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Customs Broker Exam ReviewSession Nine
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CLASSIFICATION
Chapter 31
HTSUS
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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
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Introduction
General Rules of Interpretation
Headings and Subheadings
The General Notes
Duty rate columns
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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
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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
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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
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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
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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...
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Unfinished Goods
Raw materials have no “essential character”
Parts vs. unfinished article
Parts do not take precedence over GRI 1
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Unassembled Goods
Must require only simple assembly
No manufacturing process involved
Rule of Entireties
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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..
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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
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GRIThree
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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.
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GRI 3 (b)
Mixtures and Mixtures and composite goodsMixed goods
Composite goods of
different materials
Composite goods of
different componentsSets© Logistics Training Systems
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Exceptions to 3 (b)
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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
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Sets
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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...
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Set Example
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Spaghetti MealUncooked spaghetti – 19.02Grated cheese – 04.06Canned tomato sauce – 21.03Put up in a carton
Classified in heading 19.02 - Spaghetti
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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
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NOT a set
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Drill, saw, light
packaged with one battery
Set of glassware
Gift set:Cans of shrimp, pate de foie, cheese, cocktail sausages, crackers
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GRI 3 (c)
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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
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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.
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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
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GRI 4 Similitude
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Similitude or kinshipOr
What is it most like
Dough figurines from PeruNot in HTS
Looks like porcelainClassified as porcelainWine coolers
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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
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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
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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
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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
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GRI 5(a)
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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
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GRI 5(b)
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Moyer’sRoastedBlend
Packing materials and containers
Classified with the article contained therein
Unless…
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GRI 5 (b)
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Unless they are substantial and reusable
Toothpicks in a silver holder
Elvis Presley Bourbon Bottle
Wine decanter with wine
Then MUST be classified SEPERATELY!
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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
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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”
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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
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Reversible Quilt
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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.
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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…
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Continuing on…
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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…
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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.
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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
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Need to remember
4-digit
6-digit
8-digit
Selected 4-digit provision
Ignore!!
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Need to remember
4-digit
6-digit
8-digit
Selected 4-digit provision
Make a selection
Ignoring these
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Need to remember
4-digit
6-digit
8-digit
Selected 4-digit provision
Selected 6-digit provision
Make a selection
Ignoring these
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Need to remember
4-digit
6-digit
8-digit
Never,
NEVER compare
this
heading
With
ANY of these!
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Never,
NEVER compare
this
heading
With
ANY of these!
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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
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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
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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.
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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
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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
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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)
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6 + 4 rules
1 (a) Principal Use
1 (b) Actual Use
1 (c) Parts
1 (d) Textile by weight
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Cla
ssific
atio
n Q
ue
stio
ns
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That does it for classification….
…on to Session 10 and Special Trade Programs