[Federal Register Volume 80, Number 117 (Thursday, June 18, 2015)]
[Pages 34924-34926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14968]

[[Page 34924]]



U.S. Customs and Border Protection

Notice of Opportunity and Procedures To Request Assistance on 
Tariff Classification and Customs Valuation Treatment by Other Customs 
Administrations Affecting United States Exports

AGENCY: U.S. Customs and Border Protection, Department of Homeland 

ACTION: General notice.


SUMMARY: This document describes opportunities available to U.S. 
exporters to obtain assistance from U.S. Customs and Border Protection 
(CBP) to resolve matters concerning the tariff classification and 
customs valuation applied to U.S. exports by other governments. By 
publication of this notice, CBP invites U.S. exporters to submit 
requests for such assistance.

DATES: June 18, 2015.

ADDRESSES: Requests for assistance may be addressed to U.S. Customs and 
Border Protection, Office of International Trade, Regulations & 
Rulings, Attention: Commercial and Trade Facilitation Division, 90 K 
St. NE., 10th Floor, Washington, DC 20229-1177.

FOR FURTHER INFORMATION CONTACT: For tariff classification matters, 
please contact Jacinto Juarez, Tariff Classification and Marking 
Branch, at (202) 325-0027, or Greg Connor, Tariff Classification and 
Marking Branch, at (202) 325-0025. For matters involving customs 
valuation, please contact Yuliya Gulis, Valuation and Special Programs 
Branch, at (202) 325-0042.



    U.S. Customs and Border Protection (CBP) has direct responsibility 
for enhancing U.S. economic competitiveness through the enforcement of 
the laws of the United States and the fostering of lawful international 
trade and travel. By reducing costs for industry and enforcing trade 
laws against counterfeit, unsafe, and fraudulently imported goods, CBP 
is working to facilitate legitimate trade, contribute to American 
economic prosperity, and protect against risks to public health and 
    As part of CBP's mission to secure and facilitate lawful 
international trade, CBP applies a number of legal requirements to 
goods imported into the customs territory of the United States. In 
almost all cases, imported goods must be ``entered'' (that is, declared 
to CBP), and are subject to detention and examination by CBP officers 
to ensure compliance with all laws and regulations enforced and 
administered by CBP. As part of the entry process, goods must be 
classified under the Harmonized Tariff Schedule of the United States 
(HTSUS) and their customs value must be determined. CBP is responsible 
for fixing the final tariff classification and customs valuation of 
entered goods through a process called ``liquidation.'' In making 
classification and valuation determinations, CBP applies two 
international instruments: The Harmonized Commodity Description Coding 
System (also known as the Harmonized System (HS)), and the Agreement on 
Implementation of Article VII of the General Agreement on Tariffs and 
Trade (GATT) 1994 (also known as the World Trade Organization (WTO) 
Agreement on Customs Valuation or the ``WTO Valuation Agreement''). 
Both international instruments share a similar goal of ensuring, at the 
technical level, a standard or uniform approach to the interpretation 
and application of tariff classification and valuation principles, 

Tariff Classification

    Pursuant to the International Convention on the Harmonized 
Commodity Description and Coding System (the ``HS Convention''), the 
World Customs Organization (WCO) developed the HS. The HS is an 
internationally-standardized product nomenclature used to classify 
traded products by name and number, and is intended to ensure, at the 
technical level, a uniform approach to the interpretation and 
application of tariff classifications. The WCO, established in 1952 as 
the Customs Co-operation Council (CCC), is an independent, 
intergovernmental body whose mission is to enhance the effectiveness 
and efficiency of customs administrations. The United States, along 
with 149 other countries and the European Union, is a contracting party 
to the HS Convention and uses the HS as a basis for its customs tariffs 
and the collection of international trade statistics.
    Subtitle B of title I of the Omnibus Trade and Competitiveness Act 
of 1988 (Sec. 1201, Pub. L. 100-418, 102 Stat. 1147, Aug. 23, 1988 (19 
U.S.C. 3001)) (the Act) provides for the approval and implementation in 
the United States of the tariff classification principles set forth in 
the HS Convention and its associated Harmonized System nomenclature. 
More specifically, the Act provides for congressional approval of U.S. 
accession to the HS Convention (section 1203), enactment of the HTSUS 
(section 1204), and the publication of foreign trade statistics in 
conformity with the HS nomenclature (section 1208). In addition, under 
section 1209, the United States Trade Representative (USTR) is made 
responsible for coordinating trade policy concerning the HS Convention.
    Section 1210 of the Act provides that, subject to the policy 
direction of USTR, the Departments of Treasury and Commerce and the 
United States International Trade Commission (the Commission) shall 
have responsibility for formulating U.S. positions on technical and 
procedural issues relating to tariff classification under the HS 
Convention, and for representing the United States government at the 
WCO with respect thereto.
    To foster international uniformity in tariff classification matters 
under the HS, contracting parties have vested the WCO with 
responsibility for securing uniform interpretation of the HS and its 
periodic updating in light of developments in technology and changes in 
trade patterns. See Article 7 of the HS Convention. The WCO manages 
this process through the Harmonized System Committee (HSC), a committee 
composed of contracting parties to the HS Convention which meets twice 
a year to examine policy matters, take decisions on classification 
questions, settle disputes, and prepare amendments to the HS 
nomenclature and its Explanatory Notes. In accord with procedures 
established by the WCO governing body (the WCO Council), the HSC also 
prepares amendments updating the HS every four to six years.
    On November 10, 1988, the Office of the U.S. Trade Representative 
published in a Federal Register notice procedures to implement sections 
1209 and 1210 of the Act. See 53 FR 45646. Therein, USTR designated the 
Treasury Department, represented at the time by legacy U.S. Customs 
Service (now CBP, as part of the Department of Homeland Security), to 
lead the U.S. delegation at meetings of the HSC at the WCO in Brussels, 
Belgium. Accordingly, Regulations and Rulings, within CBP's Office of 
International Trade, leads U.S. delegations at semi-annual meetings of 
the HSC at the WCO. CBP also serves with the Commission on U.S. 
delegations at meetings of the Harmonized System Review Subcommittee, 
which occur twice per year at the WCO.
    Article 10 of the HS Convention provides that any dispute between 
contracting parties concerning the

[[Page 34925]]

interpretation or application of the HS Convention is to be settled by 
negotiation between the contracting parties to the extent possible. If 
this cannot be accomplished, the parties (that is, the governments 
concerned) are to refer the dispute to the HSC for its consideration 
and recommendations. The HSC, in turn, is to refer irreconcilable 
disputes to the WCO Council for its recommendations.

Customs Valuation

    With respect to customs valuation, the WTO Valuation Agreement 
established a standard system for the valuation of imported goods. The 
WTO Valuation Agreement ensures that determinations of the customs 
value for the application of duty rates to imported goods are applied 
in a neutral and uniform manner, precluding the use of arbitrary or 
fictitious customs values. As one of 160 Members of the WTO, the United 
States uses the Valuation Agreement as the basis for proper customs 
valuation methodology.
    Merchandise imported into the United States is appraised for 
customs purposes in accordance with Section 402 of the Tariff Act of 
1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a) 
(TAA). Consistent with principles set forth in the WTO Valuation 
Agreement, the primary method of appraisement is transaction value, 
which is defined as ``the price actually paid or payable for the 
merchandise when sold for exportation to the United States,'' plus 
amounts for certain statutorily enumerated additions to the extent not 
otherwise included in the price actually paid or payable. See 19 U.S.C. 
1401a(b)(1). When transaction value cannot be applied, then the 
appraised value is determined based on the other valuation methods in 
the order specified in 19 U.S.C. 1401a(a).
    The WTO Valuation Agreement established the Technical Committee on 
Customs Valuation (TCCV), which operates under the auspices of the WCO, 
with a view to ensuring the uniform interpretation and application of 
internationally agreed upon customs valuation principles. The TCCV is 
responsible for the examination of technical problems arising in the 
day-to-day administration of the customs valuation systems of WTO 
Valuation Agreement signatories. In addition, the TCCV renders advisory 
opinions on appropriate solutions based upon the facts presented. The 
TCCV meets twice a year at the WCO to discuss issues concerning the 
interpretation and application of the WTO Valuation Agreement.
    Pursuant to Annex II to the WTO Valuation Agreement, the United 
States has the right to be represented at the TCCV to examine specific 
problems arising from the administration of the customs valuation 
systems of Members. The United States, which currently serves as Chair 
to the TCCV, may nominate one delegate and one or more alternates to be 
its representatives on the TCCV at semi-annual meetings in Brussels. 
CBP represents the United States at the semi-annual meetings of the 
TCCV at the WCO.
    Additionally, under Article 19 of the WTO Valuation Agreement, the 
United States may request consultation with a Member or Members if the 
U.S. considers any benefit to it under the Agreement is being nullified 
or impaired, or that the achievement of any objective of the Agreement 
is being impeded, directly or indirectly, as a result of the actions of 
another Member. Disputes arising under Article 19 of the WTO Valuation 
Agreement may be referred to the TCCV for an examination of any 
questions requiring technical consideration.

CBP Participation at Meetings of the Harmonized System Committee and 
the Technical Committee on Customs Valuation

    Accordingly, at meetings of the HSC and TCCV at the WCO, the United 
States and other customs administrations participate and communicate 
regularly on issues concerning the interpretation and application of 
the HS and the WTO Valuation Agreement. Historically, it has been 
useful for CBP to conduct discussions with other customs 
administrations at the WCO with a view to reaching a common 
understanding and interpretation of these instruments. Such discussions 
can often serve to eliminate or resolve export issues for U.S. traders.
    For example, in 2014 CBP was contacted by a U.S. exporter who 
believed that its textile article was being misclassified by another 
customs administration. The company brought to CBP's attention the 
analysis applicable to the merchandise under published CBP rulings 
available at http://rulings.cbp.gov. The company requested that CBP 
contact the foreign customs administration to resolve the tariff 
classification matter, and if the matter could not be resolved, the 
U.S. company requested that CBP refer the matter to the HSC at the WCO.
    Within 30 days of receiving the technical assistance request, 
attorneys from the Tariff Classification and Marking Branch and import 
specialists from the National Commodity Specialist Division, within the 
Office of Regulations and Rulings (R&R), Office of International Trade 
reviewed the underlying classification issue and determined that the 
foreign customs administration's treatment of the merchandise was 
inconsistent with the proper interpretation of the HS. Following CBP's 
determination of the correct classification of the merchandise, R&R 
attorneys raised the issue bilaterally with the foreign customs 
administration and asked them to consider the matter.
    Following this bilateral exchange, and within seven months of the 
initial technical assistance request, CBP secured a favorable decision 
by the foreign customs administration to classify the merchandise in a 
manner consistent with the U.S. position and as requested by the 
exporter. As a result of CBP's engagement with the foreign customs 
administration, the U.S. company was able to obtain the correct tariff 
treatment of its imported merchandise in the foreign country.

Inquiries Concerning Tariff Classification or Customs Valuation by 
Other Customs Administrations Affecting U.S. Exports

    By publication of this notice, U.S. Customs and Border Protection 
emphasizes that opportunities exist to strengthen communication and 
coordination between industry, CBP, other customs administrations, and 
the WCO to advance the shared goal of facilitating international trade. 
Greater collaboration with industry promotes improved technical 
understanding among contracting parties and helps to foster uniformity 
in the interpretation and application of the HS Convention and WTO 
Valuation Agreement.
    On matters involving non-uniform tariff classification or customs 
valuation treatment by other customs administrations, individual 
parties or firms do not have standing to initiate dispute settlement 
procedures or consultations under the HS Convention or the WTO 
Valuation Agreement. Consequently, for a U.S. individual or firm to 
raise a tariff classification or customs valuation dispute, that party 
must file an inquiry or complaint with the U.S. government and provide, 
or assist in the collection of, any information relating to the matter 
which may be required.
    Accordingly, CBP hereby invites U.S. exporters to file with CBP 
requests for assistance in resolving any tariff classification or 
customs valuation treatment by other customs administrations affecting 
U.S. exports.

[[Page 34926]]

Of course, as a threshold technical matter, in order to provide the 
requested assistance, CBP must agree with the position of the exporter 
with regard to the specific matter brought to CBP's attention.
    CBP will endeavor to provide an initial response to such requests 
within 60 days of their receipt. Thereafter, in cooperation with the 
appropriate agencies, CBP will consider the appropriate course of 
action, including but not limited to the initiation of consultations or 
dispute settlement at meetings of the HSC or TCCV at the WCO. The 
inquirer or complainant will be informed of the progress achieved in 
resolving the matter. Requests for assistance on tariff classification 
or customs valuation treatment by other customs administrations 
affecting U.S. exports should be addressed to U.S. Customs and Border 
Protection, Office of International Trade, Regulations & Rulings, 
Attention: Commercial and Trade Facilitation Division, 90 K St. NE., 
10th Floor, Washington, DC 20229-1177.


    Information submitted by U.S. exporters concerning requests for 
assistance may, in some instances, include confidential commercial or 
financial information, the disclosure of which could result in 
competitive harm to the business submitter. Such information is, 
generally, protected under the provisions of the Freedom of Information 
Act (5 U.S.C. 552) (FOIA), the Privacy Act (5 U.S.C. 552a), and the 
Trade Secrets Act (18 U.S.C. 1905). If confidential treatment is 
requested, submitters should specifically designate the information it 
considers confidential. Such requests will be handled in accordance 
with CBP Regulations (19 CFR 103.35) regarding the protection of such 

    Dated: June 12, 2015.
Brenda B. Smith,
Assistant Commissioner, Office of International Trade.
[FR Doc. 2015-14968 Filed 6-17-15; 8:45 am]