Upon request by an importer, U.S. Customs & Border Protection (CBP) will issue a binding ruling before of a transaction so the importer will understand how Customs will treat it in advance. There are actually several types of rulings Customs issues, but we are limiting this to what are often called a binding ruling request, ruling letters, prospective rulings, or advance rulings.
What can a binding ruling request cover?
Through binding ruling requests, Customs will answer questions such as:
- How is the merchandise classified?
- What is the country of origin of the merchandise?
- How should country of origin be marked on the merchandise?
- How do I properly declare the value of the merchandise?
- Does the merchandise infringe anyone’s trademark, copyright, or patent?
- Is the merchandise restricted (e.g., drug paraphernalia)?
- Does the merchandise/transaction qualify for drawback?
CBP’s binding rulings requests can also cover Coastwise Trade Requests, trade agreement and trade program requests (e.g., “Does this transaction qualify as duty-free under U.S.-Israel Free Trade Agreement?”), TIB Requests (Temporary Importation under Bond Requests), MPF Exemption Requests (merchandise processing fees), and Buy America Requests.
Benefits of a binding ruling request
Customs binding ruling request program can be of enormous benefit to importers, giving them a chance to advocate for one position over another.
For example, a ruling allows an importer to:
- Argue for duty-free classification of importer merchandise rather than dutiable merchandise;
- Argue that the country of origin of the merchandise is not actually a foreign country, but the United States, allowing them to label their products “Made in USA”;
- Argue that “commissions” or “assists” are not part of dutiable value;
- Argue that e-cigarettes or vaporizers are not drug paraphernalia;
A national “permit” to import
Additionally, a binding ruling request acts as a “permit” for importing the product nationally. Anyone who has received a binding ruling letter must include the ruling as part of the entry documents submitted to CBP. And no matter what port the product as entered through – whether in Chicago, Detroit, New York, or Los Angeles – the port is bound by the decision in the ruling. Therefore, rulings a fantastic way to advocate for a position, get it, and be sure that every port of entry abides by it.
A binding ruling request can be simple, or when advocating for a particular complex, novel or new type of treatment, can be complex and greatly beneficial to hire a customs lawyer to research, prepare and submit it. Whether complex or simple, Great Lakes Customs Law is ready to consult with you and determine what the best way forward for your particular customs transaction is — whether a ruling is necessary or helpful for your situation, and what you arguments for lower duties or more favorable treatment in classification, valuation, or country of origin are.