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The Harmonized Tariff Schedule

The Harmonized Tariff Schedule. Fear Not!! You will know it by the end of the weekend!! It is only 3,537 pages!. How the HTS is Organized. Table of Contents 22 sections 99 chapters GRI – General Rules of Interpretation GN – General Notes GSN – General Statistical Notes

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The Harmonized Tariff Schedule

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  1. The Harmonized Tariff Schedule Fear Not!! You will know it by the end of the weekend!! It is only 3,537 pages!

  2. How the HTS is Organized • Table of Contents 22 sections 99 chapters • GRI – General Rules of Interpretation • GN – General Notes • GSN – General Statistical Notes • 99 chapters of grouped articles (further grouped in 22 sections) • Index and other info such as port codes etc…

  3. The HTS only applies to goods imported into the Customs territory of the US. (50 states, D.C., Puerto Rico) • Some goods are exempt from the HTS, General Note 3(e) of the HTS exemptions are: • 1. Coffin, corpse, and accompanying flowers • 2. Telecommunications transmissions • 3. Business or Eng. Records, diagrams, data, paper or data storage • 4. Goods returning from Space owned by USA or USA persons. (space shuttle doesn’t pay duty to return…..haha) • 5. Goods exported from Customs territory and returned within 45 days as undeliverable • 6. Aircraft parts from US aircraft returned within 45 days and not having left custody of carrier or foreign customs. • 7. Not in Note 3(e), but Currency in current circulation

  4. HTS Continued • Lets Look at What We should Tab • What are Section Notes and Chapter Notes • Lets Look at a Sample HTS page

  5. Remember that you can not do an Informal Entry for certain products when over $250. This applies to Sections 7,8,11 & 12. (NOTE THIS CHANGES FOR OCTOBER TO HTS CH. 99 subchapters III AND IV.) • Lets identify the Drawback ports and highlight those in the Port Code Section.

  6. Rules of Classification that you have to Know • EO NOMINEE – By Name, articles shall be classified by the most specific description.

  7. Rules of Classification that you have to KnowGRI 1 • HEADINGS, SECTION AND CHAPTER NOTES are the only sections with legal authority • The index, titles of chapters and sections, and table of contents are for reference only - no legal significance

  8. Rules of Classification that you have to KnowGRI 2(A) • When an article is named in the HTS, that reference also applies to an incomplete, unfinished, or unassembled article as long as it has the essential character of the finished article • Ex. Bike without seat is still a bike • Ex. Bike broken down into a box is still a bike • Essential character – The character of item shown by use, material, weight, quantity, components.. • Ex. brass door knob 90% steel 10% brass- is a brass doorknob

  9. Rules of Classification that you have to KnowGRI 2(B) • Any reference in the headings to a material or substance includes mixtures or combinations of that substance with other materials. • Milk with added calcium and vitamin “D” is classified as milk • (note that goods consisting of more than one material or substance are classified under GRI 3)

  10. Rules of Classification that you have to KnowGRI 3(a) • When Goods are Prima Facie (= equally) classifiable under 2 or more headings, the most specific heading wins • Sets of products for “particular need” shall be classified by essential character, Random sets classified individually • Ex. Packet of pasta and sauce – classify as pasta HTS 1902 • Liquor and wine bottle – classify separately

  11. Rules of Classification that you have to KnowGRI 3(b) & (c) • If GRI 3(a) does not apply, mixtures or sets shall be classified by the material or component which gives them their essential character • Ex. Kit with cell phone, adapter, manual, cables.. essential character is a cell phone • IF none of the above apply, the Biggest number wins, classify by the last HTS number GRI 3(c)

  12. Rules of Classification that you have to KnowGRI 4 • Goods not classifiable Under GRI 1-3, classify by the heading with the “most akin” description • Ex. Wine coolers, Mike’s Hard Lemonade or other prepared type alcoholic beverages classify as “other alcoholic beverages… not fruit juices

  13. Rules of Classification that you have to KnowGRI 5 (a) & (b) • CASES AND PACKING • GRI 5(a) Cases fitted for the product should be classified with their product • Ex. Camera and case, musical instrument and case • GRI 5(b) Packing should be classified with its product unless it is substantial and re-usable • Ex. Candy with crystal bowl – classify these separate

  14. Rules of Classification that you have to KnowGRI 6 • The above rules apply to the sub headings as well as headings • But, only compare sub headings within the same heading level

  15. Rules of Classification that you have to Know • “Principal use rule” – (see 10.131) can classify by principle use of the article, how is it used by public at large. IF requested proof must be shown within 3 years of import. • This is US rules 1(a) & (b)

  16. Rules of Classification that you have to Know • PARTS – Parts of articles (parts of a specific thing) do not prevail over a specific provision for the parts. • Ex. speakers that are for automobiles vs. auto parts (classify as speakers not auto parts) • This is US rule 1(C)

  17. Rules of Classification that you have to Know • METALS AND TEXTILES • articles of base metals and two or more textiles are classified by the metal or textile of “chief weight”. • If of equal weight, classify by biggest number. The biggest number wins rule. • Unisex garments are classified as Woman or girls • Textiles of multiple components are classified according to article that gives essential character

  18. Rules of Classification that you have to Know • COMINGLING – Highest rate prevails unless you show C’s: • The commingling was not intentional and it is cost prohibitive to separate, then you use next lowest duty rate. (CFR 152.13) • Ex. Container of various bolts 10%, screws 7%, nuts 5% that are all commingled etc…

  19. Rules of Classification that you have to Know • Duty • Rates are listed in Column I and II • Column I - general and special which is free or reduced b/c of trade program • Column II - Bad and Comi countries, not favored, high rates • Types: • Ad Valorem - 5% • Specific - Per Dozen; Per Kilo, etc. • Compound - 3% + $0.02/Doz • Free

  20. General Statistical Notes • GSN’s cover statistical information that should be included with basic entries. • Note “X” used to identify a set when entry filed • Note “X” is also listed in Units Quantity column to indicate you only report gross weight, not how many. • Note “V” appearing in the Units of Quantity means the value of the article is to be reported with the other quantity measurement

  21. Textile Category Numbers • There are probably over 100 category numbers, however, they can be broken down as follows: • 200 series are of cotton and or man made fiber • 300 series are of cotton (usually 50% or more by weight) • 400 series are of wool (usually 17% or more by weight) • 600 series are of man made fiber (usually 50% or more by weight) • 800 series are of silk blends or non cotton vegetable fibers

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