CUSTOMS COMPLIANCE – CLASSIFICATION & VALUATION

CUSTOMS COMPLIANCE – CLASSIFICATION & VALUATION

 

Due to the complexities around Customs Law, it is our experience that customs duties are generally overlooked by business and considered a tax which cannot be avoided, managed or reduced. Furthermore, many business leave all aspects of customs duty planning to their freight forwarder or customs clearance agent, working on the assumption that all the savings available are achieved on their behalf. It is our experience that this is rarely the case, often due to the lack of knowledge the customs clearance agent has in relation to the importer’s products and supply chain.

 

Import duties, freight costs and other related expenses directly impact the bottom line of your business. Additionally businesses can risk non-compliance and miss the opportunity for duty planning, both of which impact on margins and reduced competitiveness for the business.

 

Through a supply chain review the correct duty position can be ascertained and duty efficiencies identified, in many cases this also includes the opportunity to reclaim overpaid customs duty retrospectively.

 

Additionally we look to complete the review with as little inconvenience to you as possible. The extent to which you can be involved in the process varies and we are flexible to your needs.

 

Review results should include:

• Customs compliance;

• Duty minimisation;

• Management of duty;

• Cash recovery;

• Cash flow improvements;

• Margin improvements;

• Better upstream and downstream supply chain visibility;

• Identification of indirect duty opportunities.

 

 

Classification/Valuation

During a review of a global telecoms equipment supplier, we identified an opportunity in relation to items moving as kits rather than as individual parts.

Following detailed supply chain review and origin rules, the kits could be zero-rated for duty generating a six figure $ saving.

In addition, due to the large number of items in a kit, the Customs entry was reduced from over 50 lines to 1 line.  This streamlined administration enabling redeployment of headcount and reduction of the Customs entry fee charged by the broker.

 

Classification

Following an approach by a manufacturer, we reviewed the classification codes allocated to over 6000 SKU.  The review identified many products which had been incorrectly classified resulting in potential overpayment of customs duty. These SKU have now been reclassified to 3 headings when imported into the US and 3 into the EU.  All of the US imports, and the majority of the EU ones, are now duty free and the client is considering a retrospective duty reclaim.  Additionally, import Customs entries are simplified thus reducing costs and minimising the risk of future errors.