HTS Classification: You have got to be Joking!

Though sometimes laborious and complicated and in spite of the over-the-top title, the concept of HTS classification is actually quite simple and essential to the success of any trade compliance program. The goal of this publication is to impart some general facts on the topic of HTS classification and prove to the reader that HTS classification does not have to be thought of as a tool to weed out the weak-willed and easily intimidated.

 HTS classification is a means by which every article imported or exported from the United States has a unique number code that not only identifies the product, but also determines the amount of duty and taxes that will be paid when shipping the article.  The Harmonized Tariff Schedule of the United States (HTSUS), a large monstrosity of a book, is the resource used to classify every product from colored fish scales to black mud bar soap.  It is divided up into 22 sections and 99 chapters, with the early chapters covering raw material and the later chapters focusing on complex machinery.

Successful HTS classification is all about perception and knowing how to navigate the trenches, break the pieces apart, and put them back together again.  Classification of an item can be approached the same as a jigsaw puzzle. With puzzles and classification start with the whole, deconstruct the picture, and then forge together in way that will reveal the complete image or unveil the correct answer. What is it?  What are the important components?  Will completion depend on assembling by color, by pattern, or by shape?

With a jigsaw puzzle, one can start with the outer edge and work towards the middle, or group pieces according to color.  With an item to be classified, one can consult explanatory notes, section notes, and chapter notes that will provide insight into Custom’s logic.  The notes will specifically list items that are included or excluded from chapters, define key terms, and provide an in-depth interpretation that will assist in classification.  One can also consult Custom’s Rulings on previously classified articles to obtain insight into the complex mind of CBP.  There are a number of different resources to pull from to reach an accurate conclusion.  The trick is taking the time to consider the resources and include them in the audit trail justifications.  It may begin as a tedious piece by piece process, but it will be worth it in the end.

There is nothing more satisfying than attaching the final piece to the puzzle and seeing a picture constructed out of chaos. It can be the same with classification.  Once the time is taken to deconstruct, rebuild, reinforce with Custom’s resources, and come to the best possible answer, the clues come together to produce the entire picture and thus acquire the correct code.  And what begins as an overwhelming exercise will end in a satisfied accomplishment. 

For more tips on classification or to find out about how Allyn International can assist with your Trade Compliance program, contact sales@allynintl.com for more information.