ASSESSMENT OF DUTY
Rates Of Duty
All goods imported into the United States are subject to duty or duty-free entry in accordance with their classification under the applicable items in the Harmonized Tariff Schedule of the United States. An annotated loose-leaf edition of the tariff schedule may be purchased from the U.S. Government Printing Office, Washington, DC 20402. (See 19 U.S.C. 1202.)
When goods are dutiable, ad valorem, specific, or compound rates may be assessed. An ad valorem rate, which is the type of rate most often applied, is a percentage of the value of the merchandise, such as five percent ad valorem. A specific rate is a specified amount per unit of weight or other quantity, such as 5.9 cents per dozen. A compound rate is a combination of both an ad valorem rate and a specific rate, such as 0.7 cents per kilo plus 10 percent ad valorem.
Free of Duty or Dutiable
Rates of duty for imported merchandise may vary depending upon the country of origin. Most merchandise is dutiable under the most-favored-nation—now referred to as normal trade relations—rates in the General column under column 1 of the tariff schedule. Merchandise from countries to which these rates have not been extended is dutiable at the full or “statutory” rates in column 2 of the tariff schedule.
Free rates are provided for many subheadings in columns 1 and 2 of the tariff schedule. Duty-free status is also available under various conditional exemptions which are reflected in the Special column under column 1 of the tariff schedule. It is the importer’s burden to show eligibility for a conditional exemption from duty.
One of the more frequently applied exemptions from duty occurs under the Generalized System of Preferences (GSP). GSP-eligible merchandise qualifies for duty-free entry when it is from a beneficiary developing country and meets other requirements as discussed in Chapter 17. Other exemptions are found under the subheadings in Chapter 98 of the tariff schedule. These subheadings include, among other provisions, certain personal exemptions, exemptions for articles for scientific or other institutional purposes, and exemptions for returned American goods.
Rulings On Imports
CBP makes its decision on the dutiable status of merchandise when the entry is liquidated after the entry documents have been filed. When advance information is needed, do not depend on a small “trial” or “test” shipment because there is no guarantee that the next shipment will receive the same tariff treatment. Small importations may slip by, particularly if they are processed under informal procedures that apply to small shipments or in circumstances warranting application of a flat rate. An exporter, importer, or other interested party may get advance information on any matter affecting the dutiable status of merchandise by writing to the port director where the merchandise will be entered or to:
Director, National Commodity Specialist Division
U.S. Customs and Border Protection
One Penn Plaza, 11th Floor
New York, New York 10119
or to:
U.S. Customs and Border Protection
Attention: Office of Regulations and Rulings
Washington, DC 20229
Detailed information on the procedures for the issuance of administrative rulings is given in 19 CFR Part 177.
Binding Decisions
While you will find that, for many purposes, CBP ports are your best sources of information, informal information obtained on tariff classifications is not binding. Under 19 CFR part 177, the importing public may obtain a binding ruling, which can be relied upon for placing or accepting orders or for making other business determinations, under Chapters 1 through 97 of the Harmonized Tariff Schedule or by writing to:
National Commodity Specialist Division
U.S. Customs and Border Protection
One Penn Plaza, 11th Floor
New York, New York 10119
The ruling will be binding at all ports of entry unless revoked by the CBP Office of Regulations and Rulings.
The following information is required in ruling requests:
• The names, addresses and other identifying information of all interested parties (if known) and the manufacturer ID code (if known),
• The name(s) of the port(s) at which the merchandise will be entered (if known),
• A description of the transaction; for example, a prospective importation of (merchandise) from (country),
• A statement that there are, to the importer’s knowledge, no issues on the commodity pending before CBP or any court, and
• A statement as to whether classification advice has previously been sought from a CBP officer, and if so, from whom, and what advice was rendered, if any.
A request for a tariff classification should include the following information:
• A complete description of the goods. Send samples, if practical, sketches, diagrams, or other illustrative material that will be useful in
supplementing the written description,
• Cost breakdowns of component materials and their respective quantities shown in percentages, if possible,
• A description of the principal use of the goods, as a class or kind of merchandise, in the United States,
• Information as to commercial, scientific or common designations, as may be applicable, and
• Any other information that may be pertinent or required for the purpose of tariff classification.
To avoid delays, your request should be as complete as possible. If you send a sample, do not rely on it to tell the whole story. Also, please note that samples may be subjected to laboratory analysis, which is done free of charge. If a sample is destroyed during laboratory analysis, however, it cannot be returned.
Information submitted and incorporated in response to a request for a CBP decision may be disclosed or withheld in accordance with the provisions of the Freedom of Information Act, as amended 5 U.S.C. 552, 19 CFR 177.8(a)(3).
Protests
The importer may disagree with the dutiable status after the entry has been liquidated. A decision at this stage of the entry transaction is requested by filing a protest and application for further review on CBP Form 19. For entries filed before December 18, 2006, the time limit is within 90 days after liquidation, but for entries filed after that date, it is now 180 days (see CFR part 174; see 19 USC 1514(c)(3) as amended by section 2103(2)(B), Pub. L.108-429. The same legislation also eliminated the 1 year to file protests for clerical errors and mistakes of fact for entries after 12/18/04). If CBP denies a protest, the adverse decision may be appealed to the U.S. Court of International Trade.
Liability For Duties
There is no provision under which U.S. duties or taxes may be prepaid in a foreign country before exportation to the United States. This is true even for gifts sent by mail.
In the usual case, liability for the payment of duty becomes fixed at the time an entry for consumption or for warehouse is filed with CBP. The obligation for payment is upon the person or firm in whose name the entry is filed. When goods have been entered for warehouse, liability for paying duties may be transferred to any person who purchases the goods and desires to withdraw them in his or her own name.
Paying a customs broker will not relieve the importer of his or her liability for customs charges (duties, taxes, and other debts owed CBP) should those charges not be paid by the broker. Therefore, if the importer pays the broker by check, he or she should give the broker a separate check, made payable to “U.S. Customs and Border Protection” for those customs charges, which the broker will then deliver to CBP.
If the entry is made in the name of a customs broker, the broker may obtain relief from statutory liability for the payment of increased or additional duties found due if (1) the actual owner of goods is named, and (2) the owner’s declaration whereby the owner agrees to pay the additional duty and the owner’s bond are both filed by the broker with the port director within 90 days of the date of entry.
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