What is a Binding Rule?

When goods are imported into the United States, they are subject to certain formalities involving Customs and Border Protection (CBP). Commodities are typically required to be “entered,” or declared to CBP, and are subject to scrutiny by Customs officials to ensure proper compliance on the part of the importer. As a part of this entry process, goods must be “classified” (determined where in the U.S. tariff system they fall) and their value must be determined.

With today’s evolving trade landscape and an expanding and vast array of potential goods, importers can struggle with the proper classification and compliance of their products. As this due diligence, or reasonable care, is the responsibility of the importer, non-compliance can mean costly delays and potential punishments and fees.

The binding ruling program enables importers to receive a determination from U.S. Customs and Border Protection on the treatment of goods entering the U.S. This is extremely valuable to importers because it can provide them with better certainty regarding their products’ classifications. By obtaining a binding ruling, it demonstrates reasonable care and compliance with CBP regulations.

What Can A Binding Ruling Request Cover?

  • Classification

Correct classification is a part of the importer’s reasonable care requirements. These classifications determine a product’s tariff and duty rate and assist in calculating accurate landing costs. While the Harmonized Tariff Schedule is the primary resource for the proper classification of goods, Customs Binding Rulings can be used to determine the correct HTS for a specific commodity.

  • Valuation

Declaring the proper value of goods entering the country is another requirement for importers as all goods entering the United States are subject to appraisal. Often, these valuations are the transaction value of the goods. However, in the event that the transaction value is not able to be the basis for the valuation, CBP binding rulings can assist importers properly declare the value of the product.

  • Country of Origin Determination & Marking

Tariff and duty rates are often based on a product’s country of origin; however, determining the country of origin can become daunting when a good is sourced from multiple countries. Binding rulings can establish a product’s country of origin and proper marking requirements. Importers, in their request for a ruling, can argue for a country of origin determination that allows for preferential duty rates.

Applying for a Binding Ruling:

Applying for a binding ruling is a relatively easy process. Importers can submit a binding ruling request electronically or can mail a letter to the CBP Information Exchange.

However, this is a slow process. Typically, binding decisions are made 30 days after the request.

How Descartes Can Help:

Imported products into the United States have to be classified. Rather than waiting on a binding ruling from CBP, many importers navigate the complex compliance process and make classification determinations on their products.

To make these determinations easier, industry leaders utilize existing binding rulings to assist in their own classifications. Descartes Customs Info™ provides the largest customs ruling database of over 253,000 rulings including 40,000+ Descartes added rulings found on no other electronic database.

Powered by a sizable database of over 6 million reference documents, Descartes Customs Info™ Reference supplies a single access point where companies can access up-to-date information regarding existing duties, binding rulings, and other trade content. Utilizing this information provides the opportunity for substantial savings and increased efficiency in a business' global supply chain.

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