Customs Broker Exam Review · Chapter 31 -Videl Review On-Demand Webinar Session 9 © Logistics...

Chapter 31 - Videl Review On-Demand Webinar Session 9

© Logistics Training Systems, Inc.

All Rights Reserved 1

LLLLttttssss

Customs Broker Exam ReviewSession Nine

© Logistics Training Systems All Rights Reserved

LLLLttttssss

CLASSIFICATION

Chapter 31

HTSUS


LLLLttttssss

HTSUS

Tab

le o

f C

onte

nts

G R

I (

Sin

gle

Page)

GN

(G

ener

al

Note

s)

22 S

ecti

ons

1 –

99 C

hapte

rs

Index

Annex

es

A –

Countr

y D

esig

nati

ons

B –

Countr

y C

odes

C –

Port

Codes





LLLLttttssss

Introduction

General Rules of Interpretation

Headings and Subheadings

The General Notes

Duty rate columns


LLLLttttssss

General Rule One

“Eo Nominee”

Use headings and legal notes

May have to use other rules

Index, table of contents and chapter titles have no legal

value

GRIOne


LLLLttttssss

Level of Provisions

• Headings– Four digit descriptions

• 1604 Prepared or preserved fish; caviar and caviar substitutes

• Sub-headings– Up to eight digits

• 1604.11 Salmon– 1604.11.20 in oil in air tight containers

• Statistical provisions– The ninth and tenth digits

• 1604.11.20 20 Pink

• 1604.11.20 30 Sockeye

• 1604.11.20 90 Other





LLLLttttssss

Snake Skin Anorak

4203 Articles of apparel and clothing accessories, of leather or of

composition leather:

4203.10 Articles of apparel:

4203.10.2000 Of reptile leather

4203.10.40 Other

Coats and jackets:10 Anoraks

Other30 Men’s & Boy’s

60 Women’s & Girl’s

A) 6201.99.9060

B) 6101.90.9060

C) 6102.90.9030

D) 4203.10.2000

E) 4203.10.4010


LLLLttttssss

General Rule 2

• To be used when you cannot classify with

headings and legal notes

– Unfinished / unassembled goods (GRI 2(a))

– Mixtures (GRI 2(b))

GRITwo


LLLLttttssss

Essential Character

The chief attribute, which strongly marks, or The chief attribute, which strongly marks, or The chief attribute, which strongly marks, or The chief attribute, which strongly marks, or serves to distinguish, what an article is; in general, serves to distinguish, what an article is; in general, serves to distinguish, what an article is; in general, serves to distinguish, what an article is; in general,

no specific character (weight, value, quantity, no specific character (weight, value, quantity, no specific character (weight, value, quantity, no specific character (weight, value, quantity, bulk, etc.) is suffice to identify a product.bulk, etc.) is suffice to identify a product.bulk, etc.) is suffice to identify a product.bulk, etc.) is suffice to identify a product.

Terms are vague, but Customs knows it when it sees it!Terms are vague, but Customs knows it when it sees it!Terms are vague, but Customs knows it when it sees it!Terms are vague, but Customs knows it when it sees it!

Any test questions are very obvious...Any test questions are very obvious...Any test questions are very obvious...Any test questions are very obvious...





LLLLttttssss

Unfinished Goods

Raw materials have no “essential character”

Parts vs. unfinished article

Parts do not take precedence over GRI 1


LLLLttttssss

Unassembled Goods

Must require only simple assembly

No manufacturing process involved

Rule of Entireties


LLLLttttssss

Mixtures and Combinations

Go to GRI 2 (b)

Milk containing Vitamin D0401 Milk and cream

2936 Provitamins and vitamins

Coffee mixed with chicory0901 Coffee

2101 Extracts, essences..





LLLLttttssss

GRI 3

Used for goods that appear to be classifiable in two or more headings

Composite goodsMixturesOther reason

Three parts (A, B & C) that must be applied in order


GRIThree

LLLLttttssss

GRI 3(a)

A description by name is more

specific than a description by class

A description that more clearly

identifies a product is more specific than one that is less complete

Goods should be classified in the heading that provides the most specific description.


LLLLttttssss

GRI 3 (b)

Mixtures and Mixtures and composite goodsMixed goods

Composite goods of

different materials

Composite goods of

different componentsSets© Logistics Training Systems

All Rights Reserved




LLLLttttssss

Exceptions to 3 (b)


Textiles and alloys use weight controlYou need to classify by textile or base metal that predominates by weightWatch for percentage that is higher but weight might be less

A shirt may be 60% poly and 40% cotton but the cotton may

weigh more and the shirt considered as cotton

LLLLttttssss

Sets


At least two different articles classifiable in two different headings

Put up together to meet a particular need or activity

In a manner suitable for sale directly to users

Look, there’s essential character peeking

through...

LLLLttttssss

Set Example


Spaghetti MealUncooked spaghetti – 19.02Grated cheese – 04.06Canned tomato sauce – 21.03Put up in a carton

Classified in heading 19.02 - Spaghetti




LLLLttttssss

Haircutting set

Electric clippers 85.10

Comb 96.15

Scissors 82.13

Brush 96.03

Towels 63.02

Case 42.02

Classified in 85.10Classified in 85.10Classified in 85.10Classified in 85.10© Logistics Training Systems

All Rights Reserved

LLLLttttssss

NOT a set


Drill, saw, light

packaged with one battery

Set of glassware

Gift set:Cans of shrimp, pate de foie, cheese, cocktail sausages, crackers

LLLLttttssss

GRI 3 (c)


Goods should be classified under the heading that occurs last in numerical order from those that

equally merit consideration if the goods cannot be classified by reference to 3(a) or 3(b)

Oats (1003) and barley (1004) if equally mixed

would be classified 1004

Peas (0708) and carrots (0706) if equally mixed would be classified in 0708




LLLLttttssss

Hot/Cold Water Dispenser

Other machinery, plant or equipment:Designed for cooling:

For Food and beverages8419.89.9540 Other

8516.10.0080 Electric instantaneous or storage water heaters and immersion

heaters – Other water heaters and immersion heaters

The dispenser could fall equally under either of these provisions. Applying GRI 3 (c), puts it correctly under heading 8516 as it

occurs last in numerical order.


LLLLttttssss

Reviewing GRI 3

�GRI 3 (a)

�Heading that provides the most specific description

�GRI 3 (b)

�Mixtures, composite, sets and essential

character

�GRI 3 (c)

�Equally into two or more provisions


LLLLttttssss

GRI 4 Similitude


Similitude or kinshipOr

What is it most like

Dough figurines from PeruNot in HTS

Looks like porcelainClassified as porcelainWine coolers




LLLLttttssss

Wine Coolers

• GRI 1

– Not beer

– Not wine or wine flavored with plants or

aromatic substances

– Not a fermented beverage or distilled spirits

– Not fruit juice as it has alcohol

On to GRI 2© Logistics Training Systems

All Rights Reserved

LLLLttttssss

Wine Coolers

• GRI 2

– Not 2 (a) as it is not incomplete or unassembled

– 2 (b) applies as it is a mixture, so

We go to GRI 3


LLLLttttssss

Wine Coolers

• GRI 3

– 3 (a) requires the application of 3 (b)

– 3 (b) is not applicable as “essential character”

can not be determined

– 3 (c) not applicable because none of the

headings in Chapter 22 merited consideration

So, on to GRI 4





LLLLttttssss

Wine Coolers

• GRI 4

– We have lift off...

– Most akin or similar to fermented beverages

such as cider

– Classified in 2206.00.9000, Other fermented

beverages


LLLLttttssss

GRI 5(a)


Camera cases, violin cases, medical instrument cases

Designed to hold a specific item

Suitable for long term use

Normally sold with the article

Enters with the article

Entered with same classification as the

article

LLLLttttssss

GRI 5(b)


Moyer’sRoastedBlend

Packing materials and containers

Classified with the article contained therein

Unless…




LLLLttttssss

GRI 5 (b)


Unless they are substantial and reusable

Toothpicks in a silver holder

Elvis Presley Bourbon Bottle

Wine decanter with wine

Then MUST be classified SEPERATELY!

LLLLttttssss

To summarize

• GRI 5 (a)

– Case is made to fit the product

• GRI 5 (b)

– Normal packing material

• Classify with the product

– Package is substantial and reusable

• Classify separately


LLLLttttssss

GRI 6

• All we have mentioned are headings

• Expands the GRI’s to sub-headings

• Mutatis mutandis (or with necessary changes)

– “When...goods are, prima facie, classifiable

under two or more headings...”

– Change “headings” to “subheadings”





LLLLttttssss

Comparing provisions

• Must compare at same level– Four digit heading to four digit heading

– Six digit to six digit under the selected four digit heading

• Measure from the left margin– If same, then they are at the same level

• Always begin comparisons at outer most left margin and proceed inward


LLLLttttssss

Reversible Quilt


The outer shell of one side of the quilt is 50% cotton and 50% polyester. The other side of the outer shell is 80% silk and 20% linen. Both sides of the outer shell are embroidered. The internal filling of the quilt is 100% polyester.

LLLLttttssss

Classifying the quilt

Using GRI 19404 …articles of bedding…

Starting over, we select a 6-digit

heading9404.90 Other (Than mattress supports, mattresses and sleeping bags)

Start over again with 8-digit

subheading:9404.90.85 Quilts…





LLLLttttssss

Continuing on…


Under 9404.90.85 we have more than one that

merits consideration:

9404.90.8505 Outer shell of cotton

9404.90.8522 Outer shell of man-made fibers

9404.90.8536 Outer shell of Other than 85% silk…

LLLLttttssss

Classifying the quilt

As the subheadings under 9404.90.85 have three provisions that merit consideration, we apply the

general rules 1 to 5 pursuant to rule 6

When we get to GRI 3 (c), pursuant to rule 6, we classify the quilt as 9404.90.8536 or the heading

that occurs last in numerical order.


LLLLttttssss

Need to remember…

Use GRI 1 – 5 to select a 4-digit heading

Use GRI 1 – 5, pursuant to GRI 6, again to select a 6-digit heading from under the selected 4-digit heading keeping totally within the indented subheading. Measure to be sure.

Lather, rinse, repeat





LLLLttttssss

Need to remember

4-digit

6-digit

8-digit

Selected 4-digit provision

Ignore!!


LLLLttttssss

Need to remember

4-digit

6-digit

8-digit


Make a selection

Ignoring these


LLLLttttssss

Need to remember

4-digit

6-digit

8-digit



Make a selection

Ignoring these





LLLLttttssss

Need to remember

4-digit

6-digit

8-digit

Never,

NEVER compare

this

heading

With

ANY of these!


Never,

NEVER compare

this

heading

With

ANY of these!

LLLLttttssss

Additional US Rules

Previous rules (GRI 1 – 6) are international. Previous rules (GRI 1 – 6) are international. Everybody uses these..

The United States has added four more to make The United States has added four more to make your life miserable. They apply only to goods entering the U.S.

We now need to look at theseWe now need to look at these


LLLLttttssss

Additional US Rules – 1(a)

• Rule 1(a) – Principal use

– Suitable for use solely or principally with

• Parts suitable for use solely or principally with the engines of heading 8407 or 8408

– An adjective indicating use

• Agricultural hand tools

• Christmas ornaments of glass

How the goods are actually used is not relevant, only How the goods are actually used is not relevant, only the PRINCIPAL use in the United States





LLLLttttssss

Additional US Rules – 1(b)

• US Rule 1(b) – Actual use.– Requires that the article be used in

manner described in HTSUS!• Principal use.

– Reciprocating engines of a kind...

• Actual Use.– ...to be installed in tractors suitable for

agricultural use.

– Requires importer to install in tractors.

– Must provide Customs proof within 3 years.


LLLLttttssss

Additional US Rules – 1(c)

• US Rule 1(c) – Parts

– Solely or principally used as parts of an article

– Parts shall not prevail over “eo nominee” (GRI 1)

8407.32.90 ...engine 8714.19.00 ...parts of motorcycles© Logistics Training Systems

All Rights Reserved

LLLLttttssss

Additional US Rules

• Section XV, Note 5

– Wholly of the base metal which predominates by weight

– Applies to any article of base metal anywhere in the HTS.

• Not limited to Section XV





LLLLttttssss

Additional US Rules – 1(d)

• Section XI, Note 2 and subheading note 2

– Wholly of the textile which predominates by weight

– Limited to Section XI

• Rule 1(d) extends this to any provision that

textiles are named (i.e., headgear in 6504)


LLLLttttssss

6 + 4 rules

1 (a) Principal Use

1 (b) Actual Use

1 (c) Parts

1 (d) Textile by weight


Cla

ssific

atio

n Q

ue

stio

ns

LLLLttttssss © Logistics Training Systems All Rights Reserved

That does it for classification….

…on to Session 10 and Special Trade Programs

Date post:	30-Sep-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Customs Broker Exam Review · Chapter 31 -Videl Review On-Demand Webinar Session 9 © Logistics...

Documents