for International Trade Indicator Micro Analysis Branch Email: eid.scheduleb@census.gov Online: www.census.gov/trade Blog: https://www.census.gov/newsroom/blogs/global-reach.html We’re Here to Help We’re here to help you get the most out of Census Bureau data. If you have a question, give us a call at 1-800-549-0595.

It’s That Time of Year

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 mitch@adhoclogistics.com for help with your matrix.

https://hts.usitc.gov/current

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.

ADD/CVD Overview

For Your Customs Reference File:

ADD/CVD Anti-Dumping Duties and Countervailing Duties

Anti-dumping (ADD) and Countervailing duties (CVD) are intended to protect the US manufacturing industry from foreign manufacturers flooding the market at artificially reduced prices. Dumping occurs when foreign companies sell goods in the US at less than fair value.

Countervailing situations are when a foreign government gives their companies tax breaks and subsidies allowing them to sell goods cheaply in the US. ADD and CVD lead to foreign undercutting of US manufacturers prices.

Anti-dumping duties are calculated at a company-specific level, where the duty amount makes up for the difference between the foreign manufacturer’s price and fair market value. In these cases, certain companies have been identified, investigated, and additional duties have been charged on their products. Countervailing duties are determined on a country-specific level, and the duty rates counteract the subsidy or tax breaks given to the foreign manufacturer by their government with the intent of leveling the playing field.

When either of these situations occur, petitions are filed by U.S. manufacturers or businesses with the Department of Commerce (DOC) which, along with the US International Trade Commission (USITC), opens an investigation. If the results are positive, U.S. Customs and Border Protection (CBP) withholds liquidation of entries and collects ADD/CVD duties. The entries are not liquidated until the DOC instructs CBP headquarters to do so. CBP procedures affecting US importers A positive result; an investigation which finds evidence of injury to the US industry, triggers CBP procedures which affect US importers. For an Anti-dumping (ADD) case CBP issues a case number beginning with (A), Case # A…. for a particular manufacturer. Importers and/or customs brokers then must report the case number on every entry (CBP form 7501, block 29) pertaining to this manufacturer. CBP will also look for evidence of bond during their investigation. If determined guilty, CBP will set the penalty and retroactively collect additional duties through the bond. These additional duties are determined by ITC and DOC with CBP as the enforcing agency. Procedures for countervailing duties (CVD) are similar to those for anti-dumping duties (ADD): Investigation, case number beginning with (C), retroactive penalties. The difference is that under CVD the foreign manufacturer is subsidized by their government. 

How to determine if a commodity falls under ADD/CVD

Your customs broker should be able to help you determine if a commodity falls under ADD/CVD. Further, you can review the scope of ADD/CVD orders to determine whether the merchandise falls under the scope of an order. The scope of AD/CVD orders can be found in several places:

• Federal Register notices from Commerce, available at

https://enforcement.trade.gov/frn/index.html

https://www.cbp.gov/trade/priority-issues/adcvd/antidumping-and-countervailing-duties-adcvd-frequently-asked-questions

MidYear HTS Revisions

The United States International Trade Commission has updated the Harmonized Tariff Schedule of the United States effective July 1, 2021. Midyear is a good time to review your harmonized codes. The change record for this revision contains 4 pages of newly established, modified, and discontinued codes.

Using obsolete codes can result in customs delays, inaccurate  duty assessments, or fines and penalties. Best practices include checking the tariff periodically. While you are at it are you sure EAR99 and NLR apply to your exports?

For assistance contact mitch@adhoclogistics.com

On Your Mark

In a recent post we discussed some common reasons for customs delays. These included vague or incomplete commodity descriptions, questionable valuations, and lack of contact info for Importer of Record.

Country of Origin marking can also cause delays in clearance due to the specific regulations for imports into the US. Here is a guide produced by CBP (Customs and Border Protection) for your customs file.

https://www.cbp.gov/sites/default/files/assets/documents/2020-Jul/ICPMarking-of-COO-onUS-Imports.pdf

EAR99 and NLR? Maybe

In previous posts I have noted that many clients automatically enter EAR 99 and NLR when submitting EEI (Electronic Export Information) filings.

EAR 99 commodities fall under US Department of Commerce jurisdiction but are not listed on the CCL (Commerce Control List). NLR indicates No License Required.

Compliance best practices include at least annual verification of classifications. The CCL Index has been updated effective 05/20/2021. The list is alphabetical and easy to check so you may find that you should be using an ECCN (Export Control Classification Number) instead of EAR 99. Here is the link to the CCL Index:

https://www.bis.doc.gov/index.php/documents/regulations-docs/2329-commerce-control-list-index-3/file

Contact mitch@adhoclogistics.com for help with export compliance.

ICYMI

As noted in a recent post, best practices in compliance include auditing Electronic Export Information (EEI) filings periodically. Self filers as well as logistics service providers (LSPs) know that EEIs must be filed for exports of any single commodity valued greater than $2500 USD or if a license is required. EEI filing does not apply to shipments from the US to Canada unless they require a license.

In Case You Missed It we have new filing requirements for exports to China, Russia, and Venezuela:

New mandatory EEI filing requirements effective 9/27/2020. Here is one of the the FAQs from the BIS website.

Q28: Are exporters required to file EEI for shipments of commercial items valued under $2,500 if destined to China and it is for commercial end use?


A: Yes. The new mandatory filing requirement in Section 758.1(b)(10) applies to all items that have an ECCN and are destined to China, Russia, or Venezuela, regardless of value, end use or end user. The only one of the exemptions in Section 758.1(c) that is available to overcome this requirement is License Exception GOV.

Contact mitch@adhoclogistics.com for EEI audits.