Benefits of a Binding Ruling

A binding ruling is a useful and often underutilized tool that enables importers and other interested parties to get merchandise classification decisions from CBP that are binding on all future shipments of the product. An importer can also apply for binding rulings on other CBP issues such as marking, origin, NAFTA and applicability of Trade Programs. These rulings are binding in every Customs port of entry in the United States.

The classification, or the Harmonized Tariff System (HTS) code, is used by CBP to assess Customs duties, enforce domestic regulations, perform risk assessment and collect trade statistics. Importers use the code to determine the duties due on imported products. Importers may select an HTS code for their products on their own by using the research tools available to them on the CBP website. However, if there is a question as to the accuracy of the HTS number during an audit, Customs will look to see if the importer used “Reasonable Care” to arrive at the correct code. Though not strictly defined, using the services of a Customs broker, or obtaining a binding ruling generally counts as “Reasonable Care”.

Requesting a binding ruling essentially asks Customs to say whether or not they agree with the classification the importer has chosen. And if Customs accepts the classification, and provides a binding ruling for the product, every port of entry is required to honor that classification. Binding rulings provide uniformity across all ports of entry, and protects the importer from variations in interpretation from current and future CBP personnel.

Applying for a binding ruling is one of the many services C J International offers to our clients. The process may require and investment in time and effort on your part, but the extra effort can provide confidence and uniformity to your risk management program. To request a ruling, we will ask for documentation describing the product in detail and if applicable, a sample.

Please contact C J International if you want to apply for a binding ruling, or to find out if binding ruling is right for your product.

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