| Classification of Goods |
Upon entry into the commerce of the United States, all goods must be classified according to the statute known as the Harmonized Tariff Schedules of the United States, (the HTSUSA). Classification is a key concept in the administration of the customs laws, and will determine the duty rate and eligibility for special duty provisions.
Proper classification is based on a complete and accurate description of merchandise which it is the importer's legal duty to provide to Customs. Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). Help in interpreting the HTSUS is provided by The Harmonized Commodity Description and Coding System Explanatory Notes (EN) which constitute the official interpretation of the Harmonized System at the international level.
The EN are not legally binding nor dispositive on Customs and Border Protection (CBP), but they provide a commentary on the scope of each heading of the HTSUSA and are used by CBP as a guide to the proper interpretation of the tariff schedules.
There is a long line of cases in the federal courts which further spell out and apply the criteria to be used in classifying imported merchandise. The leading case which is cited is one that reaches back to 1976, the Court of Customs and Patent Appeals case of United States v. Carborundum Co., 536 F.2d 373, (CCPA 1976).
In that case the CCPA explained that in order to determine the class or kind of goods to which a product belongs, courts are to consider "all the pertinent circumstances." (Carborundum Co., 536 F.2d 373, at 377, citing Star-Kist Foods, Inc. v. United States, 45 CCPA 16, C.A.D. 666 (1957)).
In Carborundum, the court stated that:
"Factors which have been considered by courts to be pertinent in determining whether imported merchandise falls within a particular class or kind include the general physical characteristics of the merchandise, the expectation of the ultimate purchasers, the channels, class or kind of trade in which the merchandise moves, the environment of the sale (i.e., accompanying accessories and the manner in which the merchandise is advertised and displayed), the use, if any, in the same manner as the merchandise which defines the class, the economic practicality of so using the import, and the recognition in the trade of this use. Susceptibility, capability, adequacy, or adaptability of the import to the common use of the class is not controlling." Carborundum, Id. (citations omitted).
Classification of goods can be a very complicated matter, as the legions of contested classifications which ended up as litigation in the federal courts can attest. Importers using reasonable care will do due diligence by consulting with knowledgeable customs law consultants or attorneys to ensure that they are in compliance with the law.
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