Trafford Publishing: Principles of Classification: Export & Import

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Principles of Classification: Export & Import

by Clement Key

200 pages; quality trade paperback (softcover); catalogue #03-2708; ISBN 1-4120-2159-6; US$59.95, C$76.00, EUR49.40, £34.23

Avoid exposure to contingent liabilities. In export and import, you are required to maintain records 5 years. This means you can be audited and owe. Reach towards 95% accuracy!

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about the book      about the author      sample excerpts or table of contents      catalogue info

About the Book

This book is written to fill a need for a text which will enable the reader/student to learn the principles of classification. It will help you meet the demanding compliance requirements of export and import classification. Customs and Border Protection expect import classification to be 95% accurate. Bureau of Industry and Security as well as the Bureau of Census expect accuracy in export and import classification.
The Bureau of Industry and Security states that over 50% of export declarations are incorrect. This book will help to remove classification as an error concern.
Import classification hovers overall around 80%. Under the "reasonable care" requirements of Customs, trained and proficient personnel are expected to provide accuracy of 95%. This book will help you to reach a higher compliance level.
Please visit the web page for the author's second book, Principles of Valuation: Export & Import

About the Author

Clement Key has 33 years service with the government. His U.S. Customs Services positions held involved every area of import and export. He completed classification and valuation training through Customs Training Facility at Hofstra University, Long Island (top 25%). In 1980 training was received at Federal Law Enforcement Training Center on Trade Agreements Act of 1979. He completed Operations Analyst Specialist training 1988 at FLETC.
Work positions permitted the broadest experience in trade as well as passenger processing. Positions held exposed him to experience with all commodities. Last position was as Field National Import Specialist. This position required extensive work in writing binding and pre-classification rulings. It furnished the greatest insight on customs compliance in the three main areas, classification, valuation and admissibility. Data analysis training, provides knowledge as to classification methodology and insight into audit assessment. Attended related party transfer price training in Chicago in 1993 and was an instructor to other districts in the Southeast United States. He has "hands on" expertise.
In 1994 he received the Hammer Award signed by Vice President Al Gore for efficiency in government. He received many awards throughout his career.
Since retiring in 1995, he has worked as consultant on compliance projects and as instructor in import and export. His goal is to provide instruction from experience and to encourage global training from high school through continuing education levels. He has written two books on compliance and has a goal of completing eight in a compliance series. From his experience he advises that you "know your merchandise" and acquire all the tools, including training.

Sample Excerpts or Table of Contents

Excerpt 1
Table of Contents
INTERNATIONAL TRADE: Export/Import Classification
Chapter 1
IMPORT PROCEDURES     5
Import Requirements
Arrival of goods     6
Formal vs. Informal Entry
Formal Entry of Goods    7
Other Types of Entry
Classification
Determining Admissibility/Customs Examination of Goods     8
Protest     9
Mail Shipments
Restricted Merchandise
Foreign Assets Control     11
Publications
Ports of Entry     13
Common Errors found on previous Customs audits:
References
Classification Red Flag Indicators     14
General Rules of Interpretation     15
ADDITIONAL U.S. RULES OF INTERPRETATION     16
Chapter 2
INTRODUCTION - CLASSIFICATION 17
Harmonized Commodity Description and Coding System History and Development
Customs Regulations Citations
Harmonized System Structure     21
I. TERMS
II. Coding of the Harmonized System     22
III. STRUCTURE OF HS TARIFF
IV. Section and Chapter Notes     24
Chapter 3
Classification     26
I. Introduction
II. GENERAL RULE OF INTERPRETATION NO. 1     27
Exerpt 2
II. GENERAL RULE OF INTERPRETATION NO. 1 (GRI 1) (Very Important RULE*)
THE TITLES OF SECTIONS, CHAPTERS AND SUB-CHAPTERS ARE PROVIDED FOR EASE OF REFERENCE ONLY; FOR LEGAL PURPOSES, CLASSIFICATION SHALL BE DETERMINED ACCORDING TO THE TERMS OF THE HEADINGS AND ANY RELATIVE SECTION OR CHAPTER NOTES AND, PROVIDED SUCH HEADINGS OR NOTES DO NOT OTHERWISE REQUIRE,ACCORDING TO THE FOLLOWING PROVISIONS: [*Know this rule it can take you to 80% rate; estimated it applies TO ABOUT 80% of transactions, overall]
A. Look at this rule closely because it sets out three general concepts.
B. FIRST, the titles of the various sections, chapters, and sub-chapters are provided for ease of reference only.
C. For example:

Section XV reads "Articles of base metal" but does not cover:
a) Appliances and machinery of section XVI
b) Pistols of section XIX
c) Metal furniture of section XX
Chapter 62 - "Articles of apparel and clothing accessories, not knitted or crocheted." BUT: - Heading 6212 covers brassieres, corsets, girdles, garters and similar articles, whether or not knitted or crocheted.

Excerpt 3
APPENDIX I
This part contains explanations to selected examples provided in the text and provides solutions to various questions found in the text. They illustrate the solution process.
Classification questions from customs broker examinations are furnished to practice application of the process. Solutions are provided illustrating the classification process.
Selected pages from the Harmonized Tariff Alphabetical Index, Section Notes, Chapter Notes and Headings are provided. SED and examples of Schedule B are included. These enable you to solve exercises and problems without having the complete tariff or Schedule B. These provide means to reinforce the principles learned.
Classification compliance guidelines are provided to assist you in establishing your internal controls.
Table of Contents of Appendix
Explanations of Text 109 - 124
Classification Questions With Answers 125 - 144
Harmonized Tariff Schedule - Alphabetical Index Selected Pages 146 - 165
     - Section, Chapter Notes, Headings 167 - 182
Classification Compliance Manual Guide 183 - 188
Binding Rulings Guide 189
Shippers Export Declaration 190, 191
Schedule B Selected Pages 192, 193
Excerpt 4
Refer to page 29 for a. - e.
a. Raw Sweet potato - Alphabetical Index - Potato refers to Vegetables; fresh - 0701-0709. Then look up Sweet Potatoes - 0714.20 (see page 194)
b. Raw Persian lamb skins - Alphabetical Index shows Ch. 43. Note 2b says go to Chapter 41
Notes
1. This chapter does not cover:
   (a) Parings or similar waste, of raw hides or skins (heading 0511);
   (b) Birdskins or parts of birdskins, with their feathers or down, of heading 0505 or 6701; or
   (c) Hides or skins, with the hair or wool on, raw, tanned or dressed (chapter 43); the following are, however, to be classified in chapter 41, namely, raw hides and skins with the hair or wool on, of bovine animals (including buffalo), of equine animals, of sheep or lambs (except Astrakhan, Broadtail, Caracul, Persian or similar lambs, Indian, Chinese, Mongolian or Tibetan lambs), of goats or kids (except Yemen, Mongolian or Tibetan goats and kids), of swine (including peccary), of chamois, of gazelle, of reindeer, of elk, of deer, of roebucks or of dogs.
[4301 - It would appear that chapter 41 covers the goods but legal note 1 of chapter 41 excludes lamb skins from Persian lambs]
Excerpt 5

Which of the following statements does NOT correctly describe the function of section and chapter notes in the HTSUS?
A) Section and chapter notes define the scope or limits of a heading or subheading.
B) Section and chapter notes provide lists of goods excluded from inclusion in a particular section, chapter, heading, or subheading.
C) Section and chapter notes have the same legal weight as the headings themselves.
D) Section and chapter notes are usually helpful to the classifier whenever a heading or subheading in the applicable section or chapter is being considered.
E) Section and chapter notes have the same legal weight as the chapter titles.

Fresh cauliflower, which has not been reduced in size, is exported from Chile on May 12 and imported on June 1st. The broker files the entry on June 6th. What is the correct classification?
A) 0704.10.4000
B) 0710.80.9730
C) 0710.80.7060
D) 0704.10.2000
E) 0712.90.8080

"Fix-It Tool Company" offers its customers a prepackaged starter set of tools. Combined together are twelve screwdrivers of various sizes, a large and small hammer, and three socket wrenches. All the tools are hand-operated and put up in sets for retail sale. What is the proper classification?
A) 8205.40
B) 8205.20
C) 8205.90
D) 8206.00
E) 8204.20

Excerpt 6
1. Ans. E HTS GRI-1 (10/98 CHB Exam)

1. The table of contents, alphabetical index, and titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions:

Solution: ease of reference vs. legal cannot be same. Look up GRI 1 in HS.

Catalogue Information