Classifying goods for export or import can be a challenge. In the following article, we will discuss some details about classifying products using the Commodity Control List and the Harmonized System.
Commodity Control List: Unlike the Harmonized System, the Commodity Control List or CCL is designed to identify and distinguish between a relatively small number of export products that are restricted because of foreign policy-anti-terrorism, short supply, military end-use, technology control, and nuclear control reasons. The CCL and US export administration regulations can be found at http://www.bis.doc.gov/policiesandregulations/ear/index.htm.
There are 10 general categories of products that are restricted by the CCL for export purposes. They are:
0) Nuclear materials, facilities, and related equipment,
1) Materials, chemicals, microorganisms, and toxins,
2) Materials processing-c.f. bearings, crucibles and valves,
3) Electronics design development and production,
4) Computers — leading edge technology,
5) Telecommunications and Information security — c.f. satellite communications,
6) Sensors and Lasers,
7) Navigation and Avionics — c.f. accelerometers and gyros,
8 Marine — submarine equipment, and
9) Propulsion for space vehicles and related equipment.
Examples of controlled computers are vector processors, array processors, and digital signal processors under Export Commodity Control Number (ECCN) 4A003. If you are shipping standard consumer goods items such as a standard home computer, wearing apparel, or farming equipment, these are not restricted by the commodity control list. No export license is required and they are classified as EAR99.
Other restrictions you need to rule out are that the end user is not residing in an embargoed country on any restricted end user lists. Shipments to Iran, Syria, North Korea, Cuba, and Rwanda are not allowed unless what you are shipping qualifies for an exception such as food or medical supplies. Also, a number of end users have had US export privileges revoked and appear on a restricted entity lists, the unverified list, the denied persons list, or the Treasury Dept blocked person list. For further details check out the export control basics at http://www.bis.doc.gov/licensing/exportingbasics.htm . You can also call your local freight forwarding export department for assistance. Many large forwarders have well-trained export compliance personnel.
Harmonized System: The Harmonized System as used in the United States is a 10-digit number that identifies products for export and or import. Harmonized numbers for export are identified in schedule B of Title 15 of the Code of Federal Regulations. Schedule B numbers allow the US government to keep statistical data on the items that are exported for trade negotiation purposes. The harmonized tariff schedules of the United States (HTSUS) are the same number system with a more precise set of statistical breakouts. Either Schedule B or HTSUS numbers may be used for export purposes, but only HTSUS numbers may be used for USA import purposes.
Schedule B Assistance: The US Commerce department provides Schedule B classification assistance at https://uscensus.prod.3ceonline.com with a search engine that can be fast and efficient for general products. For example, if you search for “candles,” 3406.00.0000 will pop up immediately. If you search for computers, it will prompt you to identify whether it was portable and weighed less than 10 kgs with the central processor, input and output units in the same housing before assigning a number 8471.41.
US Harmonized System Assistance: The basic instructions for using the harmonized system are called the General Rules of Interpretation (GRI) and can be found athttp://www.usitc.gov/publications/docs/tata/hts/bychapter/1201gn.pdf. The US Customs and Border Protection classification ruling database known as CROSS (http://rulings.cbp.gov) is a very efficient and detailed system that allows you to help you track down the appropriate classification under the HTSUS. In many rulings a thorough background on how the classification is arrived at is provided for the receiver. This information can be very helpful for identifying the classification of similar products.
Using the same example of the hand held computer weighing less than 10 kgs, the CROSS system indicates 8471.30. So, the classifications by HTSUS and Schedule B are not an exact match. You can use the Schedule B system to help you get close to your target classification, but then you need to go to the newest version of the HTSUS (http://www.usitc.gov/tata/hts) to check out the details. You should also check the chapter notes to ensure there are no special instructions about the product you are classifying. Chapter 84 (http://www.usitc.gov/publications/docs/tata/hts/bychapter/1201c84.pdf) –machinery and mechanical appliances and electrical equipment— of the HTSUS includes computers. You will note that a number of items which you might classify as parts of machinery are excluded from this chapter including conveyor belting or articles of leather used in machinery etc.
Commodity Control List: Unlike the Harmonized System, the Commodity Control List or CCL is designed to identify and distinguish between a relatively small number of export products that are restricted because of foreign policy-anti-terrorism, short supply, military end-use, technology control, and nuclear control reasons. The CCL and US export administration regulations can be found at http://www.bis.doc.gov/policiesandregulations/ear/index.htm.
There are 10 general categories of products that are restricted by the CCL for export purposes. They are:
0) Nuclear materials, facilities, and related equipment,
1) Materials, chemicals, microorganisms, and toxins,
2) Materials processing-c.f. bearings, crucibles and valves,
3) Electronics design development and production,
4) Computers — leading edge technology,
5) Telecommunications and Information security — c.f. satellite communications,
6) Sensors and Lasers,
7) Navigation and Avionics — c.f. accelerometers and gyros,
8 Marine — submarine equipment, and
9) Propulsion for space vehicles and related equipment.
Examples of controlled computers are vector processors, array processors, and digital signal processors under Export Commodity Control Number (ECCN) 4A003. If you are shipping standard consumer goods items such as a standard home computer, wearing apparel, or farming equipment, these are not restricted by the commodity control list. No export license is required and they are classified as EAR99.
Other restrictions you need to rule out are that the end user is not residing in an embargoed country on any restricted end user lists. Shipments to Iran, Syria, North Korea, Cuba, and Rwanda are not allowed unless what you are shipping qualifies for an exception such as food or medical supplies. Also, a number of end users have had US export privileges revoked and appear on a restricted entity lists, the unverified list, the denied persons list, or the Treasury Dept blocked person list. For further details check out the export control basics at http://www.bis.doc.gov/licensing/exportingbasics.htm . You can also call your local freight forwarding export department for assistance. Many large forwarders have well-trained export compliance personnel.
Harmonized System: The Harmonized System as used in the United States is a 10-digit number that identifies products for export and or import. Harmonized numbers for export are identified in schedule B of Title 15 of the Code of Federal Regulations. Schedule B numbers allow the US government to keep statistical data on the items that are exported for trade negotiation purposes. The harmonized tariff schedules of the United States (HTSUS) are the same number system with a more precise set of statistical breakouts. Either Schedule B or HTSUS numbers may be used for export purposes, but only HTSUS numbers may be used for USA import purposes.
Schedule B Assistance: The US Commerce department provides Schedule B classification assistance at https://uscensus.prod.3ceonline.com with a search engine that can be fast and efficient for general products. For example, if you search for “candles,” 3406.00.0000 will pop up immediately. If you search for computers, it will prompt you to identify whether it was portable and weighed less than 10 kgs with the central processor, input and output units in the same housing before assigning a number 8471.41.
US Harmonized System Assistance: The basic instructions for using the harmonized system are called the General Rules of Interpretation (GRI) and can be found athttp://www.usitc.gov/publications/docs/tata/hts/bychapter/1201gn.pdf. The US Customs and Border Protection classification ruling database known as CROSS (http://rulings.cbp.gov) is a very efficient and detailed system that allows you to help you track down the appropriate classification under the HTSUS. In many rulings a thorough background on how the classification is arrived at is provided for the receiver. This information can be very helpful for identifying the classification of similar products.
Using the same example of the hand held computer weighing less than 10 kgs, the CROSS system indicates 8471.30. So, the classifications by HTSUS and Schedule B are not an exact match. You can use the Schedule B system to help you get close to your target classification, but then you need to go to the newest version of the HTSUS (http://www.usitc.gov/tata/hts) to check out the details. You should also check the chapter notes to ensure there are no special instructions about the product you are classifying. Chapter 84 (http://www.usitc.gov/publications/docs/tata/hts/bychapter/1201c84.pdf) –machinery and mechanical appliances and electrical equipment— of the HTSUS includes computers. You will note that a number of items which you might classify as parts of machinery are excluded from this chapter including conveyor belting or articles of leather used in machinery etc.
