HS Classification 관련 Text 이것저것

[WCO - HS Dispute Settlement]

 

- While the Harmonized System (HS), as a multipurpose trade classification system, has many different applications, its primary use for now and the foreseeable future is still the collection of import duties and taxes for revenue and/or trade policy purposes (including the protection of domestic industries). This monetary function, of course, creates the potential for disputes between duty collection authorities and persons liable for duty.

- Under the Harmonized System, commodities must be clearly distinguished from one another. For each commodity or category of commodities, only one heading or subheading should be applicable, thereby precluding classification in any other heading or subheading. Generally speaking, once the classification of a good is identified in the nomenclature, the duty rate is automatically determined. Therefore, "in the beginning there was classification".

- The national background varies from country to country and this means that, at times, countries may come to different classifications for like goods.

- Whether a wearable battery-operated devices, commonly known as a “smart watch” falls within the category of communication apparatus or wrist-watches?

 

[KCS - Yes FTA]

What is HS Code?
The Harmonized Commodity Description and Coding System (HS) is an international product nomenclature developed by the World Customs Organization (WCO). It is designed to facilitate the collection of trade-related statistics and the application of tariffs on goods.
- The first six digits of HS codes are common worldwide.
- From the seventh digit onward, the HS code varies from country to country.

 

[Harmonized System (HS) Codes]

- The HS assigns specific six-digit codes for varying classifications and commodities. Countries are allowed to add longer codes to the first six digits for further classification. Expanding from the Harmonized System’s 6-digit level, the United States requires a 10-digit number to classify products being imported or exported.

- The 6-digit Harmonized System Subheading will be the same whether you are importing or exporting into any country of the World Customs Organization. This ensures that all countries uniformly classify their products. 

 

[First 6-digit code 만 유효해]

- First, it is necessary to determine the 10-digit HTS code applicable in Korea to verify the import requirements and duty rates. (As you may know, each country follows its own classification beyond the first six universal digits, so the HTS codes listed on the CI may not be valid in Korea.)
Kindly review the table below and determine the appropriate 10-digit HSK code accordingly. 
We can provide more details about import restrictions and duty rates when the valid HSK codes are identified. 

- Please note that Harmonized System (HS) codes are universally standardized up to the first 6 digits. These initial 6 digits are consistent globally, regardless of the country. However, starting from the 7th digit onward, the code differs by country, reflecting national tariff and statistical requirements.
The HS code currently provided on your commercial invoice applies specifically to your country's classification system and may not be valid or recognized in our country. To ensure accuracy and compliance, please select a 10-digit HS code that correctly falls under the universal 6-digit code, as per the classification requirements in our country.
If you need assistance determining the correct HS code applicable to our customs system, please let us know, and we’d be happy to support you.

 

- Please note that HS codes are universal only up to the first 6 digits. From the 7th digit onward, codes vary by country. The HS code on your commercial invoice applies specifically to your country, not ours.
For accurate customs clearance, please select the appropriate 10-digit code under the globally standardized 6-digit HS code.
Let me know if you need further assistance.

 

[Tariff Disputes with U.S. Customs]
- Since tariff classification determines the effective rate of duty, it is common for disputes to arise between Customs and importers over which classification applies.  Customs holds a mandate to protect the revenue of the Treasury - which means that the agency may tend to disagree with an importer’s classification decisions.
- Should such a disagreement arise, the provisions of 19 U.S.C. § 1592 (the Customs fraud and negligence statute) may allow the government to "claw-back" duties over a period of 5 prior years of prior imports and to impose harsh civil penalties, and interest charges against all of them.

 

 

[How Classification Errors Lead to Customs Delays: A Guide for Importers]

- Picture a situation where two shipments carrying the same electronics are making their way to the same destination. One shipment reaches its final country right on time, and its content is breezing through customs without any hassle. While the other encounters a series of hurdles along the way, such as inspections, delays, and hefty penalties.
So, what makes these shipments different? It all comes down to a seemingly minute detail: their customs classification.
In international trade, customs classification plays a crucial role, influencing everything from import duties to regulatory compliance. A minor mishap can cause severe consequences.

- Customs classification is a process of assigning classification codes to the goods imported into a country, specifying what is contained in the shipment.

The customs classification plays an important role in calculating how much import duties and tariffs businesses will have to pay.

 

How do classification errors cause customs delays while importing?

Classification errors can cause customs delays in the following ways:

Customs review and reclassification
Customs officials need to examine goods closely to ensure that they are classified accurately, which could include physical examination or reaching out to experts for consultation.
If they find any Hs code classification errors, they may require importers to submit additional documents, such as certificates of origin or technical documents. Additionally, importers will also have to reclassify their goods accurately.
Inspecting and reclassifying goods can take some time, which might result in customs delays. This process often requires back-and-forth communication between importers and customs authorities, further delaying the process.

 

Fines and penalties
The importers might encounter financial penalties if customs authorities find a classification error while inspecting. These penalties can vary in severity based on the type of error and the revenue the government lost due to this error.
Along with fines, authorities may also impose interest charges on any unpaid duties or taxes, adding to the overall importing costs.

 

 

[ TARIFF CLASSIFICATION - GENERAL BACKGROUND (CBP) ]
When goods are imported into the customs territory of the United States (the fifty states, the District of Columbia and Puerto Rico), they are subject to certain formalities involving the U.S. Bureau of Customs and Border Protection (“CBP”) of the U.S. Department of Homeland Security. In almost all cases, the goods are required to be “entered,” that is, declared to the CBP, and are subject to detention and examination by CBP officers to insure compliance with all laws and regulations enforced and administered by the CBP. The required entry process may take the form of a simple “baggage declaration” (for individuals), or one of the many types of customs “entries,” for consumption, warehousing, or transit. Low value importations may be subject to simplified or informal customs clearance procedures. For example, certain low value mail importations may be declared on a sticker obtainable at post offices whereas importations by individuals that do not exceed their duty free personal exemptions may often be made by an oral declaration to a CBP officer. On the other hand, in most cases involving commercial goods, and some involving non-commercial importations, the importer or his agent must “enter” the goods by filing an electronic or paper “entry” to obtain release of the goods followed by an electronic or paper “entry summary.” As part of the entry process, goods must be “classified” in the Harmonized Tariff Schedule of the United States (“HTSUS”) and their customs value must be determined.

Pursuant to the Customs Modernization Act, it is now the responsibility of the importer of record to use “reasonable care” to “enter,” “classify” and “value” the goods and provide any other information necessary to enable the CBP to assess the correct duties, collect accurate statistics, and determine whether all other applicable legal requirements are met. Classifying goods is important not only for duty purposes, but also to determine whether the goods are subject to quotas, restraints, embargoes or other restrictions. The act of classifying goods requires an importer to be familiar with the HTSUS (and the instrument upon which it is based, the international Harmonized Commodity Description and Coding System). To assist in meeting the reasonable care requirement, importers may request binding administrative rulings from the CBP, or may use the services of an expert in customs law and procedures to assist them. The CBP is responsible for fixing the final classification and valuation of the goods. The CBP performs this in a process called “liquidation of the entry.” This publication explains the classification of goods under the HTSUS.

The classification and valuation of goods is an important part of the importation and entry process. At a minimum, incorrect classification or valuation may lead to delays and increased duties (plus interest). The failure to use reasonable care in either situation may also lead to detention or seizure of the merchandise, and the imposition of civil or criminal penalties.

 

 

 

https://www.wcoomd.org/en/topics/nomenclature/activities-and-programmes/hs_dispute_settlement.aspx

World Customs Organization

 

https://www.customs.go.kr/engportal/cm/cntnts/cntntsView.do?mi=7311&cntntsId=2333

KCS FTA PORTAL

https://www.trade.gov/harmonized-system-hs-codes

Harmonized System (HS) Codes

https://www.tradelawcounsel.com/tariff-classification-disputes

Classification & Tariff Disputes (Customs) — Nakachi Eckhardt & Jacobson

 

https://www.icustoms.ai/blogs/classification-errors-lead-to-customs-delays-guide-for-importers/

Importers Guide to Customs Delays caused by Classification Errors