Customs Law Advisory - US Customs Rulings: A Powerful Tool for Business

US Customs Rulings:  A Powerful Tool for Business
For corporate importers, requesting a written ruling from US Customs and Border Protection (“Customs”) can be a powerful tool to define the costs and procedures that apply to imported merchandise.  These rulings can give the company strong protection from unexpected penalties or changes in procedures in connection with imported goods and may even limit the actions available to competitors. If Customs receives a written question on an import law matter, such as, but not limited to, valuation, classification or the use of duty free programs, the agency will issue a written ruling giving its definitive interpretation.  Any company with a genuine commercial interest in the issue may request a ruling.  The request can be a fairly simple business letter describing the question; however, it is usually in the interest of the requester to explain the outcome that it believes to be correct and reasons supporting its position.  A company may even include commercial documents or merchandise samples that will help prove its point.  Detailed or sensitive commercial information is kept confidential by Customs.

Customs generally takes about 90 days to issue these rulings. Once a ruling is issued, that interpretation is binding on Customs and the importer who made the request, unless the ruling is later revoked by Customs.  As long as the ruling exists, the company may rely on it for its import transactions and know that its compliance responsibilities are met regarding that issue.  The ruling provides the importer with certainty regarding how its imports will be treated by the various local ports of entry.  An importer following such a ruling cannot be found to have violated its responsibilities under US law and no penalty can be assessed against the importer in connection with that issue. Even if the ruling does not adopt the position advocated by the company, it may still create some benefit for the requesting company.  All rulings are published by Customs on its website and distributed to ports and reporting services throughout the country.  Thus, for example, if Customs rejects the use of a duty free provision for certain goods, such a ruling also would put the requestor’s competitors on notice that they too are ineligible to claim duty free treatment for the type of goods discussed.  Penalties would apply to companies that nonetheless continue to claim duty free treatment. A company that relies on a ruling should always consider whether the commercial facts of its transaction still match those presented to Customs in the ruling request.  If the facts of the transaction change, the ruling is no longer binding, although the analysis in the ruling may still be a good indication of the correct outcome for the new transaction.  However, if the facts change enough, the ruling may no longer apply at all.

If you have any questions regarding US Customs rulings, please contact Greg McCue at (202) 429-6421.