There are so many questions, with an even greater amount of potential answers when importing goods into the United States. What is the HTS classification? Are the product labels marked correctly for entry? What is the product’s country of origin? Should the product receive NAFTA, DR-CAFTA, GSP or some other duty-free treatment? What is more important is that the answers to these questions mean real money! For example, if the product you are importing is eligible for duty-free treatment, it could mean the difference between paying a double-digit tariff versus none at all.
Answering these questions is not always so simple, and are often subject to interpretation. An importer could assume that their own guesses are correct, but, taking that leap places in jeopardy the profitability of the venture, especially as profit margins become ever so tight. What’s worse is that a wrong guess could potentially subject the company to fines if Customs and Border Protection (CBP) simply does not agree with the interpretation you have used in the past. CBP statute of limitations is five years – that translates into a multitude of entries potentially subjected to CBP fines if you have been guessing wrong.
How do you eliminate the guesswork? Submit a Binding Ruling Request! Put simply, a Binding Ruling Request is an official request to CBP that includes relevant information, and often a sample of the product, for CBP to review and respond as to the following:
(1) HTS Classification
(2) Marking/Labels Ruling
(3) Country of Origin Determination
(4) Valuation Rulings
(5) Applicability of trade program or agreement rulings
A Binding Ruling Request must be responded to within 30 days from receipt, meaning that the process is generally very quick. One has to remember, however, that if the results of a Binding Ruling are not favorable, while there is an appeal process, clearly at that point, it becomes much more difficult to obtain a favorable result.
It is essential that the initial Binding Ruling Request provide CBP with the rational and authority to support your position. There are literally hundreds of Rulings that are posted by CBP in a database referred to as Customs Rulings Online Search System (CROSS). The Rulings can often be confusing, and determinations can turn on the slightest of nuisances.
The moral of this story is get rid of the guesswork and create certainty, but, make sure you have a professional help when doing so.
Helpful Link: http://rulings.cbp.gov/