CBP Issues Q&As on Conversion to 2007 HTS Schedule
U.S. Customs and Border Protection (CBP) has posted on its website a page entitled"Questions and Answers Regarding the Conversion to the 2007 Harmonized Tariff Schedule of the United States with WCO Updates". Many of the answers shed new light on the transition to the new Harmonized Tariff Schedule of the U.S. that will go into effect on February 3, 2007.
For example, CBP explains that the "grace period" for implementing the new version of the U.S. Harmonized Tariff Schedule will work as follows:
Q: How does the “Grace Period” work, does it mean that both 2006 and 2007 data will be available simultaneously - or just that the filers have an extra 17 days to respond?In addition, the Q&As discuss the effect of the HTS changes on NAFTA blanket Certificates of Origin (COs) for good imported in to the U.S. CBP explains that NAFTA Blanket COs will be handled as follows:
A: The “Grace Period” applies to classification errors related to tariff classification made by the WCO. These could be either the late filing of a rejected entry for correction or a post entry correction for entries filed during the “Grace Period” that were later found to have classification errors.
ACS will only have "active" HTS numbers available in the reference files for processing entry/entry summary transmissions. For example, if a HTS declared on the transmission of an entry summary on February 10, 2007 is for an HTS that expired on February 2, 2007, the transmission will be rejected by ABI/ACS back to the filer without acceptance. Therefore, the Trade MUST utilize an active HTS number at the time of transmission.
If upon subsequent review of the entry summary by the Import or Entry Specialist CBP determines that the HTS successfully used on the February 10th ABI transmission is not the correct HTS and consequently issues either a penalty or formally rejects the entry summary package, this situation may be mitigated/resolved by using this “Grace Period”. This may also be the case if these same errors are discovered during an audit.
The NAFTA product specific rules are being amended to reflect the 2007 HTS. However, they are not likely to be implemented on February 3, 2007 with 2007 HTS. However, because the amended rules do not include any substantive, but are merely re-stated using HS 2007 nomenclature, COs completed using the 2006 rules of origin will be valid for 2007. COs completed prior to implementation will need to continue to reference the 2006 HTS numbers because the product specific rules are directly related to those HTS numbers.Finally, CBP states that importers should have completed all internal classification updates by February 20, 2007. However, CBP advises that if importers experience difficulties in completing their internal classification updates in a timely manner they should work with CBP through their assigned Account Manager.
To avoid confusion, it may be helpful for exporters to include both the old and new HTS on the CO. Once the new rules are issued, CBP may request that an amended CO be presented if there is no reference to the 2007 HTS number.
Please keep in mind that this only pertains to importations into the US and not procedures for importing into Mexico and Canada.
The 2007 version of the HTSUS that will go into effect on February 3, 2007 can be found at the following link: www.usitc.gov/tata/hts/bychapter/index.htm.