How to Import into the US

Many kinds of goods imported for commercial use may be subject to a quota limit. It is the classification number of the article as identified in the Harmonized Tariff Schedule of the United States and the country of origin that determine whether or not an item is subject to quota requirements. In some cases, the quota is absolute, meaning that once the quota is filled - because the quota has reached its limit for that particular period of time - no additional quantities of that item may be imported until the next open period. Such merchandise must be warehoused or exported. Other quotas are tariff-related, which means that a certain quantity of goods may enter at a low rate of duty, but once that threshold is reached - during a specified period of time - a higher duty rate will be assessed for any additional quantities of that particular imported good. Unlimited quantities of some merchandise subject to tariff-rate quota may, however, enter at over the quota rates.

If you are importing goods for commercial use or resale, it’s a good idea to contact your local port of entry for more specific information.

The Quota program is generally applied only to commercial importations. While the importation of many goods imported under “personal use” quantities are not affected by quota restrictions, there is one exception; made-to-measure suits made in Hong Kong, which are restricted for both personal and commercial use.

The following provides information concerning the importation of a passenger car, truck, trailer, motorcycle, moped, bus, or MPV built to comply with the standards of a country other than the U.S. or Canada.� Importers of motor vehicles must file form HS-7 (available at ports of entry) at the time a vehicle is imported to declare whether the vehicle complies with DOT requirements. As a general rule, a motor vehicle less than 25 years old must comply with all applicable Federal motor vehicle safety standards (FMVSS) to be imported permanently. Vehicles manufactured to meet the FMVSS will have a certification label affixed by the original manufacturer in the area of the driver�s door. To make importation easier, when purchasing a vehicle certified to the U.S. standards abroad, a buyer should have the sales contract verify that the label is attached and present this document at time of importation.

A vehicle without this certification label must be imported as a nonconforming vehicle. In this case, the importer must contract with a Registered Importer (RI) and post a DOT bond for one and a half times the vehicle�s dutiable value. This bond is in addition to the normal Customs entry bond. Copies of the DOT bond and the contract with an RI must be attached to the HS-7 form.
Under the contract, the RI will modify the vehicle to conform to all applicable FMVSS and so certify the vehicle. Before an RI can modify a vehicle, NHTSA must have determined that the vehicle is capable of being modified to comply with the FMVSS. If no determination has been made, the RI must petition NHTSA to determine whether the vehicle is capable of being modified to comply with the FMVSS. If the petitioned vehicle is not substantially similar to a vehicle of the same model year certified for sale in the U.S., this process becomes very complex and costly. A list of vehicles previously determined eligible for importation can be found on the NHTSA web site at http://www.nhtsa.dot.gov/cars/rules/import.
Since the cost of modifying a nonconforming vehicle, or the time required to bring it into conformance, may affect the decision to purchase a vehicle abroad, we strongly recommend discussing these aspects with an RI before buying and shipping a vehicle to the U.S.
For federal regulations concerning vehicle emissions contact the Environmental Protection Agency, Certification and Compliance Division � Imports Program, 2000 Traverwood, Ann Arbor, MI 48105, (734) 214-4100, or http://www.epa.gov/otaq/imports/.
For information regarding registration or operation of a properly imported vehicle in a specific State, we advise you to contact the Department of Motor Vehicles or other appropriate agency in that State since the requirements vary by State.

Save on import brokerage fees by downloading the US Harmonized Tariff Schedule and determining your product’s classification before you import.

The Harmonized Tariff Schedule is broken into two major parts: notes and classification.

The notes portion of the HTS comprises approximately one fourth to one fifth of the Tariff Schedule. It contains rules of classification, details on region-specific trade programs (NAFTA and the CBERA), recognized countries and abbreviations, and a list of recent changes to name a few. For purposes of this article we will focus primarily on the rules of classifications.

Reading the HTS: Chapters

The Harmonized Tariff Schedule is broken into 22 different sections which are further divided into chapters. A good rule to remember is that the tariff is categorized with the most highly processed and refined goods last. That means that raw products such as live animals, lumber, and agricultural products will be found near the front of the tariff while electronics, works of art, medical devices, etc. will be found at the back.

Reading the HTS: Notes

Each chapter of the HTS contains notes on classifying products within that chapter. It is very important to thoroughly review these chapter notes before continuing with the classification process. Often times, these notes will list specific articles that can or can not be classified within that chapter. The notes can contain lists of acceptable definitions, clarifications to chapter headings, and other important information

Reading the HTS: Headings and Subheadings

A Harmonized Tariff Classification is a 10 digit number used to identify a specific product. Here’s a sample from Chapter 82 of the HTS (TOOLS, IMPLEMENTS, CUTLERY, SPOONS AND FORKS, OF BASE METAL; PARTS THEREOF OF BASE METAL)

8201.10.00.00 is a handtool of a kind used in agriculture, horticulture or forestry; and more specifically and spade or shovel.

The first two digits (82) of this classification are a reference to the appropriate chapter. The first four digits combined (8201) comprise the article’s heading within that chapter, while the last six digits (10.00.00) break that heading down into subheadings.

In our example, this product is broken down in the following manner:

Chapter 82:TOOLS, IMPLEMENTS, CUTLERY, SPOONS AND FORKS, OF BASE METAL; PARTS THEREOF OF BASE METAL

Heading 8201: Handtools of the following kinds and base metal parts thereof: spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry

Subheading 8201.10.00.00: Spades and shovels, and parts thereof

Reading the HTS: Unit of Quantity

This is the US Customs acceptable measure of quantity for a product. This measurement must be reflected on your commercial invoice.

Reading the HTS: Rates of Duty.

The Rates of Duty Column determines the amount of duty you will have to pay on an imported product. Typically these rates of duty are expressed in a quantity/cost rate (e.g. $0.04/kg) or as a percentage of the value of the good (e.g. 2.5% of the value).

Notice that the Rate of Duty Column is divided into three interior columns. These columns are interpreted as follows:

General (aka Column 1): The typical rate of duty from the majority of the world’s countries.
Special: Special duty rates assigned to specific countries or import scenarios.
Column 2: The special rate of duty assigned to trade restricted countries. Cuba, North Korea, etc.

Save on import brokerage fees by downloading the US Harmonized Tariff Schedule and determining your product’s classification before you import.

General Rules of Interpretation

The General Rules of Interpretation (GRI’s) outline the method used to determine a product’s classification. They also address special scenarios wherein a final classification may be difficult to determine. The General Rules of Interpretation below have been taken verbatim from the HTS (current as of 11/1/04). Classification of goods in the tariff schedule shall be governed by the following principles:

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:

2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.

3. When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin.

5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character; (b) Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.

Final Note

This article is intended to provide a general understanding of the structure of the Harmonized Tariff Schedule and the method used to determine a product’s classification. By nature of an introductory article, it does not cover special and extenuating circumstances that often arise when determining a product’s final classification. The authors of this article recommend that you consult with a licensed Customs broker or member of the US Customs Service should there be any question as to the classification of your product. As the importer of record for your product, it is your responsibility to ensure that the classification presented to Customs for the import of your shipment is the most accurate and legitimate classification. It is important to understand the process of classifying your product because as the importer of record you can be held ultimately responsible for mistakes made in classification

Importers are expected to pay an import tax on virtually every item they import, but few know how much they owe until their shipments arrive in the US.

Many importers are overcharged by US Customs at the border because they did not purchase a copy of the US Harmonized Tariff Schedule and properly classify their imports.

Import taxes are based on the type of item you are importing and where it’s coming from.

How do I know how much I will owe for my imports?

Import taxes for every item imaginable can be determined using the United States Harmonized Tariff Schedule (HTSUS, USHTS, or HTS for short).

This exceptionally large book breaks down into categories virtually every product and commodity imported into the United States. Each line item contains a ten digit classification number, a product description, and a duty rate. Find your item and apply its rate to calculate what you will owe.

Do I have to classify my item?

Every item that comes into the US must be classified with the Harmonized Tariff Schedule. If you don’t classify your item, US Customs will charge you a fee to do it for you.

Before you let Customs classify your product, remember that import tariffs are the second largest source of revenue next to the IRS.

What are Import Taxes?

Import tax (also known as an import duty or import tariff) is collected by US Customs on every import that comes into the US.

Import taxes are a source of income for the US Government and are a way to restrict or facilitate the import of certain commodities.

There are three primary purposes behind the USHTS:

1. The US Harmonized Tariff Schedule is used to assess import duties and taxes on imports. The US Customs Service is the second largest source of revenue for the US Government, second only to the Internal Revenue Service.

2. The HTS is used to track import and export statistics for the US Department of Census. Each month hundreds of billions of dollars in goods and services are imported and exported from the United States. The Tariff Schedule is designed so that the Federal Government can effectively track the import and export of individual product groups into and out of the United States.

3. Lastly, the USHTS is a tool to enforce the United States political agenda. By raising and lowering duty rates and import restrictions from specific countries or around the world, the United States can exercise a certain amount of economic influence.

You can use the Tariff Schedule to calculate duties and taxes on imports. All imported products must be classified with the HTS before they will be allowed into the United States.

This website gets visitors from all over the world! Presumably, they’re all interested in international trade, import/export, or government compliance, but we don’t know for sure. If you’re visiting us for the first time, or if you’re a regular, please take a moment to share your experiences about your country, importing, exporting and trading in general. We’d love to hear from you!

This month we’ve had visits from Germany, Canada, The United States, France, Belgium, Sweden, Poland, Spain, Brazil, Colombia, The United Kingdom, Great Britain, Australia, Austria, Thailand, Hungary, Italy, The Netherlands, Mongolia, New Zealand, and Venezuala to name just a few!

DE, CA, US, FR, BE, SE, PL, ES, BR, CO, UK, GB, AU, AT, TH, HU, IT, NL, MN, NZ, VE

UN Development Business is an official publication of the Outreach Division of the Department of Public Information of the United Nations. The publication specializes in the dissemination of information on projects in the developing countries and economies in transition, funded by the following multilateral banks: The World Bank, The Inter-American Development Bank, The Caribbean Development Bank, The European Bank for Reconstruction and Development, Asian Development Bank, The African Development Bank, The North American Development Bank, The Nordic Fund and the UN system of organizations. Our publication is officially listed in the guidelines of the World Bank and the Inter-American Development Bank. Due to the prestige of the United Nations and the guaranteed impartiality of our organization, multilateral Banks and individual governments feel very comfortable disseminating information through us rather than the private sector. The information we publish includes procurement notices, monthly operational summaries, approved projects, contract awards, etc. In 2005, our subscribers received information on more than 30 billion USD business opportunities.

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The Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs, in accordance with 22 U.S.C. 2778-2780 of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) (22 C.F.R. Parts 120-130), is charged with controlling the export and temporary import of defense articles and defense services covered by the United States Munitions List (USML). It has among its primary missions (a) taking final action on license applications for defense trade exports and (b) handling matters related to defense trade compliance, enforcement, and reporting.

PMDTC: Political Military Defense Trade Controls

The International Trade Administration (ITA) is the lead unit for trade in the Department of Commerce. It promotes U.S. exports of manufactured goods, nonagricultural commodities and services.

ITA: International Trade Administration

The Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) works to improve foreign market access for U.S. products. FAS operates programs designed to build new markets and improve the competitive position of U.S. agriculture in the global marketplace.

FAS: Foreign Agricultural Service