Importers Beware; New Customs Ruling on HTS Classifications

A recent US Customs (CBP) ruling could have a wide-ranging impact on importers that rely on HTS classifications provided by third-parties other than licensed US Customs Brokers. The ruling (HQ H290535) was made based on a request by a US importer that was providing HTS classifications to their customers and noted that to do so was a violation of the US Customs Regulations regarding the conducting of customs business without a license.

The Regulations state that "customs business" can only be conducted by a party licensed as a US Customs Broker. Providing HTS classifications is considered "customs business" and a non-licensed party that does this can be subject to significant financial penalties. Further an importer that relies on HTS classification advice provided by a non-licensed party could be shown to not have acted with "due diligence" potentially exposing the importer to significant penalties as well.

The proper classification of imported goods is one of the key steps every importer must take and according to CBP the one area where they see the most errors. Importers may be paying too much or too little duty (both bad!) and providing incorrect HTS classifications could hinder CBP in their enforcement of other importing rules and regulations and expose the importer to even more penalties.

Considering this recent ruling every importer should conduct a review of their import practices to ensure they aren't in non-compliance and subject to financial risks. Please contact us for further assistance - steve@cssbrokers.com.