Fast and easy customs clearance

In the times we live in, global trade with goods of all kinds is ever-present. Whether you are a large multinational corporation and market leader trading with assembly and fastening materials and supplying workshops and industrial factories the world over. Or a small company which develops special adhesives and exports through the entire world. Or a private individual who orders a fabulous pair of Jeans from America or an electronic device from Taiwan. All the goods will be required to cross borders. International trade is not quite without borders. The states involved demand their share of the cake, for example, in the form of duties.


Finding the correct customs tariff number is not always easy

With an internationally harmonised system of codes, the World Customs Organization (WCO) has developed and administers uniform guidelines for customs clearance globally. The six Digit codes for some 5’000 material groups adhere to set rules and have a logical structure. They serve as the basis for national customs tariff numbers. A tariff number can be allocated to every product. The procedure of classification is sometimes easy. For example: tablet computers and PCs, irrespective of their brand, always have customs tariff number 8471.30. However, classifying a drill is more complicated. Depending on the type of drill in question, there are 8 different tariff numbers to decide between. In the past, to find the correct customs tariff number, it was necessary to plough through thick books with painfully small lettering. Today, with the Internet and a few clicks on the homepage of national customs authorities, the whole procedure has been made more comfortable. Nevertheless, it is still difficult not to lose your orientation in the jungle of tariff numbers.

The fact that the codes are revised and amended regularly adds a further challenge to existing issues. Normally, each year, up to several hundred tariff numbers are changed per country. For example, as of 1 January 2017, the number of amendments to tariff numbers in Germany exceeded 200 and in Switzerland more than 500 tariff numbers were affected.

For exporters and importers, this means checking tariff numbers which does not present a problem if only 5 or even 20 articles are involved. However, many companies have a much larger list of stock. This is the kind of unpopular work which, bringing no direct profit, is often put aside for a rainy day. “Not much can have changed” and “It was always fine up to now” are typical lines of thinking when it comes to facing the challenge of revising tariff numbers. The next problem lurks in internal processes. If the composition or the origin of a product changes, even if only one individual component is affected, will this have an effect on the customs tariff number.


What happens if incorrect customs tariff numbers are used?

Incorrectly used customs tariff numbers represent a risk: If, due to an incorrect tariff number, insufficient customs duties are paid and the customs authorities discover the mistake during a check, this will have a number of consequences. The authorities will demand subsequent payment of all underpaid duties – backdated up to 5 years. That can quickly add up to or exceed 10’000 Euros. In addition, a fine of up to several thousand Euro will be enforced. On top of everything, a high-risk rating will be imposed by the customs authorities, meaning that these authorities may focus on checking any future customs transactions by the company in question. Consequently, the risk of a shipment being stopped when some minor details are unclear is higher. It is now, at the latest, that a frenzy of activity to correct customs tariff numbers ensures.

In the opposite case, however, customs authorities do not object if, due to an incorrect customs tariff number, customs duties are overpaid. It is the affected company that will suffer a reduction in the profits made. Or the customers will be subject to higher costs, which will not increase the level of satisfaction on their side. It is possible to reclaim overpaid customs duties but the complicated and bureaucratic procedure involved is demanding, costing time and nerves which could be put to better use.


Quickly and easily on the safe side

Every company that is involved in import or export usually has a designated person who is responsible for customs clearance. However, in small and medium-sized companies, the responsibility usually lies with an office worker whose main task is order processing or bookkeeping and who is rarely a customs specialist. This is a luxury which only large companies can afford.

A simple, fast and cost-effective way to guarantee reliable customs processing is to assign a mandate to customs specialists for the customs classification procedure. Customs tariff number compliance is their daily business. They know when and where customs tariff numbers amendments apply and they professionally target any problems that might arise. Customs specialists will keep the required time and effort to a minimum.

Do you want to know out more about customs tariff numbers and how you can optimize your customs processes? Contact us!


About Gerhard Meisterl

For more than 25 years, Gerhard Meisterl has concentrated on the subject of customs. He began his carreer as a customs agent. Consequently, a man of practical experience, he learnt about custom processes from the buttom up. After further training as Export Manager, he took over management of a customs team of 10 at the EU border. Since 2013, as customs specialist and using his deep-rooted expertise which ranges from efficient test processes over correct classification of critical products to preferential and origin rules, he has been supporting and advising Würth Logistics customers.

Würth International AG
Aspermontstrasse 1, CH-7004 Chur
Kontakt: +41 81 558 00 00

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