C6u—U.S. Customs Tariff (HTSUS) Classification
Subscriber price: $295.00, Non-subscriber price: $380.00
Estimated total study time: 24 hours 35 minutes
This is a comprehensive "nuts and bolts" training in how to properly classify goods in the U.S. customs tariff. You will learn the structure of the Harmonized Tariff Schedule of the United States ("HTSUS") and how to apply the HTS classification steps known as General Rules of Interpretation ("GRIs") to most types of products. The Additional Rules of Interpretation, general notes, including NAFTA eligibility and the most commonly used special provisions in the HTSUS (Chapter 98 and 99), are introduced.
This course is updated at the beginning of each year to reflect the amendments to the basic HTSUS. Links to the online version and to download the current HTSUS are provided. However, some students may find it more convenient to use the HTSUS in paper format to complete the practical exercises.
Use this course to rapidly train staff newly assigned to handle HTSUS and to fill in the gaps for existing staff who perform basic classification but who have not been formally trained.
Note: To keep this course relatively short, we do not provide complex practical application exercises for GRIs 3 and 4. For more in-depth training in HTS classification, we recommend GISTnet Course C5—Harmonized Tariff (HTS) Classification. Alternatively, for drill and practice purposes after taking this course, assign C8u—HTSUS Classification Post Evaluation; Learning by Practice and Simulation. Please note, there is also a final exam for certification purposes at the end of C8u.
Classification of Goods in the HTSUS (C6u)
The Harmonized Tariff Schedule of the United States (HTSUS) is subdivided into various elements which together form the structure of the nomenclature. In order to perform accurate classification it is essential to understand the relation between the elements. These elements are sections, chapters, subchapters, headings, subheadings, and notes. This first lesson deals with the general overall structure, and the breakdown by sections.
(Estimated study time: 53 minutes)
- Overview of the Harmonized System
- Classification of Goods in the Customs Tariff
- How Important is it to Get the Right Classification?
- Responsibility for Classification of Imported Goods
- Basis for the HTSUS
- The HTSUS is Divided into Sections
HTSUS Framework (C6u, C6.1u)
This lesson continues with the breakdown of the HTSUS by chapters, headings and subheadings. Also available for download in this module is a unique Chapter and Heading listing that is not commercially available. This document allows a quick glance at the whole HTSUS condensed into less than 30 pages.
(Estimated study time: 1 hour 14 minutes)
- Sections are Divided into Chapters
- Chapter and Heading Listing to the Rescue
- Chapters 1–97
- What about Chapters 98 and 99?
- Chapters are Divided into Headings
- Headings Organized in Subchapters
- Headings are Divided into Subheadings
- Subheadings are not born equal!
- Example of One-tab Subheading
- Example of a Two-tab Subheading
- Parts of the Tariff Number beyond Six Digits
HTSUS Section and Chapter Notes (C6u, C6.1u)
The next important thing to consider when determining the correct classification of an article are the section, chapter and subheading notes. Notes hold the key to exclusions and definition of terms.
(Estimated study time: 40 minutes)
- Section Notes and Chapter Notes
- Defining and Refining Classification Options
- Exclusions from Classification in Section and Chapter Notes
- Definitions of Goods or their Composition in Section and Chapter Notes
More on Notes, Language and Punctuation (C6u)
Apart from the very structure of the Harmonized Tariff Schedule of the United States (HTSUS), classifying involves the knowledge of the meaning of some Latin expressions, attention to punctuation, and awareness of the language of the HTSUS.
(Estimated study time: 1 hour 13 minutes)
- Subheading Notes
- Practical Application of Notes
- Visible Elements vs. Elements that are not Visible
- Technical Language and Vocabulary
- Latin Expressions Represent Mental Concepts
- Text Punctuation Influences Meaning
- Text Punctuation and the Semi-Colon
- Text Punctuation and the Comma
General Rule 1 (C6u)
HTSUS Classification in the Harmonized Tariff Schedule of the United States (HTSUS) is governed by six HTSUS General Rules of Interpretation. The General Rules provide a uniform and mandatory system to read and interpret all the elements of the tariff. Knowledge and understanding of those rules is the single most important prerequisite to accurately classify goods. We will begin with Rule 1 which deals with the legal elements.
(Estimated study time: 1 hour 20 minutes)
- General Rules of Interpretation
- The Operating System
- Classification of a Fancy Cork
- At a Glance...The Six General Rules
- The Rules Made Readable
- General Rule of Interpretation Number 1
- Section, Chapter and Subchapter Titles are for Reference Only
- Rule 1 is the Chief!
- Examples of Titles that are Misleading
- Classify According to Legal Elements
- Terms of the Headings
- Terms of Relative Section and Chapter Notes
- Classification of Chilled Grapes
- Not to Contradict Rule 1
- Classification of Needlecraft Assortment
- Rule 1 Conclusion
General Rule 2 (C6u)
This lesson details how General Rule 2 expands the scope of headings. It covers incomplete, unassembled, mixed or composite goods. We will discuss how headings are expanded through GRI 2 to include goods that do not perfectly match the terms of those headings.
(Estimated study time: 1 hour 11 minutes)
- General Rule of Interpretation Number 2
- Expand the Scope of Headings
- General Rule 2(a)
- How to Handle Incomplete or Unfinished Articles
- Examples of the Essential Character of Incomplete Articles
- "Blanks" are Considered Unfinished Articles
- Blanks Require Additional Manufacturing
- Practical Use of Blanks
- What to do with Unassembled or Disassembled Articles
- What if the Articles are Both Unassembled or Disassembled AND Incomplete or Unfinished?
- Unassembled AND Incomplete: The Double Test
- Classification of an Unassembled Bicycle
- Unassembled or Disassembled Articles Must be Ready for Assembly.
- Examples of Unassembled or Disassembled Articles
- General Rule 2(b)
- Goods Consisting Wholly or Partly of Materials or Substances
- Materials and Substances Mixed with Other Materials or Substances
- Classification of a Horticultural Mixture
- Goods or Articles Made of a Given Material or Substance
- When Two or More Headings may Apply
- Rule 2 must not Contradict Rule 1
General Rule 3(a) (C6u)
Rule 3 is the referee. In this lesson we will discuss the first and second part of Rule 3. When a good is, at first glance, classifiable in two or more headings, it is Rule 3 that will tell us which heading to use. Rule 3(a) directs us to the heading whose text better identifies the goods.
(Estimated study time: 38 minutes)
- General Rule of Interpretation Number 3
- Rule 3 The Referee...
- General Rule 3(a)
- The Heading Providing the Most Specific Description
- Classification of a Gas Barbecue
- When Having the Most Specific Description is Not Sufficient!
- Classification of a Gas Barbecue (Continued)
- Examples of Headings which do not Refer to "Part Only" of Materials
- Steps for Classifying Two or More Plausible Headings
- What happened to all the examples?
General Rule 3(b) (C6u)
We know that Rule 3 tells what to do when goods are classifiable in two or more headings. If there is no heading that better identifies the goods according to Rule 3(a) then Rule 3(b) will provide the direction on when to use essential character to determine the proper heading.
(Estimated study time: 50 minutes)
- General Rule 3(b)
- Material or Component Giving Essential Character
- Composite Goods Consisting of Different Materials
- Composite Goods Made Up of Different Components
- Goods Put Up in Sets for Retail Sale
- Essential Character
- Classification of a Gas Barbecue Conclusion
- Classification of Scrap Metal Alloy
- Use Essential Character Only if Applicable
General Rule 3(c) and 4 (C6u)
Rule 3 tells what to do when goods are classifiable in two or more headings. This lesson will provide training on when to move past essential character and look at the third part of Rule 3 to classify numerically in the last heading. Then, we will learn when to use the rule that applies when all else truly fails. Rule 4 helps classify something that can absolutely not be found elsewhere in the nomenclature.
(Estimated study time: 53 minutes)
- General Rule 3(c)
- Heading Appearing Last in Numerical Order
- Rule 3 Conclusion
- General Rule of Interpretation Number 4
- General Rule 4
- When Everything Else Fails
General Rule 5 (C6u)
From Rule 5 we will learn how to classify packing materials and containers. This will include containers specially made for articles, as well as reusable and non-reusable containers.
(Estimated study time: 1 hour 0 minutes)
- General Rule of Interpretation Number 5
- Boxes, Cases, Packaging and Packing
- General Rule 5(a)
- General Rule 5(b)
General Rule 6 (C6u)
Rule 6 helps us determine the proper HTSUS subheading. We have learned that to find the proper heading we must apply rules 1-5 in order. Now, to find the subheading we must apply rules 1-5 in order again at the subheading level.
(Estimated study time: 54 minutes)
- General Rule of Interpretation Number 6
- Classification in Subheadings
- Mutatis Mutandis
- Only Subheadings at the Same Level are Comparable
- Section and Chapter Notes may also Apply to Subheadings.
Additional U.S. Rules 1(a) & (b) (C6u)
The HTSUS Additional U.S. Rules of Interpretation are provided by the U.S. government to further clarify the GRIs. This lesson details the first two rules dealing with the use and purpose of goods.
(Estimated study time: 1 hour 9 minutes)
- Additional U.S. Rules of Interpretation
- Additional U.S. Rules Made Readable
- Use and Purpose of Goods
- Additional Rule 1(a) – Principle Use
- Additional Rule 1(b) - Actual Use
Additional U.S. Rule 1(c) (C6u)
Continuing our discussion of the HTSUS Additional U.S. Rules of Interpretation we arrive at clarification for the classification of parts & accessories.
(Estimated study time: 1 hour 18 minutes)
- Additional Rule 1(c) – Parts & Accessories
- No General Rule Applicable to Parts
- Classification Using The Double Approach
- Application of Section and Chapter Notes
- Parts of General Use
- Section and Chapter Specific Conditions
- Sequence for Determining Classification of Parts
Additional U.S. Rule 1(d) (C6u)
Continuing our discussion of the HTSUS Additional U.S. Rules of Interpretation we arrive at clarification for mixtures of textile materials. This lesson is about classification by the weight of material and applicability of General rule 3(b) versus 3(c) for textiles.
(Estimated study time: 36 minutes)
- Additional Rule 1(d) - Mixtures of Textile Materials
- Textile Mixtures Classified by Predominant Weight
- Classification Appearing Last Numerically
A Classification Strategy (C6u)
After learning the theory of the HTSUS, the next step is to put it all together to make it work as a coherent ensemble. This is where we define some common pitfalls and discuss irregular situations. How goods are presented is a big part of determining the correct classification. The use and purpose of the good is also an important factor. We will discuss these and show that even when all the facts are given, the outcome can still be subjective.
(Estimated study time: 1 hour 25 minutes)
- A Classification Strategy
- Tips on Searching for the Proper Heading
- Inquiry Skills
- Factors Influencing Classification
- Description of Goods
- Seeing Goods "as Presented"
- Subjective Factors in Classification
- Reusable Packing Materials
- More Sources
- Additional Information Found in the HTSUS
- Appendices to the HTSUS
- Statistical Annexes to the HTSUS
- Alphabetical Index to the HTSUS
- Change Records
- Notice to Exporters
General Notes 1-3 (C6u)
The General Notes give direction on how to handle the different trade agreements and provide guidance on tariff treatment of imported goods and what is considered the customs territory of the United States.
The General Notes also give guidance on determining the proper duty rate. General Note 3 describes the rates of duty columns and what they mean. There are codes called special program indicator (SPI)s that increase or decrease normal trade relation (NTR) duty rates. It is also essential to understand certain circumstances where articles are exempted from duty or allowed to be commingled together. This lesson addresses all of these issues.
(Estimated study time: 1 hour 2 minutes)
- General Notes to the HTSUS
- General Note 1—Tariff Treatment of Imported Goods and of Vessel Equipments, Parts and Repairs
- General Note 2—Customs Territory of the United States
- General Note 3—Rates of Duty
- Duty Columns
- Duty Column 1
- Duty Column 2
- Products Eligible for Special Tariff Treatment
- Duty Exemptions
- Commingling of Goods
- Unit of Quantity
- Products of Insular Possessions
- Products of the West Bank, the Gaza Strip or a Qualifying Industrial Zone
GSP and NAFTA (C6u)
Some goods have a condition that must be met in order to be imported duty free or with a reduced duty rate. In this lesson we will talk about some of the regulations concerning the two most common trade agreements GSP and NAFTA that have conditions for importing at the preferential duty rate.
(Estimated study time: 59 minutes)
- General Note 4—Generalized System of Preferences
- What Type of Articles are Designated as Eligible for GSP?
- How Does an Import Receive GSP Duty-free Treatment?
- Identifying Articles under the Generalized System of Preferences in the Tariff Schedules
- What are Statutory Competitive Need Limitations
- Inputs from GSP Beneficiaries Can Pool Inputs
- Products and Countries Covered by the Certified Handicraft Textile Arrangement
- Generalized System of Preferences Expiration and Retroactive Renewal
- General Note 12—North American Free Trade Agreement
- NAFTA Rules of Origin
- Determining NAFTA Eligibility
All Other General Notes (C6u)
The HTSUS General Notes define trade agreements, exemptions, and rules for determining the applicable duty rate. We will continue with our study of the General Notes and discuss other requirements for classification under various other free trade agreements.
(Estimated study time: 1 hour 4 minutes)
- General Note 5—Automotive Products and Motor Vehicles Eligible for Special Tariff Treatment
- General Note 6—Articles Eligible for Duty-Free Treatment Pursuant to the Agreement on Trade in Civil Aircraft
- General Note 10—Products of the Freely Associated States
- General Note 13—Pharmaceutical Products
- General Note 14—Intermediate Chemicals for Dyes
- General Note 15—Exclusions
- Other General Notes Specific to Trade Agreements
- Goods in These Trade Agreements Must be Imported Directly From a Country in the Same Trade Agreement
- Goods in these Trade Agreements Must Not Leave Customs' Control but do not have to be Imported Directly
- Agreements using Build-up, Build-down, or Net Cost RVC Calculation Methods
- Agreements using just Build-up or Build down RVC Calculations Methods
Other HTSUS Notes (C6u)
The HTSUS contains notes in addition to those of the sections and chapters. There are HTSUS General Statistical Notes, HTSUS additional U.S notes, HTSUS General Notes and more! We will discuss each briefly in turn to give an idea of what they are and where to find them.
(Estimated study time: 53 minutes)
- General Statistical Notes
- Additional U.S. Notes
- Other Statistical Notes
Chapter 98 Subchapter 1 (9801)—Articles Exported and Returned, Not Advanced or Improved in Condition; Animals Exported and Returned
In this lesson we review the conditions for U.S. Goods Returned touching on a few other provisions under 9801 for articles to returned to the U.S. with free or reduced duty.
(Estimated study time: 1 hour 9 minutes)
- Chapter 98 Subchapter 1 (9801) Introduction
- Articles Previously Imported, Not Advanced and Re-imported
- Product Returned to the United States
- Documentation Required for Returned Product
- Documentation for Product Returned to the U.S. Valued at $2500 or less
- Documentation for USGR Valued $250 or Less and Certain Aircraft and Aircraft Parts & Equipment
- Documentation for Foreign and U.S. Goods Returned Valued $800 USD or less
- Documentation for Foreign and U.S. Goods Returned Valued $801 - $2500 USD
- Documentation for USGR Valued over $2500 USD
- Foreign Shippers Declaration (FSD)
- Consignee's or Owner's Declaration
- Manufacturer's Affidavit
- Documentation for Certain USGR Valued at $10,000 or Less
- Other Documents Providing Sufficient Proof of Export
- Documentation Requirements for Certain Aircraft Returned to the U.S.
- Documentation Requirements of Re-imported Goods Under Department of State License
- U.S. Goods Returned and NAFTA
- Articles Previously Imported Duty Paid, Not Advanced and Re-imported
- Articles Previously Imported Duty Paid, Not Advanced while Abroad, and Returned to the U.S.
- Re-imported Articles Exported under Lease
- Articles Exported and Returned
- Articles Exported for Scientific or Educational Purposes and Returned
- Articles Exported for Exhibition and Returned
Chapter 98 Subchapter 2 (9802)—Articles Exported and Returned, Advanced or Improved Abroad
9802 provides provisions for reduced duty for goods exported from the U.S., repaired or altered abroad and then returned to the U.S. This includes repaired articles and articles imported with U.S. content. We'll briefly discuss the conditions for re-importation.
(Estimated study time: 1 hour 10 minutes)
- U.S. Goods Repaired, Altered, or Processed Abroad and Returned
- The Two-Step Process for U.S. Goods Repaired, Altered, or Processed Abroad and Returned
- Documentation Required to Declare Articles Repaired, Altered or Processed
- Articles with U.S. Content
- U.S. Content Articles in General
- Documentation for U.S. Content Articles
Government Contract (9808) and TIB (9813) (C6u)
There are some other Chapter 98 provisions, but the two additional classifications you will see most often will probably be from HTSUS headings 9808 and 9813. In this lesson we will review government contract, talk a little bit about ITAR and temporary imports under bond.
(Estimated study time: 1 hour 5 minutes)
- Articles Imported under Government Contract
- Department of Defense Contract Articles
- Government Contract Articles Sold to Government Facilities or DCMCI-IC
- ITAR Direct Government Shipments
- ITAR Government Temporary Imports
- Temporary Imports; Another Two-Step Process
- Importing under a Temporary Import Bond
- Documentation for Temporary Importation Bond Imports
- Additional Fees for Temporary Importation Bond Handling
- Cancellation of the Temporary Import Bond
Chapter 99 Provisions (C6u)
Chapter 99 provides temporary legislation for changes in the rate of duty charged upon import. We will review some of the circumstances to look into Chapter 99 for these special duty rates and some of the conditions for import.
(Estimated study time: 1 hour 59 minutes)
- Chapter 99 General Information
- U.S. Import Quotas
- Quotas Administered by U.S. Customs and Border Protection
- U.S. Customs and Border Protection Administers the Majority of Import Quotas
- Key Factors in Determining Whether Quota Applies
- Absolute Quota
- Absolute Quota Allows Only a Limited Number of Units During a Specific Period of Time
- Examples of Absolute Quota
- Tariff Rate Quota
- Tariff Rate Quota Allows a Limited Number of Units at a Reduced Duty Rate During a Specific Period of Time
- Examples of Tariff Rate Quota
- After Determining that Quota Applies
- Importer's Options When the Quota is Full
- Processing Quota Entries
- General Information for Processing All Quota Entries
- Processing Absolute Quota Entries
- Processing Tariff Rate Quota Entries
- Quotas Administered by Agencies Other than CBP
- Dairy Products
- Watches and Watch Movements
- Earned Import Allowance Programs
- Goods for Personal Use and Commercial Samples Exempt from Quota