Export Commodity Classification
Articles,  Blog

Export Commodity Classification

Doug Barry February 23, 2011 2:00 pm ET Coordinator:
Thank you for standing by. For today’s conference, all
parties will be on listen-only. During the question-and-answer
session, please press star 1 if you would like
to ask a question. You will be prompted
to record your name. Please unmute your phone
and record your name clearly in order to be introduced
into the conference. Today’s call is being recorded. If you have any objections,
you may disconnect at this time and I will now turn today’s
call over to Mr. Doug Barry. Sir, you may begin. Doug Barry: Thank you very
much and good afternoon or good morning on
the West Coast. Thank you so much for joining
us this afternoon and morning for I think what is going to be an extremely
worthwhile hour for you. The topic today is Export
Commodity Classification and we will start in just
a moment but first a couple of messages and a ground rule. Message, this is part of the Obama administration’s
National Export Initiative and this is our effort
to encourage the doubling of U.S. exports in
the next five years. And so we really want to thank
you for what you’re doing out there to generate
those exports. It’s a great time. The world economy is snapping
back and hopefully that’s going to be reflected in your order
books soon and as it is, we fully expect to put more of our fellow citizens
back to work. It’s really a great time, an
exciting time and we’re glad that you’re joining us today
to participate in the series. Now at the bottom in that first
slide there you’ll see a URL for all of the Webinars that
are coming up over the next two or three months and we welcome
you to take a look at those when you have a moment
and sign-up for more. I think you’ll find
that this curriculum that we have put together is
going to be extremely helpful and useful for you as you
grow your exports even further entering into new markets and
finding new buyers with the help of the Department of Commerce
and the U.S. Commercial Service. And the program for today is in just a moment I will
introduce our speaker and then at the end of the session
towards the end of the hour, we’ll have about 15 minutes
for questions and answers. These will be live questions. You’ll take your
phone off of mute. The operator will come
back on and introduce you and then we will be able
to take your question and Tony will answer. Now we have a very large
number of participants today, close to a thousand and so
we can’t obviously take all of your questions or we’d be
here until the end of the year but we do want you to
e-mail the presenter after the session today
with your specific questions about your specific
products and business and Tony will give
you a personal reply to every question that you have. And that I think will be an
extremely valuable service for you. Now here is export.gov. This is the homepage. You may have seen it before. If not, go to www.export.gov when you have a moment
later today or in the future and you’ll be able to see this
great amount of information that we have here
for your company to help you generate
additional exports. And there’s the Webinar
tab as you’ll see over on the right side. If you click on that, it
will take you to a page. You can find the free Basic
Guide to Exporting Webinars of which today’s event is
part of and you can register for additional programs
at that time. And so I would like
very much now to introduce our special guest. His name is Tony Pu and
he is a Commodity Analyst for the Commodity
Analysis Branch of the U.S. Census Department. Tony, it’s great to
have you with us. Take it away. Tony Pu: Thank you Doug and
good afternoon, everyone. Welcome to the Export Commodity
Classification Webinar. My name is Tony Pu
and I’m the Analyst in the Commodity Analysis Branch
of the Foreign Trade Division at the U.S. Census Bureau. More specifically my
area of expertise is with the transportation-related
commodities on the import side. Today we’ll be discussing the
international harmonized system for commodity classification, export commodity
classification tools and tips, and hopefully answer
any questions or clarify any issues
you may have. In the interest of time,
there’s a few expectations and ground rules. I will not classify any
specific company products. If you do need assistance
with specific products, you’re welcome to
call our call center, e-mail our Commodity
Analysis Branch e-mail, or even e-mail me specifically. I’ll provide the
contact information at the end of the presentation. Once we cover the general
rules of interpretation, you should be able to
classify your goods for export so in the interest of time,
please keep questions general. Thank you for your cooperation. Both the Schedule B and the
HTS USA which is the acronym for Harmonized Tariff System of United States
Annotated are based on the international
harmonized system governed by the World Customs
Organization. The structure of the
harmonized system is broken down into the following: the two-digit level is called
a chapter; the four-digit head, six-digit subheading,
eight-digit legal and 10-digit statistical. The World Customs
Organization sets the standard up to the six-digit
level where U.S. imports and exports match each
other in other countries so the eight-digit level
– the tariff level – is only significant
on the import side. It is established by the United
States trade representative and proclaimed by the President. At the 10-digit level,
this is how we collect the statistical data. This is established
by the Census Bureau for the export side or the United States
International Trade Commission on the import side. Here you can see the top
half is a sample page from the Schedule B book. In the bottom half it’s a
sample page from the HTS or Harmonized Tariff
Schedule book. As we learned 9-4, the first
two numbers denotes the chapter and Chapter 94 is for furniture,
bedding, mattresses, etcetera, lamps and lighting fittings, and NESOI which you’ll
see frequently. NESOI is an acronym for Not
Elsewhere Specified Or Included. When comparing the two, you can
see the four and six-digit codes in descriptions match; however,
at the HTS level it delineates into eight-digit
subheadings and breaks down into more detailed
categories. The eight-digit level is
where the duties are assigned. When looking at the bottom half of the Harmonized
Tariff Schedule book, you can see Column 1
General applies to imports for most countries
from most countries. Column 1 Special addresses
trade agreements like NAFTA, agreements with Singapore,
Oman and Peru and Column 2 shows the rates of
duty for Cuba and North Korea. This is also listed in
the General Notes 3B. Schedule B shows
the code description and required unit of quantity. Now as you can see, the
Schedule B is more general. This is why you cannot
use import numbers to classify exports – this is
why you can use import numbers to classify exports – but it doesn’t work
the same the other way so you cannot export
numbers to classify imports. There are two books, the
Harmonized Tariff Schedule of the United States Annotated
in the Schedule B book. Schedule B is the statistical
classification of domestic and foreign commodities
exported from the United States, has approximately 9000 codes and is revised and/or
produced annually. Revisions are effective
January 1st of every year. For the HTS book, those revisions are done
generally made twice a year so once in January
and once in July. The HTS book is used for
enforcement of duties and quotas whereas the Schedule
B is less specific so it adds to ease the burden
for exporters. And just a quick reminder, in the HTS book there’s
a section called Notice to Exporters and what that is,
it lists out the commodities which you must use the export
code for filing your export and you cannot use the import
code for filing your export. For some freight forwarders and
Custom brokers, you may have to update your number if it’s
outdated from the last year. Revisions are usually
made because members of the trade community are
looking for greater detail in their statistical data. Several tools are
available to you in classifying your products:
general rules of interpretation; the Schedule B Website with
a browse and search function; World Customs Organization
explanatory notes; the Harmonized Tariff System
online reference tool; Customs rulings; and Commodity
Analysis Branch assistance. I will address each
in this presentation. The first tool, general
rules of interpretation. The foundation of the general
rules of interpretation, merchandise must
first be classified in the Harmonized System by the four-digit heading
whose terms most specifically describes the merchandise so only the four-digit
headings are comparable. These are international rules on classification using the
six-digit Harmonized System so even if you think the
specific product you’re looking for is included in a six
or 10-digit description, you can only compare
four-digit headings. Again, first read through
the four-digit headings until you find the area where your product
would be classified. GRI 1, state set. The following are
provided for ease of use. Table of contents,
alphabetical index, section and chapter titles and
to classify according to commodity description using
the headings and related section in chapter notes so
basically GRI 1 is to use the section
in chapter notes. This GRI is used most often. Here we have an example
of GRI 1. This is for chapter notes for
Chapter 1 for live animals. The notes define terms in the
chapter and give definitions for odd units of quantity. They also tell you which
products don’t belong in that chapter even if it
seems that they belong in there and it tells you where those
products should be classified. So for example if you’re
exporting a let’s say circus elephant which as you can
see here, 1C states animals of heading 89508 which
covers traveling circuses and menageries. Those circus elephants
wouldn’t fall under Chapter 1 where you would think
is for live animals. They fall into Chapter
95 because they are used for traveling circuses
and menageries. GRI 2A, articles that are
incomplete or unfinished, unassembled or disassembled are
classified as complete articles. They must have the
essential character of the finished articles
so the essential character of a product is its
nature, purpose or function. An example would be
ceramic statutes. Whether or not they’re
painted or polished, they’re still classified
the same because essentially they’re
still ceramic statutes. Another example would
be unassembled bicycles, even if missing parts
such as pedals or tires, they would still be
classified as bicycles. GRI 2B, mixtures
and combinations. As long as a specific mixture
is not referenced elsewhere, you classify according
to essential character. An example of a mixture that’s
specifically referenced would be frozen mixed vegetables. An example of a mixture that’s
not specifically referenced would be an umbrella hat;
an umbrella worn on head by attached hat which is
essentially an umbrella where as a propeller beanie
hat is essentially a hat. GRI 3 states for products
that can be classified in two or more areas, you classify by
A, the most specific heading. So let’s use a clock radio
for example which will fall under Heading 8527 which
is for reception apparatus for radio broadcasting
whether or not combined in the same housing
with sound recording or reproducing apparatus
or a clock instead of 9105 which is for other clocks. GRI 3B classified by
the essential character so what determines
essential character can vary between different goods
depending on the nature of the materials or the
components, may be the bulk, quantity, weight,
value or volume. So for a paint kit
containing paint, paintbrushes and stencils all
packaged together, the paint provides the
essential character of the kit, not the brushes or the stencils. GRI 3B – I’m sorry, 3C –
states that you classify by the last heading
in numerical order so for example a 50/50
mixture of barley which falls under Heading 1003
and oats which fall under Heading 1004 is all
classified as oats and this is because 1004 is the
last heading of the two. We always go with the higher
number, often referred to as “other” basket category or
NESOI which again is an acronym for Not Elsewhere
Specified Or Included. And a quick reminder,
GRIs are hierarchical in international rules
used by all countries on the Harmonized System. Following these rules ensures that everyone is classifying
goods in the same way. GRI 4, classified
goods according to which they are most akin. This should be used
infrequently. An example would be a
machine that washes car parts. The user opens the door,
puts the parts in, adds soap, closes the door, runs the cycle
and removes the clean parts. Similar to a dishwasher
so therefore classified under the same heading as
dishwashing machines not for domestic use so in
some cases you may need to be creative and flexible. GRI 4 should be used
as a last resort. GRI 5A, specially-fitted
containers are classified with the article except when
the container determines the essential character. An example would
be a violin case. If shipping a violin
with its case, you classify only the violin. Other examples would
be camera cases, cases for musical
instruments, gun cases. An example of an exception
would be crystal candy dishes with hard candies. You classify both because
the essential character of the container is not related
to the object being contained. So these products don’t
necessarily go together. They can be sold,
shipped or used separately or with other items instead. This does not qualify as a kit and therefore cannot be
classified under GRI 3B. Neither component determines
the essential character of the product. GRI 5B, packing materials and containers are
classified with the goods. They must not be suitable
for repetitive use with the exception of medical
containers for a compressed gas which is just an example
that fits as an exception because these containers,
they must be classified because they are reusable so you classify both the
container and the gas. These containers are
specifically accounted for in the Schedule B under
Heading 7311 if it’s made of iron or steel and 7613
if it’s made of aluminum. And finally GRI 6,
classification of goods in the subheading of a heading
shall be determined according to the terms of the subheading,
related subheading notes and section, chapter and
subchapter notes may also apply. So in other words once you have
found your four-digit heading, you repeat the same process to determine your
six-digit subheading so basically this
is the same as GRI 1 but at the subheading level
which is a six-digit level. Here’s an example of
GRI 6 for Chapter 1. At this level, only the
six-digit subheadings are comparable so if you’re
shipping dairy cows, the natural instinct is
to zoom-in on 0102.10.0020 but first you must ask yourself, “Are these purebred
breeding animals?” and a suggestion when
pulling chapters up, I would use the PDF version because sometimes the
indents are not very clear in the HTML version. Additional U.S. rules
of interpretation. These expand on the GRIs
at the national level. Except where specifically noted,
the following rules apply: A, end use is determined by use in the United States
immediately prior to export. So if you’re shipping
pie tins to a country where they will be
used as Frisbees, you still classify them as
pie tins because that is a use in the United States
prior to export. B, parts classifications
shall not prevail over a specific provision
for such parts or accessories so an example would
be aircraft seats. Aircraft seats are specifically
covered under Subheading 9401.10 so they’re not classified
as airplane parts which fall under Chapter 88. C, for a classification of goods in which a textile material
is named follow the principles in Section 11 Note 2
regarding mixtures of two or more textile materials. For more details, read Note 2
of Section 11 in the HTS USA, the Harmonized Tariff Schedule,
United States Annotated. Essentially the note
echoes GRI 3B which is the essential
character and GRI 3C which is the last heading
in the numerical order. Here’s a snapshot
of what you will see when visiting our Webpage. The Web address is
www.census.gov/scheduleb and it takes you directly to the Foreign Trade
Division’s Schedule B page. On this page you
can check to see if a Schedule B number is valid,
browse through the chapters, download the current export
and import codes for use in the Automated Export System and also view obsolete
Schedule B codes back to the last major
revision which was in 2007. This does not apply for HTS
codes which are for imports. When looking at this snapshot,
you can see the second box down, the link under Schedule B search
takes you to an external site where you’ll find our
new enhanced search. Additional tools, World Customs
Organization issues explanatory notes which are available for
purchase through the Website. It consists of five volumes
covering all HS Chapters 1 through 97 providing specific
examples of items that do and do not fall under each
heading and subheading. If it’s something you’re
looking for that’s minor, you may just want to
call our call center because we can just read
you the excerpt in the notes or we can also just scan
you the pertinent pages and send it to you. United States International
Trade Commission provides an HTS online reference tool. This allows you to
search current HTS codes and descriptions. These are organized by heading
and links to Customs rulings. Customs and Border
Protection provides two tools. The first one, the Customs
Rulings Online Search System also called CROSS. The free site allows you to
search every Customs rulings from 1989 to the
present so what you want to do is read the entire
ruling to determine if it closely matches
what you’re shipping. So two important reminders
when using this is one, because this is a
historical database, some of these commodity
codes have expired and two, because these are
Customs rulings, the codes provided
are HTS numbers, not Schedule B. You cannot
put outdated import codes on your export documentation. What I recommend doing is
taking the first six digits of the HTS code and searching or
browsing through the Schedule B to find your current
export code. You can use it as a guide
to narrow your search. And the second tool are the
informed compliance publications which are helpful as a review
of what we go over today. It explains the GRIs in regular
terms and everyday language so I use several of their
examples in this presentation. Provided here is the
contact information for the Commodity
Analysis Branch. If you have any questions,
specific questions, concerns or if you think of any
later on, please feel free to either e-mail us at
[email protected] or call us at 1-800-549-0595,
Option 2, or you can fax us
at 301-763-4347. We’re here to assist exporters
in navigating the book but it is their responsibility
to classify. A reminder, there are no
binding rules on export codes. You can ask for in writing for other countries’
Customs agents are not going to accept our recommendation
as a statistical agency just as United States
Customs has the final say on import classification so during this presentation we
reviewed each of these tools. As you can see here, please note that the Commodity Analysis
Branch assistance is the last option and the reason is because
it is ultimately the exporter’s responsibility to classify their
goods for export so we are here to assist you to
navigate a Schedule B, not to classify all
your products for you so please refrain from
faxing us invoices, catalogs, or lists of product numbers. What I recommend is finding
your Schedule B code in advance so you’re not panicking
last minute but whenever you do
need extra guidance, again please call
our call center and here are some general tips to lessen any unnecessary
stress. There is a commodity code for
every physical tangible good but not every product
has its own code. The Schedule B is
only so specific. You cannot use parts numbers or
ID numbers in the search engine. Read the four-digit headings to determine whether the
product is classified so you classify the
product based on what it is, what it does, or
what it is made of. Refer to the Customs
rulings for guidance. Previous Customs
determinations may point you in the right direction and I
find this tip especially helpful for unique goods and
when appropriate, use NESOI which again is Not
Elsewhere Specified Or Included. If you have any questions
or concerns at a later time, please feel free to contact me. My e-mail is T-O-N-Y
dot P-U at census.gov. Thank you for your
time and attention and are there any questions? Doug Barry: Tony,
thank you very much. Great presentation, very
informative and how did you know that I needed a classification
number for a pie tin throwing
circus elephant? What insight? Only the government would know
such a thing, right, so let me – before we open it up to general
questions, let me sort of jump in here and ask one and,
you know, a lot of people that we talk to every day
are, you know, very worried and maybe understandably so about getting the
classification numbers wrong. But unless it’s intentional,
you know, no one is going to punish you but there are
some, you know, common problems that occur if the product
is classified incorrectly, especially on the
export documents as the items leave the United
States and as they arrive in their foreign destination. What are some of the common
problems that can arise if the product is
classified incorrectly? Tony Pu: Well, if it’s a
minor misclassification, usually you can just go
in and make an amendment to your AES filing and
that should be fine but if it’s something
that’s more, you know, classified completely
incorrectly then that might be subjected
to what Customs does. If that’s something you’re
unsure of, it’s always best to just give us a call and we also have an
Automated Export System branch and also a regulations branch and they can help clarify
information before you ship your product. Doug Barry: Okay and
it is important too for the Customs officials as they examine these shipping
documents, they are looking for the description of the item
from the classification code and this is the way
they determine duties and taxes, right? Tony Pu: Right, well there’s
never any duties when exporting but on the import side for the
country receiving the product, that’s how that’s assessed, yes. Doug Barry: Correct and you
mentioned the AES system and that is the sort
of substitute for the shippers’ export
declaration which is now by law filed online for
exports valued at over $2500. And Tony we just happen to
have a Webinar on how to file in the AES system and I’m
going to refer our listeners and viewers today to the
Website that we provided at the beginning of the
hour which will take you to the whole list of Webinars
that you can register for and you’ll see the one on the
AES system and how to file. And if you have questions
about that of course you can always call
the Trade Information Center at 1-800-USA-TRADE and
we can certainly help with that while you’re
waiting for the Webinar to come up so let’s open the lines
up now for questions. Operator, are you with us? Coordinator: I am. If anyone would like to ask a
question, please press star 1 on your touch-tone phone. Please record your name in order to be introduced
into the conference. I do have one question already and that comes from
Participant 1. Your line is open. Participant 1: Yeah, hi. I have a question. Can you have a different
Schedule B in a USHTS? I have determined
my Schedule B number and I assume it is the
same six-digit number under the USHTS unless there
is a cross-binding ruling for the import side. Tony Pu: Well, obviously
the six-digit level, it should always be
the same unless one of the numbers is outdated. Participant 1: Okay, so
they can’t be different? Tony Pu: No, not up
to the six-digit level but the 10-digit level, it can
be different but there are a lot of instances where
they are the same too. Participant 1: Okay, so
they should always almost be the same? Tony Pu: Not quite. It depends on the commodity because like I mentioned
earlier, there’s about 9000 codes for
Schedule B and the HTS has about double the codes. Participant 1: Okay, thank you. Tony Pu: Sure. Coordinator: And the
next question comes from Participant 2. Your line is open. Participant 2: Hi. It’s actually (Participant
2) and my question is that under Schedule B,
I have several points that the commodity doesn’t
show up like a product for electronics and I have to
choose like a general commodity. Do you guys plan to update the
commodities with the new product or should I just keep
using the generic one? Tony Pu: Can I ask you
which system you are using? Participant 2: The
shipping system is Starship. Tony Pu: Oh, is it through
the freight forwarder or is it the… Participant 2: Through our
warehouse, we have Starship. Tony Pu: Okay, so
that may need updating because if you’re filing through
the Automated Export System the aesdirect.gov, those
should be updated along with the Schedule B book so
if other programs are using in conjunction with the
actual the official program, then a lot of times they
have to update as well. Participant 2: Okay, great. Thank you. Tony Pu: Sure. Coordinator: Next question
is from Participant 3. Your line is open. Participant 3: Hi. I wanted to ask a question
about when to know, when to apply the parts rules and because many finished
products are actually classified as part of the article
so how do you know which, if your finished good is
actually part of the article or is it just when it’s
specified specifically? Tony Pu: Right, so if there’s
a code specific to the part, then you would use that
code so what you want to do is first search for
that part and if it’s not in the Schedule B book,
then you will use the parts and accessories number
to, you know, to the machinery
or apparatus or… Participant 3: So you’ll
use the parts and accessory of that article versus just the
basket provision, just say… Tony Pu: Yeah, you’ll use the
specific parts description unless if there isn’t one,
then you’ll use the parts and accessories because
if the parts and accessories is
the basket category. Participant 3: Okay, and unless
it’s excluded in the general, I mean, in the section
notes, if it’s specifically for that article and it’s
not a part of general use, is that up to our
interpretation? Tony Pu: Yeah, that is and a lot
of the times when it’s specific to its manufactured
specifically for that article, then many of the times it’s
going to just be classified as parts and accessories for
that number, for that article and usually parts and
accessories is a few numbers down so let’s say for
example 8802 is for aircraft, 8803 would be for
parts of aircraft. Participant 3: And then there’s
usually like I work a lot in Chapter 87 – 8716 and 8708
– and there are several parts and accessories categories,
headings. You just find the
most appropriate, I guess or does it… Tony Pu: Right. Participant 3: …okay. Tony Pu: Right. Participant 3: Okay. Thank you. Tony Pu: Sure. Coordinator: Next
up is Participant 4. Your line is open. Participant 4: Hi, Tony. You touched base briefly on kits
and/or combined products such as like my cousin he does
promotional products and so I’m thinking
of gift baskets and things that have combined. Would you just classify
the individual commodities within that kit or basket
or something of that nature? Tony Pu: That’s a
more specific case. It depends on what’s in
the kit if there’s one good that essentially
describes what the kit is. There are certain numbers for
kits but it’s pretty limited and usually kits are I guess
as you said if they’re used for a trade promotion, there
is a number for promotion or products as well so
for that, that can change as no really one
answer for that. Participant 4: Okay. Tony Pu: So yeah, I advise
if you are shipping something in that field then you may just
want to give us a call and see if there is a specific
number for that kit. Participant 4: Okay, perfect. Thank you. Tony Pu: Yeah, sure. Coordinator: The next question
comes from Participant 5. Your line is open. Participant 5: Hi, Tony. My name is Participant 5. I was wondering, is this
presentation available on your Website or is it
downloadable someplace? Doug Barry: I can
answer that, Tony. Yes. Within three or four
days, everyone that registered for the Webinar today will get
a copy of it, the audio as well as the slides which you can
print off at your convenience so the answer is everyone gets
what they’re hearing today and they will receive it
probably early next week. Participant 5: Great, thank you. Doug Barry: You’re welcome. Coordinator: Next question
comes from Participant 6. Your line is open. Participant 6: Hello, Tony. My name’s Participant 6 and I’ve
used the search engine before and I was wondering first of all
is there any way we can search for something based on a name
rather than a commodity code and also is there a way that
we can have a chemical appendix or the CAS numbers as a way for
searching for a commodity code? Tony Pu: Yes, so to
answer your first question, the Schedule B search
only takes general terms. It doesn’t take any brand
names or parts numbers. The Customs rulings Website, the historical database
in many cases does. So in my preference when I’m
helping out someone who just has that information, I like
to use cross-reference between the Customs rulings
and the Schedule B so yeah, so if it’s something that’s
a brand name, you may want to just Google and find out,
get some general terms to use and then use the Schedule
B search and I’m sorry, can you repeat your
second question? Participant 6: No. My second part was regarding
the CAS numbers, the chemicals. Tony Pu: Oh, right. There actually there
is a Website. If you, yeah, since
this is more specific, if you can e-mail me
then I can go ahead and e-mail that link to you… Participant 6: Great. Tony Pu: …because, yes, so
if you have your CAS number, it’s actually pretty easy. Participant 6: Okay. Tony Pu: It’s something
that’s done I believe through the United Kingdom. Participant 6: Oh, really? Tony Pu: Yeah, or I believe if you just Google
ECICS consultation, it’s for the European Commission
Taxation and Customs Union and that’s just something
I use on – when you just – if you know your CAS number,
you can just enter that in and it pops out up to I think
the six or eight-digit level of your Schedule B code. Participant 6: Thank you and
also for Customs rulings, if you have a Customs
ruling that’s, you know, say 10 years old and you know
that there’s been changes, to they automatically
update the commodity code? Tony Pu: No, not in
the database, no. What you can do is when you do
find the one that’s relevant – the code that’s relevant
to yours – you want to look
to the left of it. They have the date of the ruling
and usually if it’s, you know, dated a few years back or a
few years back should be fine but if it’s dated
many years back, it’s definitely either way
you still want to just check with the Harmonized
Tariff Schedule page and their Web address
is hts.usitc.gov and generally it just
changes a little bit so you can kind of
compare the two. Participant 6: Okay,
thank you very much. Tony Pu: Sure. Coordinator: Next question
comes from Participant 7. Your line is open. Participant 7: Hi, how are you? Tony Pu: Hi. Participant 7: I have a question about some jewelry
that we shipped. A lot of our jewelry is
made from silk or fabric. I’d like to know if it has
to be categorized as jewelry or as the textile
that it’s made out of. Tony Pu: So this is a
question of the mixture? It would just depend on what
essentially if it’s more so jewelry, if it’s
more so a fabric. Maybe one of them is higher
is value so it would depend on what exactly and
for your instance, this is more specific
to your good. If you want to give
me more information, I can talk to you individually
either through e-mail or phone. Participant 7: Okay. Tony Pu: All right? Participant 7: Okay, thank
you so much for your time. Tony Pu: Oh, yeah. You’re welcome. Coordinator: Next question
comes from Participant 8. Your line is open. Participant 8: Hi. I wanted to ask, you know, you
mentioned that there’s a number for that trade promotion
section. Do you know what it is? Woman: Promotional part. Tony Pu: Oh, for that? That, yes. If you’d like to e-mail
me or call me as well, I can help you with that too. Participant 8: Okay then. Tony Pu: Because yeah,
that’s not really one number and it also depends on what
exactly you’re shipping. Yeah, so not everything
qualifies for, you know, trade advertising material
and it would be kind of specific to your case. Participant 8: And it
should say there, right? Tony Pu: Yeah. Participant 8: Okay, then. Thank you. Tony Pu: You’re welcome. Participant 8: Bye bye. Coordinator: Next question
comes from Participant 9. Your line is open. Participant 9: Thank
you very much. Question about products that
have been shipped overseas and are coming back for upgrades and then being returned
after being upgraded. Tony Pu: So it’s, okay,
for that – there is under – let me see on Chapter
98 which is for special classification
provisions but that’s only specific
to, yeah, so it’s for under
9801.10.000, it’s for articles that were previously imported
for repair or alteration and the prior to export
from the United States. Participant 9: The export
number would be the same as the original or is there
a different export number for upgraded products
that’s being re-exported? Tony Pu: So let’s see, so this
is being imported for repair or exported for repair? Participant 9: Being
imported for repair. It’s a U.S. product being
brought back into the U.S. for repair and then
being re-exported again. Tony Pu: Okay, so in
that case, you don’t want to use the commodity
number you used prior. You want to use the
Chapter 98 code which again is 98011 followed
by five more zeroes… Participant 9: Thanks. Tony Pu: …so when it’s,
yes, you’re welcome. Coordinator: The next question
I could not understand the first name but the last name
is Participant 10. Place your line in. Participant 10: Hi,
it’s Participant 10 and my question is you
mentioned an AES filing. Can you tell us a little
bit more of what is that and what is it used for? Tony Pu: Sure, the
Automated Export System, it’s just (for) anything
that’s over $2500 or if it needs a license
requires you to file through the Automated
Export System to provide what’s actually
being exported from the country. I don’t want to go too much into
that because I’m not specialized in that section so
there is an AES branch if you want more information or I believe there’s also a
seminar coming up, right, Doug? Doug Barry: Yeah,
that’s correct Tony and the caller can certainly
phone 1-800-USA-TRADE and we’d be happy to explain
the process this afternoon. Okay, operator, next
question, please? Coordinator: And that
comes from Participant 11. Your line is open. Doug Barry: And operator, we
seem to have some background – oh, it’s gone now – okay, great. Coordinator: Yeah,
that was coming from that participant’s line. Doug Barry: All right,
thanks a lot. Coordinator: You’re welcome. Participant 11: Sorry
about that. My question’s kind of
related to the AES part of it. On a (carnet) shipment, if
it’s a foreign (carnet), would you still have to file
or classify the product? Tony Pu: That, I’m
sorry, I’m not too sure. That’s more of a
regulations issue so I suggest that you call either –
yeah, you can either call – it’s best to just
call our call center. It’s 1-800-549-0595 and then you
want Option 3 for regulations. Participant 11: All
right, great, thank you. Tony Pu: And that,
yeah, they can help you. You’re welcome. Coordinator: And if anyone else
would like to ask a question, please press star 1 on
your touch-tone phone and please record
your name in order to be introduced
into the conference. Doug Barry: Great. We’ll wait another minute
for additional calls. Tony, this is a very interesting
exchange here between you and our callers today. Tony Pu: Oh, good, good. Doug Barry: A lot
of good information. Coordinator: I do have a
question from Participant 12. Your line is open. Participant 12: Hi, Tony,
this is Participant 12. Tony Pu: Hi. Participant 12: And I’m calling
in regards to a large machine that is too big to load into
containers so they get broken down and packed within cartons and obviously they
turn into parts. Though we ship this
in the same container, do we classify it still
as the whole machine or since there’s nuts, bolts
and belts, do we classify them on the individual parts? Tony Pu: Correct. You will still classify
as the entire machine because it’s shipped together;
however, if you do ship them in piecemeal, then you may
have to classify them as parts. Participant 12: So only if
it’s separated in the shipment? Tony Pu: Yeah, exactly. Participant 12: Okay. You answered my question. Thank you. Tony Pu: You’re welcome. Doug Barry: It’s a whole
lot easier to classify it because of the function
of the machine rather than the hundred
individual parts, isn’t it? Coordinator: Next up
is Participant 13. Your line is open. Participant 13: Hi,
this is Participant 13. My question for you is we make
a pharmaceutical component that can be used in
several different products and then also it comes in a
couple of different forms, either a powder, a gel, a liquid and what we’re having a hard
time is we’ve found four different classifications
it falls under. Tony Pu: Okay. Participant 13: And so some of
our clients are encouraging us to use other classifications. We’ve stuck with
one up to this point but we’re wondering how do we
determine which is the best one to use because from
my understanding, there’s also tariff
and Customs charges that vary depending
on the code you use? Tony Pu: Right, so this
is on your side you want to choose what you feel based on your knowledge what best
describes your product. Participant 13: Yes. Tony Pu: If it’s your client that maybe wants it different
due to just, you know, tariff issues, that’s something
you may want to discuss with them because at least
on our side, we’re required to report at the best
of our knowledge. Participant 13: Okay,
because the other issue is that sometimes our product is
also used for research purposes and under that classification
that we normally that describes it as a
medicament which is a drug and for research, you can’t
use it for drugs so that’s – we get – so then we’re like
we have the same product that has two different
classifications based on its use. That’s where we, I’m wondering if you can tell me
anything about this? Tony Pu: Yeah, because the
end use is still, yeah, if the end use differs,
you still want to the end use that’s pertinent
to the States in the States. Participant 13: Okay, so it’s
the use – at that point then – it’s the use that
should qualify the code, not the ingredient necessarily? Tony Pu: That depends. If you don’t mind, if you want
to just shoot me an e-mail because this one’s a
little bit more specific… Participant 13: Sure. Tony Pu: …if I can answer,
I can help get someone in regulations to help out too. Participant 13: Okay,
I’d appreciate it. Thank you. Tony Pu: No problem. Coordinator: Next question
comes from Participant 14. Your line is open. Participant 14: Hi. Occasionally we do some
trade shows overseas and so we ship a box full
of our display goods. Also included in that
is some incidental items that might be called, you
know, office supplies or things like that and my question
is for the paperwork, do we have to specify the
smaller incidental items also? Tony Pu: Are those the smaller
– the incidental items – are they less than
$2500 in total? Participant 14: Yes. Tony Pu: Okay, so in that
case, no, unless, yeah, unless if it’s only when
it’s – if it’s less than 2500 but it needs an export license – that’s the only time
you’ll still need to file. Participant 14: Okay, thank you. Tony Pu: Sure. Coordinator: Next question
is from Participant 15. Your line is open. Participant 15: Hello. I have a question
about a specific kit. We had sent in our kit
to the Customs Office to receive an official class
ruling for it and they came back with a ruling that we couldn’t
classify under one HTS code, that it had to be
split-up in two. My question is is some of
our customers are retailers. If we either do online
registration or type-out the form, they only
request one number be used. What is the correct number
we should be supplying them? Are there any general rules? Do you take the part that
has the highest duty? Tony Pu: Yeah, that’s something
I’m not exactly sure of, might have to deal with
regulations as well because you want to use basically what
essentially describes that kit but in some cases if there are,
you know, too-high-valued items in the kit, it may have to be
separate so it kind of depends and if you can also e-mail
me as well, I can discuss it. Participant 15: Okay. Tony Pu: Yeah. Participant 15: Thank you. Tony Pu: You’re welcome. Doug Barry: Time for
one more question. Participant 16: Doug and Tony
maybe, this is Participant 16, is there any specific guidance
for classification of services if service is included as
part of export sales contract? Tony Pu: That’s a good question. Yeah, you only classify
tangible goods so anything you can
actually touch so services are not
classified because yeah, they’re not actually
being traded. Participant 16: Thank you. Doug Barry: And does that also
include computer software, Tony, that is the commodity
classification maybe on the medium on
which it’s shipped, not necessarily the
intangible software? Tony Pu: Exactly, yeah, so just
the actual tangible disk or so but not the intellectual
value, IP value. Doug Barry: Great,
well thank you so much. This has really been
informative. Tony Pu: Sure. Doug Barry: Appreciate you
joining us today and those of you who have questions, feel
free to e-mail them to Tony and he will be happy to answer
them later this week and next. Please do that. He’ll be happy to accommodate
you and get back to you with a personal reply. Want to remind you that this
is the second in a series of 16 Webinars and we hope that
you will check the schedule and go to export.gov and see if
there are other ones that are of interest to you and
register for them accordingly. And then finally this is
the U.S. Commercial Service of the Department of Commerce
and I think we’re best known for our matchmaking
services, that is, our buyer-finding services. We have representatives
in more than 85 countries around the world and I know
that many of you are involved in the logistics part
and the shipping part but if you have colleagues who
are in new business development and want to help your company
generate some new sales outside the United States, please look
at export.gov – www.export.gov – or call us here at the Trade
Information Center Monday through Friday, 1-800-USA-TRADE. So until next week at this same
time and curb your enthusiasm because the next topic is
calculating duties and taxes for whatever country you’re
shipping your goods to and that’ll be next Wednesday,
2:00 Eastern Time and we hope to see many of you for that
Webinar so thanks again for joining us and
for all you do to help the United States grow out of its current economic
difficulties with more exports. We’re doing it. They’re up 18% over last
year, over a trillion and a half dollars being
generated in goods and services from the United States. Let’s double it. Thanks so much and we hope
to see you again soon. All the best. Bye for now. Coordinator: Thank
you for participating in today’s conference. You may disconnect at this time.

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