Tariff Classification

Many Importers Pay Excess Duties - Reviews Available on Contingency Basis

Services Offered by Law Offices of Vincent Bowen

     One of the practice's focus areas is uncovering duty overpayments and pursuing duty refunds on behalf of importers (Please refer to Mr. Bowen's Experience page for a complete  listing of major classification disputes and matters).  The systemic problems noted below ensure a large number of undiagnosed cases where importers pay excess duties due to misclassification of their products.  In most cases, there is not the slightest hint of overpayments because the importer is paying the same amount of duties it has paid for years, which fuels the company's perception that its duty payments are a fixed, unalterable cost.

     Due to inattention, a high percentage of U.S. imports are misclassified, often with a duty overpayment.  Exporters' invoice descriptions often omit information that is required to pinpoint the correct tariff category.  On the import side, brokers earn their fees basically by clearing the goods, not by classifying them, a service often treated as a non-remunerable throw-in.  Legally, it is the importer's responsibility to declare the correct tariff classification.  Thus, brokers often have little incentive to spend time (1) trying to extract from the exporter missing information needed to identify correct tariff categories; or (2) researching or obtaining legal guidance on the classification of products whose classification is not readily apparent from a quick read of selected parts of the tariff schedules.

     Classification principles in numerous product areas are in a perpetual state of flux, with constantly changing and evolving interpretations by Customs and the courts routinely impacting what was thought to be established positions.

     Taking all this into account, it is not surprising that imports are routinely misclassified.  The problem is partially acute in areas like finished consumer goods where product lines are modified and turned over on a regular basis -- seemingly slight modification to products can and often do mean the difference between classification in a category carrying a 20 percent duty and one that prescribes duty-free treatment.

     Tariff classifications previewed to identify potential overpayments to Customs and pursue refunds through the appropriate administrative (or when necessary judicial) procedures.  At the client's option, these services are performed on either a contingency basis or straight hourly billing basis. Under contingency fee arrangements, importers learn for free whether they are paying excess duties, and then can pursue potential refunds with the fee based on a percentage of the duty savings -- i.e., no duty savings, no fee.