5 Things to Know About Harmonized Tariff System (HTS) Classification

1. HTS codes are a global tool. The World Customs Organization (WCO) maintains the Harmonized Tariff Description and Coding System (HTS). Over 170 countries participate in WCO’s HTS system. The first six digits of the HTS code identify all items in international trade and are the same for all countries that use the HTS. The last two or four digits are country specific; in the U.S. these last four digits provide the duty rate and balance of trade statistical reporting suffix for the imported goods.

2. As an importer, you are responsible for establishing the correct HTS classifications used on your import entries and/or ISF security filings. This is why it is important to establish that accurate information about your products is reported to CBP and to not completely rely on third parties to guess about your products to provide HTS classifications on your behalf. It is the importer’s responsibility to supply sufficient information about the imported goods so that a customs expert may determine the proper classifications of those goods.

3. You could be paying too much by using the wrong HTS code. The HTS is primarily a classification system to uniformly identify products and secondarily a tariff system on imported goods. Using the wrong HTS will result in an incorrect payment of duties whether too little or too much, this creates an issue for CBP in their revenue collection mission and may result in them issuing penalties for failure to provide correct and accurate information to CBP.

4. If you have been using the wrong HTS codes, it is not too late to fix your mistake and avoid costly fines. If you find out you have been using the wrong HTS code and have been paying too much or too little, you can file a Post-Entry Amendment (PEA) to pay any additional owed duties or to request a refund for overpayment. If the entry has already been liquidated (usually 315 days after entry), an administrative protest can be filed up to 180 days after liquidation of the entry.

HTS codes are not static. Worldwide the HTS is being updated and changed to allow for new product innovations and technology. In addition, governments are evaluating new revenue sources and seeking to balance their trade with other countries. In the U.S. when an HTS code is created, it has an expiration date to allow for updates. Because of this, it is important to constantly ensure that the codes you are using are valid. The correct classification of imported goods is an ongoing project, and the HTS codes used should be reviewed at minimum, on an annual basis.

TRG Launches Low-Cost Web-Based HTS Classification Tool for U.S. Importers

TRG Classify™ is an online classification tool that allows you, the importer of record, to classify your good and attain the 6 and 10 digit tariff codes in a few quick and easy steps. To do this, TRG Classify consolidates your general product description by applying the tariff schedule’s “General Rules of Interpretation” to intuitively provide the user with the exact tariff number needed to calculate correct duties.

Bozeman, MT December 21, 2010

Law requires US importers to declare all products they import by means of the Harmonized Tariff Schedule (HTS) code. The process of identifying the HTS code assigned to a good is referred to as HTS classification. U.S. importers face many key challenges regarding the classification of their imported commodities. TRG Classify™ offers U.S. importers a web based in house solution that is both accurate, affordable, and time efficient. http://www.trgclassify.com

TRG Classify presents a resolution to the following classification problems importers deal with on a day-to-day basis:

□ Overpayment of Customs duty due to inaccurate classification
□ The importer of record’s legal liabilities associated with any misclassification of products even if the HTS Classification is done by a third party
□ Inability to identify business opportunities with countries offering preferential tariff arrangements
□ Shipments delayed at Customs because of improper or untimely product information
□ A need to meet government requirements to participate actively and use diligence in preparing Customs declarations

Designed specifically for the end user, TRG Classify™ takes any product description no matter how it is expressed and delivers the corresponding HTS code and duty rate. TRG is offering this service for a $2 per classification fee and no start up cost! It is available as a stand alone application or as an addition to the company’s Customs entry and ISF self-filing tool, TRG Direct™. http://www.trgclassify.com

About Trade Risk Guaranty (TRG)
Trade Risk Guaranty (TRG) is an import solutions provider. The company provides innovative products and services to companies involved in international trade. Since 1991, TRG has been the leader in providing U.S. Customs bonds direct to importers. The company has also developed a direct filing system, TRG Direct™, for importers to bring entry and Importer Security Filing clearance in-house. TRG also operates a cargo insurance division, TRG Marine™. TRG Marine™ constructs specialty all-risk insurance policies designed specifically for companies operating in a global environment.

Contact:

Jena Leary
TRG
Marketing Director
jleary@trgdirect.com
406-922-6553