{"id":3273,"date":"2018-08-01T13:07:55","date_gmt":"2018-08-01T13:07:55","guid":{"rendered":"https:\/\/diaztradelaw.com\/?p=3273"},"modified":"2024-12-05T15:43:36","modified_gmt":"2024-12-05T20:43:36","slug":"get-binding-ruling","status":"publish","type":"post","link":"https:\/\/diaztradelaw.com\/get-binding-ruling\/","title":{"rendered":"Should You Get a Binding Ruling?"},"content":{"rendered":"<p><strong>What is a Binding Ruling?<\/strong><\/p>\n<p>Pursuant to the Customs Modernization Act, when importing merchandise into the U.S., it is now the responsibility of\u00a0the importer of record to use \u201c<a href=\"https:\/\/diaztradelaw.com\/importing\/#p1\">reasonable care<\/a>\u201d to \u201center,\u201d \u201cclassify,\u201d and \u201cvalue\u201d the goods and provide any other information necessary to enable U.S. Customs and Border Protection (CBP) to properly assess duties, collect accurate statistics, and determine whether all other applicable legal requirements are met.<\/p>\n<p>A binding ruing request can be extremely beneficial to importers, because it can provide them with certainty regarding concerns they may have about their merchandise.<!--more--><\/p>\n<p>The binding ruling program enables importers to receive a binding determination from U.S. Customs and Border Protection (\u201cCBP\u201d) on the treatment of goods entering the U.S. \u00a0The ruling program responds to issues including, but not limited to, classification, valuation, and country of origin for certainty prior to importation. \u00a0By obtaining a binding ruling, it demonstrates reasonable care and dedication to remaining compliant with CBP regulations.<\/p>\n<p>A ruling may be requested under Part 177 of the CBP Regulations (<a href=\"https:\/\/www.gpo.gov\/fdsys\/pkg\/CFR-2012-title19-vol2\/xml\/CFR-2012-title19-vol2-part177.xml\">19 C.F.R. Part 177<\/a>) by any person who, as an importer or exporter of merchandise, or otherwise, has a direct and demonstrable interest in the question or questions presented in the ruling request, or by the authorized agent of such person. A &#8220;person&#8221; in this context includes an individual, corporation, partnership, association, or other entity or group.<\/p>\n<p>When goods are imported into the Customs Territory of the United States (the fifty states, the District of Columbia and Puerto Rico), they are subject to certain formalities involving CBP. Goods are typically required to be \u201centered,\u201d that is, declared to CBP, and are subject to detention and examination by Customs officers to insure compliance with all laws and regulations enforced or administered by the CBP. As part of the entry process, goods must be \u201cclassified\u201d (determined where in the U.S. tariff system they fall) and their value must be determined.<\/p>\n<p><strong>What Types of Questions Does CBP Provide Binding Rulings On? <\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/diaztradelaw.com\/importing\/#p3\"><strong><em>Classification<img decoding=\"async\" class=\"lazyload  wp-image-2846 alignright\" src=\"data:image\/svg+xml,%3Csvg%20xmlns%3D%27http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%27%20width%3D%27268%27%20height%3D%27182%27%20viewBox%3D%270%200%20268%20182%27%3E%3Crect%20width%3D%27268%27%20height%3D%27182%27%20fill-opacity%3D%220%22%2F%3E%3C%2Fsvg%3E\" data-orig-src=\"http:\/\/customsandinternationaltradelaw.com\/wp-content\/uploads\/2018\/07\/655-300x204.png\" alt=\"\" width=\"268\" height=\"182\" \/><\/em><\/strong><\/a><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong>The Harmonized Tariff Schedule of the United States (HTS), is the primary resource for determining tariff classifications and deciphering customs duties owed for goods imported into the United States. Experts use the HTS, in conjunction with explanatory notes, general notes, general rules of interpretation, and Customs Binding Rulings to help determine the correct HTS. Correct classification is a part of the importer of records \u201creasonable care\u201d requirement. Penalties for non-compliance can be severe. <a href=\"https:\/\/diaztradelaw.com\/customs-border-protection-issues\/cbp-penalties-cbp-1592-penalty\/\">19 U.S.C. 1592<\/a> is the statute CBP references when issuing penalties for negligence, gross negligence or fraud \u2013 depending on the degree of culpability CBP believes you had at the time of your non-compliance. See additional information on HTS <a href=\"https:\/\/diaztradelaw.com\/crash-course-in-the-harmonized-tariff-schedule-of-the-united-states\/\"><span style=\"display: none;\">Schedule of the united states<\/span>here<\/a>.<\/p>\n<ul>\n<li><strong><em><a href=\"https:\/\/diaztradelaw.com\/importing\/#p4\">Valuation<\/a><\/em><\/strong><\/li>\n<\/ul>\n<p><strong><em>\u00a0<\/em><\/strong>All merchandise imported into the United States is subject to appraisement. The Trade Agreements Act of 1979 (the Act), codified at <a class=\"btnopen2\" href=\"#\">19 U.S.C. 1401a<\/a>, et. seq., sets forth the rules for appraisement of imported merchandise. The Act sets forth six different methods of appraisement, and their order of preference. Under the Act, the preferred method of appraisement is transaction value (which is the price paid or payable). Generally, the appraised value of all merchandise imported into the U.S. is the transaction value of the goods. In the event the merchandise cannot be appraised on the basis of transaction value, the secondary bases are considered in the following order: Transaction Value of Identical Merchandise, Transaction Value of Similar Merchandise, Deductive Value, Computed Value, and lastly, Values if Other Values Cannot be Determined.<\/p>\n<p>It is essential for importers to have a system in place to properly report the correct value of imported merchandise to CBP upon entry. Otherwise, there may be under or overpayment of customs duties to CBP. Diaz Trade Law assists in analyzing valuation methodologies to confirm imports are using a correct valuation upon importation. Penalties for non-compliance can be severe. <a class=\"btnopen2\" href=\"#\">19 U.S.C. 1592<\/a> is the statute CBP references when issuing penalties for negligence, gross negligence or fraud \u2013 depending on the degree of culpability CBP believes you had at the time of your non-compliance.<\/p>\n<ul>\n<li><strong><em><a href=\"https:\/\/diaztradelaw.com\/importing\/#p5\">Country of Origin Determination &amp; Marking <\/a><\/em><\/strong><\/li>\n<\/ul>\n<p><a class=\"btnopen2\" href=\"#\">\u2018\u2018Country of origin\u2019\u2019<\/a> means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the \u2018\u2018country of origin\u2019\u2019 within the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. Country of origin determinations can be extremely complex when an ultimate good is sourced from multiple countries and when ascertaining the correct country of origin to use a duty preference program. CBP regulations must be carefully followed, whether it is based upon a \u201csubstantial transformation\u201d or tariff shift. Diaz Trade Law regularly analyzes and advises clients on how to properly identify and label the correct country of origin in compliance with both CBP and the \u201cMade in USA\u201d rules of the Federal Trade Commission (FTC).<\/p>\n<p><strong>Where Can Applications Be Filed? <\/strong><\/p>\n<p>Under the newly enhanced <a href=\"https:\/\/erulings.cbp.gov\/s\/\">eRulings program<\/a>, the importing community may submit an electronic request for a binding ruling by accessing the new eRulings Template. The template permits the online filing of an electronic binding ruling request directly to the National Commodity Specialist Division (NCSD) of the Office of Regulations and Rulings. The eRulings Template is reserved exclusively for the electronic submission of initial binding ruling requests to the NCSD in New York. You may also submit a paper submission to CBP\u2019s NCSD.<\/p>\n<p><strong>When Are Rulings Issued?<\/strong><\/p>\n<p>The NCSD should issue all such rulings within 30 calendar days of the date of receipt. Some delay may occur if a laboratory report or consultation with another agency is required.\u00a0Rulings that require referral to Headquarters, OR&amp;R, will be issued by mail within 90 days of\u00a0receipt.<\/p>\n<p><strong>What if I Don\u2019t Like My Ruling? <\/strong><\/p>\n<p>With the submission of a binding ruling request, there remains the possibility that the CBP will rule unfavorably. There are important items to consider, PRIOR, to submitting your ruling request:<\/p>\n<ol>\n<li>Have an expert draft the request. Review your ideal outcome, and fight for it in your request. Is it better to submit an item to CBP, and 100% leave it to CBP to decide? Or, it is best to review the item with your expert, come up with your favored outcome and why (base it on other rulings reviewed for example) and have CBP consider your arguments?<\/li>\n<li>Once you have a binding ruling, you must follow the ruling. We\u2019ve heard of companies not liking the ruling received and deciding NOT to follow the ruling. This is a BIG mistake that can lead to penalties. Instead\u2026<\/li>\n<li>If you believe that a ruling letter issued to you is incorrect you have the right to appeal the ruling letter, whether it was issued by the NCSD or CBP\u2019s Headquarters Office. When considering an appeal, note that an expert should be on hand to assist you. All reconsideration requests must explain why the previously issued ruling is incorrect and provide arguments as to why CBP\u2019s application of the law is incorrect.<\/li>\n<\/ol>\n<p><strong>The Importance of Pre-Compliance<\/strong><\/p>\n<p>To avoid potential problems when importing, take steps to ensure compliance. It\u2019s quite easy to start importing, create a company, \u00a0fill out (or have your customs broker fill out) Customs <a class=\"btnopen2\" href=\"#\">Form 5106<\/a> and submit to CBP, get a customs bond, and voila, you\u2019re ready\u2026 or are you? There is a lot of responsibility that falls upon the importer (that the importer may or may not be aware of\u2026 depending on whether they have read a 211 page document titled: \u201c<a class=\"btnopen2\" href=\"#\">A Guide for Commercial Importers<\/a>\u201d \u2013 which I think should be required reading material prior to importing, with a test and all).<\/p>\n<p>As you begin formulating your pre-compliance strategy, it would be wise to have a customs trade expert on your side. That expert should know about CBP\u2019s laws and regulations and how best to assist you in asserting to CBP your story. An expert will discuss with you your options for crafting a personalized Pre-Compliance strategy for future importations.<\/p>\n<p>Diaz Trade Law regularly prepares binding ruling requests for importers to assist them in obtaining the certainty they need to ensure compliance with CBP laws. For more information regarding any questions or concerns regarding your compliance with CBP laws and regulations, contact us today at 305.456-3830 or via email at <a href=\"mailto:info@diaztradelaw.com\">info@diaztradelaw.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is a Binding Ruling? Pursuant to the Customs Modernization Act, when importing merchandise into the U.S., it is now the responsibility of\u00a0the importer of record to use \u201creasonable care\u201d to \u201center,\u201d \u201cclassify,\u201d and \u201cvalue\u201d the goods and provide any other information necessary to enable U.S. Customs and Border Protection (CBP) to properly assess duties, collect accurate statistics, and determine whether all other applicable legal requirements are met. A binding ruing request can be extremely beneficial to importers, because it can provide them with certainty regarding concerns they may have about their merchandise.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,33,32,16],"tags":[509,130,510,511,512,513,424,295,303,514],"class_list":["post-3273","post","type-post","status-publish","format-standard","hentry","category-best-practices","category-customs-broker","category-import","category-cbp","tag-binding-ruling","tag-cbp","tag-classification","tag-country-of-origin","tag-customs-modernization-act","tag-erulings","tag-importing","tag-reasonable-care","tag-u-s-customs-and-border-protection","tag-valuation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Should You Get a Binding Ruling? - Customs &amp; International Trade Law Firm<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/diaztradelaw.com\/get-binding-ruling\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Should You Get a Binding Ruling? - Customs &amp; International Trade Law Firm\" \/>\n<meta property=\"og:description\" content=\"What is a Binding Ruling? Pursuant to the Customs Modernization Act, when importing merchandise into the U.S., it is now the responsibility of\u00a0the importer of record to use \u201creasonable care\u201d to \u201center,\u201d \u201cclassify,\u201d and \u201cvalue\u201d the goods and provide any other information necessary to enable U.S. Customs and Border Protection (CBP) to properly assess duties, collect accurate statistics, and determine whether all other applicable legal requirements are met. 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