Schedule B and HTSUSExport Classification

February 20, 2017 1.TR/03/08 (02/20/17)

2.

Schedule B and HTSUS for Exports

This class is intended to assist in the explanation and understanding of the classification process for goods exporting from the USA and understanding what HTSUS and Schedule B number are.

The USPPI must determine the classification number. Mallory does not determine the classification number for any export shipment.

Mallory may assist the USPPI in classification process by providing US Census and CBP websites and emails.

Contact Compliance with any questions or concerns about classifying a product or a questionable classification number received from a USPPI for an export shipment.

February 20, 2017 TR/03/08 (02/20/17)

3.

What is a Schedule BSchedule B numbers are administered by the Census Bureau, International Trade Management Division

Schedule B is a 10-digit number and is used in the United States to classify physical goods for export to another country.

Schedule B numbers rely on the international Harmonized System (HS) codes for their 4- and 6-digit headings and subheadings. •Will be the same up to the first 6 digits as the importing country's classification code.•Schedule B classification system expands its coverage to statistical descriptions at the 10-digit level.

The international Harmonized System (HS) is administered by the World Customs Organization and serves as the foundation for the import and export classification systems used in the United States. •The World Customs Organization updates the HS System approximately every five years. The year 2012 marked the most recent HS revision, meaning the next

revision will not be due until 2017.

February 20, 2017 TR/03/08 (02/20/17)

4.

What is an HTSUSThe United States (U.S.) import classification system, the Harmonized Tariff Schedule (HTSUS) is administered by the U.S. International Trade Commission (USITC)

HTSUS are 10-digit numbers and may used in the United States to classify physical goods for export to another country.

HTSUS numbers rely on the international Harmonized System (HS) codes for their 4- and 6-digit headings and subheadings. •Will be the same up to the first 6 digits as the importing country's classification code.•HTSUS classification system expands its coverage to statistical descriptions at the 10-digit level.

The international Harmonized System (HS) is administered by the World Customs Organization and serves as the foundation for the import and export classification systems used in the United States. •The World Customs Organization updates the HS System approximately every five years. The year 2012 marked the most recent HS revision, meaning the next

revision will not be due until 2017.

February 20, 2017 TR/03/08 (02/20/17)

5.

Schedule B vs HTSUS

Schedule B

Statistical classification of domestic and foreign commodities exported from the

US

Only for US export classification

Over 9 thousand 10-digit codes

www.Census.gov/scheduleb

HTSUS

Harmonized Tariff Schedule of the US annotated for statistical reporting

Primarily for US import classification; permitted for US export classification for

statistical purposes

Over 18 thousand 10-digit codes

www.Hts.usitc.gov

February 20, 2017 TR/03/08 (02/20/17)

6.

HS Based Classification Number

0805.10.0045CHAPTER

2 digit heading; rarely changes

HEADING4 digits; could change every 5 years

SUBHEADING6 digits; could change every 5 years

LEGAL8 digits; applies only to HTS; changes vary

STATISTICAL10 digits; could change annually for Schedule B and semiannually for HTSUS

February 20, 2017 TR/03/08 (02/20/17)

7.

Classifying Goods

Note: Determination of the Schedule B or HTSUS must always be done by the USPPI which they must send to Mallory in writing.

Goods should be classified based on their essential character.•Essential character of is the products nature, purpose, or function.

Multiple pieces/parts being shipped together as a kit would have the essential character of the finished product.

The end use of a product should be part of the classification process.

General Rules of Interpretation should be reviewed prior to classifying goods.

When unsure of the classification number a search may be ran on US Census’s and/or CBP’s website.

Essential character for classification purposes is a birdfeeder.

February 20, 2017 TR/03/08 (02/20/17)

8.

Schedule B Classification Assistance• When Schedule B classification assistance is needed:

• First search US Census’s data base, https://uscensus.prod.3ceonline.com/, using a description of the product

• Always review the full description to ensure it correctly describes the product • If unable to determine by the search tool, US Census may be contacted at

eid.scheduleb@census.govExample: Using search to classify an engine.

February 20, 2017 TR/03/08 (02/20/17)

9.

HTSUS Classification Assistance• Customs Rulings Online Search System

(CROSS) is a searchable database of CBP’sclassification rulings from 1989 to the present: http://rulings.cbp.gov/

• Search your product to find rulings on similar products. (see image to the right for an example)

• Always review the description entirely to ensure it describes the product

• When using an HTSUS for exports review the following:

• NOTS LIST-• List of HTS codes not valid for

use on the EEI filing• Accessible from the download

section of the Schedule B webpage

• NOTICE TO EXPORTERS-• List of commodities that must

be reported by Schedule B code

• Located at the beginning of the HTS manual

February 20, 2017 TR/03/08 (02/20/17)

10.

General Rules of Interpretation (GRI)

1. The table of contents, index, and chapter titles offer guidance, but choose the 4-digit heading based on the heading descriptions and section/chapter notes.

2. For unfinished/disassembled goods and for mixtures/combinations:a. Unfinished or disassembled goods are classified as the complete articles as long as they have the same

essential character.b. Mixtures and combinations are classified based on essential character unless the mixture is specifically

referenced.3. For goods that can be classified in two or more headings:

a. Choose the heading with the most specific or detailed description.b. Choose the heading that best describes the essential character.c. If a or b doesn’t narrow down to one heading then choose the last heading in numerical order.

4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most comparable. (this should be used infrequently)

5. In addition to the above, the following apply in respect to the goods mentioned:a. Specially fitted containers such as cases for camera and instruments are not classified when they are shipped

together with the goods.b. Disposable packing material and containers such as bubble wrap and cardboard boxes are not classified when

they are used for packing.6. Choose the 6-digit subheading based on the descriptions and related notes, paying attention to the indented

descriptions.

Note: The above rules are paraphrased. To review the rules in their entirety please visit http://www.usitc.gov/publications/docs/tata/hts/bychapter/1401gn.pdfFebruary 20, 2017 TR/03/08 (02/20/17)

11.

Additional US Rule

Except where specifically noted, the following rules apply:

End use is determined by use in the US immediately prior to export.

Goods that are specifically provided for in the Schedule B must be

classified as such and not as “parts”.

Mixtures of two or more textile materials are classified as the

predominant material by weight, or if that cannot be determined classify as the material covered by the last

heading in numerical order.

February 20, 2017 TR/03/08 (02/20/17)

12.

Definitions for Purpose of the Tariff Schedule

"rate of duty" includes a free rate of duty;

"wholly of", "in part of", and "containing", when used between the description of an article and a material (e.g., "woven fabrics, wholly of cotton"), have the following meanings: •"wholly of" means that the goods are, except for negligible or insignificant quantities of some other material or materials, composed completely of the named material;

•"in part of" or "containing" mean that the goods contain a significant quantity of the named material. With regard to the application of the quantitative concepts specified above, it is intended that the de minimis rule apply.

"headings" refers to the article descriptions and tariff provisions appearing in the schedule at

the first hierarchical level; the term "subheading" refers to any article description or

tariff provision indented thereunder; a reference to "headings" encompasses

subheadings indented thereunder

February 20, 2017 TR/03/08 (02/20/17)

13.

Chapters of Schedule B and HTSUS

There are a total of 98 chapters:• Chapter 1 – 5: Live Animals; Animal Products• Chapter 6 – 14: Vegetable Products• Chapter 15: Animal or Vegetable Fats and Oils and Their Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes• Chapter 16 – 24: Prepared Foodstuffs; Beverages, Spirits, and Vinegar; Tobacco and Manufactured Tabacco Products• Chapter 25 – 27: Mineral Products• Chapter 28 – 38: Products of the Chemical or Allied Industries• Chapter 39 – 40: Plastics and Articles Thereof; Rubber and Articles Thereof• Chapter 41 – 43: Raw Hides and Skins, Leather, Furskins and Articles Thereof• Chapter 44 – 46: Wood and Articles of Wood; Wood Charcoal; Cork and Articles of Cork; Manufactures of Straw; Basketware

and Wickerwork• Chapter 47 – 49: Pulp of Wood, Paper or Paperboard and Articles Thereof• Chapter 50 – 63: Textiles and Textile Articles• Chapter 64 – 67: Footwear, Headgear, Umbrellas, Walking Sticks, Whips, Riding Crops and Parts Thereof; Prepared Feathers and

Articles Made Therewith: Artificial Flowers: Articles of Human Hair

February 20, 2017 TR/03/08 (02/20/17)

14.

Chapters of Schedule B and HTSUS (cont)

• Chapter 68 – 70: Articles of Stone, Plastic, Cement Asbestos, Mica or Similar Materials: Ceramic Products; Glass and Glassware• Chapter 71: Natural or Cultured Pearls, Precious or Semiprecious Stones, Precious Metals and Articles Thereof; Imitation

Jewelry; Coin• Chapter 72 – 83: Base Metals and Articles of Base Metal• Chapter 84 – 85: Machinery and Mechanical Appliances; Electrical Equipment; parts thereof; Sound Recorders and

Reproducers, Television Image and Parts and Accessories of Such Articles.• Chapter 86 – 89: Vehicles, Aircraft, Vessels and Associated Transport Equipment• Chapter 90 – 92: Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or Surgical Instruments and

Apparatus; Clocks and Watches; Musical Instruments; Parts and Accessories Thereof• Chapter 93: Arms and Ammunition; Parts and Accessories Thereof• Chapter 94 – 96: Miscellaneous Manufactured Articles• Chapter 97: Works of Art, Collector’s Pieces and Antiques• Chapter 98: Special Classification Provisions

February 20, 2017 TR/03/08 (02/20/17)