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Taichi Kawazoe

Origin Verification irregularities (Non-proof case)

2020-02-27 By Taichi Kawazoe

What if we claim preferential tariff treatment without any proof in order to reduce customs duties under the FTA?

Customs conduct a verification exercise on the good at random or when they have doubts about the authenticity of the certificate.

Here is an actual case of OriginVerification of a company imported chocolate, claiming preferential tariff treatment under one of Japan’s EPAs.

Origin Verification irregularities (Non-proof case)

An importer imported many kinds of chocolate based on self-certification by an approved
exporter, under one of Japan’s EPAs.

The PSR for 1704.90 (white chocolate) is CTH, and the maximum value of non-originating
materials used under Chapters 4 and 17 is 45% ex-works price.

After an application of risk assessment, the Customs clearance section conducted a
documentary examination.

Although Customs requested further information from the importer, and from the exporter via the importer, they could not provide sufficient information and explanations about the originating status of the good.

Customs then requested the exporting country to conduct a verification with regard to the originating status of the good, in accordance with the relevant provision of the EPA.

However, the information provided through verification was not sufficient to substantiate the originating status of the good.

Customs determined that the requirements for claiming preferential treatment under the EPA had not been satisfied, and therefore preferential tariff treatment was denied.

According to this actual case, lack of proof can not be the reason the customs admit its originating status claiming on the certificate.

Filed Under: Origin Verification

Origin Verification irregularities (Forged seal case)

2020-02-27 By Taichi Kawazoe

What if we claim preferential tariff treatment the wrong way in order to reduce customs duties under the FTA?

Customs conduct a verification exercise on the good at random or when they have doubts about the authenticity of the certificate.

Here is an actual case of OriginVerification of a company imported Tin-Plate Can, claiming preferential tariff treatment under one of Japan’s EPAs.

An importer imported Tin Plate Cans from country L and provided a certificate of origin to
Customs when claiming preferential treatment.
A Customs official in the clearance section compared the certificate of origin with the list of
seals registered with Japan Customs, but could not find the same seal in the list. The official, therefore, had doubts about the authenticity of the certificate of origin. Hence, Customs
requested the exporting country to conduct verification with regard to the authenticity of the
certificate of origin.

As a result of the verification, it was discovered that the certificate of origin which the
importer had provided was forged.

Customs determined that the requirements for preferential tariff treatment had not been satisfied. Therefore, preferential tariff treatment was denied.

Filed Under: Origin Verification

How “Oil filter” is classified under HS code

2020-02-26 By Taichi Kawazoe

In order to reduce supply chain costs, proper HS Tariff Classification needs to be
taken when it comes to adopting CTC method under the FTA.

In this article, I’m going to introduce how “Oil filter” is classified by the customs across the world.
Those classifying records are retrieved from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

United Kingdom customs case

Reference:GB500688166
Classified HS code: 8421.23
Issuing date: 2009-10-09

Engine oil filter(cylindrical)made from knitted galvanized mild steel

「オイルフィルター」のHSコード分類法

Retrieved from:European Union Website

This product is classified as filtering machinery because it’s considered a part of filtering machinery.

German Customs case

Reference:DE20262 / 16-1
Classified HS code : 5911.90
Issuing date : 2017-5-8

Filter cartridge with an outer diameter of 7.6 cm and a height of 9.4 cm、 – of a lamella-like folded filter surface of a nonwoven fabric of spinning materials、A so-called clip made of apparently base metal、 – equipped internally with a so-called supporting fabric made of apparently base metal、 – assembled by assembling、 – is designed according to the application for a pressure oil filter for the filtration of transmission oil in a vehicle


Retrieved from:European Union Website

Even though It’s mainly used for filtration with equipment, it is classified as
“Textile products for technical uses” (HS code 5911.90),
because it’s not fully designed to fit apparatus for filtering or purifying water.

THINGS TO CONSIDER

Those two products are classified in different ways.
German Customs case is based on material based classification.
On the contrary, United Kingdom customs case is based on product purpose.

That difference comes from each Section and Chapter’s note,therefore filter’s HScode can not be classified by just its material.

Filed Under: Classification Example, HS Classification

How “Staring wheel cover” is classified under HS code

2020-02-21 By Taichi Kawazoe

In order to reduce supply chain costs, proper HS Tariff Classification needs to be
taken when it comes to adopting CTC method.

In this article, I’m going to introduce how “Staring wheel cover” is classified by the
customs across the world.
Those classifying records are retrieved from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

German Customs case

Reference:DE9149/15-1
Classified HS code : 8708.94
Issuing date : 2015-05-19

Five different leather blanks(according to the request made of cowhide)stamped by stencils of leather hides, provided at the edges with holes for sewing are on a foamed cellular plastic for padding glued equipped steering wheel skeleton of magnesium and additionally sewn on arises is recognizable as work in progress, not yet composite part of a steering wheel for motor vehicles.redeploying is excluded due to the special blank(not a commodity position 4205)”Part of the vehicles of heading 8701 to 8705、part of the steering wheel(leather)、not for the industrial assembly ”

How “Staring wheel cover” is classified under HS code

Those products are intended to be attached to steering wheels , therefore it’s classified to “Part of the vehicles”(HScode:8708.94)

Retrieved from:European Union Website

Poland Customs case

Reference: PLPL-WIT-2014-01186
Classified HS code : 4205.00
Issuing date : 2014-09-04

To the contrary of German customs case, this product was classified to “Other articles of leather”(HScode:4205.00)
even though the manufacturing process is almost the same as previous one(Reference:DE9149/15-1)

How “Staring wheel cover” is classified under HS code

English translation of the items description:
Elements of the steering wheel cover in vehicles, made of full grain cow leather, split and dyed. Leather elements cut to the desired shape.

Retrieved from:European Union Website

Conclusion

Since those two product manufacturing process is similar, classifying decisions of those two countries(German and Poland)seem contradicted.

Without a picture of Poland’s item, I can not say for sure but according to Poland’s item’s description, the item is made of full-grain leather, therefore Poland customs may thought this item belongs to “Other articles of leather” rather than “Part of the vehicles”.

Filed Under: Classification Example, HS Classification

Origin Verification irregularities (Cocoa powder case )

2020-02-20 By Taichi Kawazoe

What if we claim preferential tariff treatment the wrong way in order to reduce customs duties under the FTA?

Customs conduct a verification exercise on the good at random or when they have doubts about the authenticity of the certificate.

Here is an actual case of OriginVerification of a company imported cocoa powder, claiming preferential tariff treatment under one of Japan’s EPAs.

Origin Verification irregularities (Cocoa powder case )

Applicable PSR for 1805.00 (cocoa powder) : CTH, provided that, where non-originating
cocoa beans of heading 18.01 are used, the non-originating cocoa beans are harvested,
picked or gathered in a non-Party which is a member country of ASEAN.

The Customs clearance section ascertained, through documentary examination, that the
certificate of origin showed the goods to be produced from cocoa beans of a non-Party
which is an ASEAN member country.

Then, the Customs clearance section asked the importer about the origin of the cocoa beans, and was informed that the origin was
country E (a member country of ASEAN) (30%),
country F (a member country of ASEAN) (40%),
and “Africa” (30%).

The cocoa beans originating in country E and country F would satisfy the PSR. However, the cocoa beans from “Africa” would not satisfy the PSR. Therefore, the Customs clearance section informed the Post-Clearance Audit (PCA) section of the doubt surrounding the originating status of the good, and requested the PCA section to conduct an investigation.

The PCA section conducted an audit of the importer, but could not obtain enough information to remove the doubt. Therefore, Customs carried out the verification procedure stipulated in the EPA and requested information from the competent authority of country D.

The reply from the competent authority of country D was that the good was not originating.
Customs determined that the good was not an originating good, and preferential tariff
treatment was denied. The importer made an amendment to the declaration of duty and
paid the necessary amount.

Filed Under: Origin Verification

Origin Verification irregularities (Additives case )

2020-02-19 By Taichi Kawazoe

What if we claim preferential tariff treatment the wrong way in order to reduce customs duties under the FTA?

Customs conduct a verification exercise on the good at random or when they have doubts about the authenticity of the certificate.

Here is an Actual case of OriginVerification of a company imported frozen Surimi (minced fish), claiming preferential tariff treatment as “goods wholly obtained” under one of Japan’s EPAs.

Customs received information from outside sources that in the process of producing the Surimi, phosphates that are not available in country A had been used as a preservative.
Customs asked the importer to provide more information about the Surimi. The importer
provided Customs with the list of ingredients. Customs examined the document and found
that the material concerned (i.e., phosphates) was included in the list. Therefore, Customs
had doubts about the originating status of this material and requested the exporting country
to conduct verification with regard to its originating status, in accordance with the relevant
provision of the EPA.

As a result of the verification, it was discovered that the phosphates used in the production
process were non-originating.

Origin Verification irregularities (Additives case )

Customs determined that the Surimi was not an originating good, and therefore preferential tariff treatment was denied.

The importer made an amendment to the declaration of duty and paid the necessary amount.

Retrieved from:GUIDE TO COUNTER ORIGIN IRREGULARITIES (EXCLUDING FRAUD)

Filed Under: Origin Verification

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