Customs Classification and Valuation

Piña Customs Advisory Services (PCAS) provides assistance in classifying –under the Harmonized Tariff Schedule of the United States (HTSUS)- the products you are importing into the United States. In addition, PCAS provides assistance in establishing the Customs value of your importations into the United States in accordance with the Trade Agreements Act of 1979.

Classifying Imported Merchandise

If an importer makes a mistake when describing or classifying imported goods, the importer may be penalized under the Mod Act if it is demonstrated that he did not exercise reasonable care. The standards for exercising reasonable care when it comes to describing and classifying imported goods are:

1. Did you provide a complete and accurate description of the imported merchandise to Customs in accordance with 19 USC 1484?
    

2. Did you provide a correct tariff classification number of your merchandise to Customs in accordance with 19 U.S.C.1484?
    

3. Have you obtained a Customs "ruling’ regarding the description of the merchandise or its tariff classification, and if so, have you followed the ruling and brought it to Customs attention?
    

4. Have you consulted the tariff schedules, Customs informed compliance publications, court cases and/or Customs rulings to assist you in describing and classifying the merchandise.
    

5. Have you consulted with a Customs "expert” to assist in the description and/or classification of the merchandise?
    

6. If you are importing goods under tariff preferential tariff testament provisions such as NAFTA or, 9802, how have you verified that the merchandise qualifies for such status? Have you obtained any required or necessary documentation to support the claim? If making a NAFTA claim, do you already have a NAFTA certificate of origin in your possession?
    

7. Have you maintained and can you produce any required entry documentation and supporting information?
   
   Comments:
   
   Importers must ensure that all of the goods that they are importing into the U.S. are correctly classified. If the good is specifically provided for by name -in the HTSUS- or the importer has a written ruling issued by Customs Headquarters the importer is relatively safe unless Customs has revoked the ruling. Under the Mod Act, the Bureau of Customs and Border Protection (CBP) is required to publish all proposed administrative ruling revocations in the Customs Bulletin. The great majority of these revocations regard HTSUS classification numbers. Importers should not feel too safe because they have a binding ruling- it may have been revoked. It is now the importer’s responsibility to be aware of any ruling revocations that apply to the company. If the goods are not specifically provided for by name in the HTSUS or there is no binding ruling, the importer should re-examine the imported article and see if that it is correctly classified.

Determining the Customs Value of Imported Merchandise

If an importer makes a mistake when valuing imported goods the importer may be penalized under 19 U.S.C. §1592 if it is demonstrated that the importer did not exercise reasonable care. The standards for exercising reasonable care when it comes to valuing imported goods are:

Do you know the “price actually paid or payable for your merchandise”? Do you know the terms of sale; whether there will be rebates, indirect costs, and additional payments; whether assists were provided, or commissions and/or royalties are paid? Are amounts actual or estimated? Are you and the supplier related?

1. Did you provide Customs with a proper declared value for your merchandise in accordance with 19 USC 1484 and 19USC 1401a?
    

2. Have you obtained a Customs "ruling” regarding the value of the merchandise and if so have you followed the ruling and brought it to Customs attention?
    

3. Have you consulted the Customs valuation laws and regulations, the Customs Valuation Encyclopedia, Customs Informed Compliance Publications, court cases and Customs rulings to assist you in valuing merchandise?
    

4. Have you consulted with a Customs expert to assist in the valuation of the merchandise?
    

5. If you purchased the merchandise from a related seller, have you reported that fact upon entry and that the value reported to Customs meets one of the related party tests?
    

6. Have you taken measures to ensure that all of the legally required costs or payments associated with the imported merchandise have been reported to Customs such as indirect payments, tie-ins, assists, commissions, rebates or royalties?
    

7. If you are claiming a conditionally free or special tariff classification provision for your merchandise such as NAFTA or 9802 have you reported the required value information and obtained any required documentation to support the claim?
    

8. Have you maintained and can you produce any required entry documentation and supporting information?
   
   Comments:
   
   It appears that many companies who are importing goods duty free into the U.S. are being lulled to sleep when it comes to determining the Customs value of the merchandise. These companies are under the misimpression that because their importations enter duty-free there is no need to accurately determine the Customs value of the goods. These companies are very much mistaken. Customs law states that all merchandise, including goods that enter the U.S. conditionally or unconditionally duty free, must be correctly valued under the TAA of 1979.