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What is Tariff Classification? »

What is Tariff Classification?

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What is Tariff Classification?

When importing and exporting commodities in international trade, tariff classification involves putting each and every item to be shipped into categories.  In the United States, commodities that are imported receive their classification number utilizing the harmonized tariff schedule (HTS).  Other countries use their own classification system for tariffs. The department in charge of overseeing tariff classification is Customs and Border Patrol (CBP).

When someone is importing something into a country, they are responsible for classifying each item they bring in using the HTS or other countries’ tariff classification system.  Because tariff classification designates the amount of taxes and customs duties to be paid for every shipment, tariff classification is not a trivial thing.  For this reason, the CBP encourages importers and exporters to exercise care and diligence when classifying.

To verify the declaration of these classification numbers, there are customs authority branches in each country that vigorously review the imported and exported commodities.  These branches of customs authority conduct customs audits to validate that the correct classification has been made.

Not classifying a commodity correctly can have severe consequences. For example, there was a man in Ireland who repetitively declared imported garlic using the tariff classification for apples to avoid a higher import tax. The man was caught when a box labeled apples broke and garlic spilled all over the floor. He was put in jail for six years.

While being put in jail is an extreme consequence, improper tariff classification can also cause your goods to be confiscated until the proper classification is made. In some cases, the goods cannot be recovered.  In light of this, a person or company who imports or exports goods should exhaust all resources to ensure classification is correct.

If you have any questions or need help with tariff classification, please contact us.

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