CHAPTER XVII HARMONIZED TARIFF SCHEDULE OF THE U.S. (HTSUS) Harmonized System Structure of the HTSUS Columns of the HTSUS Commingling of Goods General Rules of Interpretation Types of Customs Duty

Harmonized System Harmonized Commodity Classification & Coding System, in short, Harmonized System (HS) Uniform international tariff nomenclature system Adopted by Customs Cooperation Council (CCC), which was established in 1952 and became World Customs Organization (WCO) in 1994 Obligations of WCO members Undertake to conform the country’s import and export trade nomenclature to the language and numerical code of the Harmonized System Apply general rules of interpretation and section and chapter notes Make import and export statistics publicly available

Harmonized System Structure of Harmonized System Consisting of 97 chapters and 21 sections Covers 5,000 article descriptions Contains General Rules of Interpretation Section Notes Chapter Notes

Structure of Harmonized Tariff Schedule of the U. S. (HTSUS) 99 Chapters and 22 Sections Effective January 1, 1989 in the U.S. by the Omnibus Trade Act of 1988 Chapter 98: Special Classification Provisions Chapter 99: Temporary legislation & modifications Pay attention to the notes of each section and chapter HTSUS is published by U.S. International Trade Commission (USITC) and administered by U.S. Customs & Border Protection (USCBP)

Columns of HTSUS 1) Number Column Heading/Subheading Column 4-digit heading number: General description 8-digit subheading number: Detailed description & rate of duty First two digits indicate chapter number Statistical Suffix: 2-digit statistical reporting number

Columns of HTSUS 2) Article Description Column General description: 4-digit number Detailed description: 8-digit number 3) Unit of Quantity Column Metric Measurement System such as kg, m, l, doz, gross

Columns of HTSUS 4) Rates of Duty Column Column 1: The Normal Trade Relations (NTR) (formerly Most-Favored-Nation, MFN) status conferred by the United States General subcolumn : Rates of duty for imports from the NTR nations not entitled to special tariff treatment Special subcolumn: More generous special rates of duty for special tariff treatment programs of the USA

Rates of Duty Column Column 1 Special subcolumn: Generalized System of Preferences----A, A*, A+ Automotive Products Trade Act------------------B Agreement on Trade in Aircraft-------------------C North American Free Trade Agreement Goods of Canada----------------------CA Goods of Mexico-----------------------MX African Growth & Opportunity Act---------------D Caribbean Basin Economic Recovery Act-------------------------------------------------------E, E* U.S.-Israel Free Trade Agreement----------------IL

Rates of Duty Column Column 1 Special subcolumn (continued) Andean Trade Preference Act------------------J, J* U.S.-Jordan Free Trade Agreement------------JO U.S.-Caribbean Basin Trade Partnership Act----------------------------------------------------------R U.S. – Singapore Free Trade Agreement-----SG U.S. – Chile’ Free Trade Agreement------------CL U.S. – Australia Free Trade Agreement-------AU U.S. – Morocco Free Trade Agreement-------MA Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)------------ P

Rates of Duty Column U.S.-Bahrain Free Trade Agreement-----------BH U.S.-Oman Free Trade Agreement--------------OM U.S.-Peru Trade Promotion Agreement--------PE U.S.-Korea Free Trade Agreement---------------KR U.S.-Colombia Trade Promotion Agreement-CO

Rates of Duty Column Column 2: Non-NTR nations as of 1/1/2011 Cuba, North Korea Latest NTR: Vietnam in December 2001 and Laos in February 2005

Commingling of Goods 8410.30.10 Check valve of copper………………….………….3% Highest rate of duty among commingled components 8410.30.10 Check valve of copper………………….………….3% 8410.30.20 Check valve of iron or steel………………….………….…5% Check valve of copper & iron…?

General Rules of Interpretation Titles of sections, chapters and subchapters are provided for ease of reference only. Most goods can be classified according to language as it appears. (2) Incomplete or unfinished articles that have essential character of complete or finished articles that are unassembled are classified as complete or finished articles

General Rules of Interpretation (3) Goods are described in two or more tariff headings a. Relative specificity-The most specific description 6405.10.00 Shoes with leather……………..10.0% 9021.90.80 Shoes, Orthopedic …………….Free b. Essential character-Mixtures or composite goods of different materials put up for retail sale Gift packages of wine, cheese and pears Kits of fingernail clippers, razor blades, scissors, toothpaste, etc c. Last in numerical order

General Rules of Interpretation (4) Goods that cannot be classified under the above rules shall be classified under the heading appropriate to the goods (5) Cases like camera cases, musical instrument cases or gun cases imported with a specific article designed for shall be classified under the heading of that article (6) Comparisons have to be made at the equivalent level. 8-digit heading to 8-digit heading

General Rules of Interpretation (7) A tariff classification controlled by use is to be determined by the principal use at or prior to the date of importation (8) A tariff classification controlled by the actual use is satisfied only if such use is intended at the time of importation. (9) A specific provision for parts prevail over a provision for parts of an article. 8512.40.40: Windshield wipers, 2.5% 8708.99.49: Parts of motor vehicle, Other, Free

General Rules of Interpretation (10) Mixtures of two or more textile materials per Note 2 of Section XI: Textile products classified as if consisting wholly of that one textile material which predominates by weight over each other single textile material 5007.10.30 Woven fabrics of silk containing 85 percent or more by weight of silk or silk waste---0.8% 5208.11.20 Woven fabrics of cotton containing 85 percent or more by weight of cotton------------------7.0% 6110.30 Sweaters of man-made fibers 6110.30.10: Containing 25% or more by weight of leather-----------------------------------------------------6.0% 6110.30.30: Other------------------------------------32.0%

Types of Customs Duty Ad Valorem Duty According to the value Percentage of entered value Based on FOB price 6105.10.00: Men's or boys' shirts, knitted or crocheted, of cotton--: 19.7% (General, NTR), Free (BH,CA,CL,IL,JO, MX,P,PE,SG), 8% (AU), 45% (Column 2, Non-NTR)), January 1, 2011 Country FOB price Rate Duty NTR $10,000 19.7% $1,970.00 BH---SG $10,000 Free 0.00 AU $10,000 8% $800.00 Non-NTR $10,000 45% $4,500.00

Types of Customs Duty (2) Specific Duty Duty per unit of quantity such as kg or each of imported goods Regardless of price 2008.20.00: Pineapples---0.35¢/kg (General, NTR), Free (A+, AU, BH, CA, CL, D, E, IL, J, JO, MA, MX, OM, P, PE, SG), 4.4¢/kg (Column 2, Non-NTR), January 1, 2011 Country Net Weight Rate Duty NTR 10,000 kgs 0.35¢/kg $35.00 A+---SG 10,000 kgs Free 0.00 Non-NTR 10,000 kgs 4.4¢/kg $440.00

Types of Customs Duty (3) Compound Duty Combined duty of ad valorem duty and specific duty 9614.00.25: Smoking pipes and cigar or cigarette holders of wood or root: 0.4¢ each+ 3.2% (Genera, NTR), Free (A, AU, BH, CA, CL, E, IL, J,JO,MA,MX,OM,P,PE,SG), 5¢ each + 60% (Column 2, Non-NTR) (January 1, 2011) Country Quantity FOB price Rate Duty NTR 2,000 pcs $10,000 0.4¢/ea 8.00 3.2% 320.00 $328.00 A---SG 2,000 pcs $10,000 Free 0.00   Non-NTR 2,000 pcs $10,000 5¢/ea 100.00 60% 6,000.00 $6,100.00

Types of Customs Duty 6203.19.20: Men's or boy’s suits of artificial fibers containing 36% or more by weight wool or fine animal hair– 52.9¢/kg + 21% (General), Free (BH,CA,CL,IL,JO,MA, MX,OM, P,PE,SG), 8% (AU), 52.9¢/kg +58.5% (Column 2 ) (January 1, 2011) 1,000 suits at $50.00 each and 2 kgs each Country Quantity FOB price Rate Duty   NTR 2,000 kgs $50,000 52.9¢/kg 1,058.00 21% 10,500.00 $11,558.00 BH--- SG 2,000 kgs $50,000 Free 0.00 AU 2,000 kgs $50,000 8% $4,000.00 Non-NTR 2,000 kgs $50,000 52.9¢/kg 1,058.00 58.5% 29,250.00 $30,308.00