Tariff Classification Fresh Cut Flowers · Fresh Cut Flowers • The risk identified is that fresh...

Historical Verification Priorities July 2020

Tariff Classification:

Fresh Cut Flowers

• The risk identified is that fresh cut flowers may be misclassified as “other” fresh cut flowers, which attract a duty rate of 6%

• Flowers named in the Customs Tariff should be classified under their respective tariff items, which attract duty rates from 8% to 16%

• This verification priority was released in April 2012 and is now complete

Results of first round of verifications for fresh cut flowers

Targeted companies (Round 1)

Cases closed

Cases in error

Percentage non-

compliance

Detailed adjustment statement

Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

32 32 23 72% $13,294 $112,971 $66,000 $192,265

• The results show that many flowers specifically named in the Customs Tariff were misclassified as other fresh cut flowers

• A verification priority regarding the valuation of fresh cut flowers is also complete

Palm Oil

• The risk identified is that crude palm oil of tariff item 1511.10.00 and other palm oils of tariff item 1511.90.90, which are dutiable, could be misclassified under other tariff items that are duty-free

• This verification priority was released in May 2013 and is now complete

• A second round of verifications was released in November 2014 and is also complete

Results of first and second round of verifications for palm oil

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

17 17 10 59% $304,568 $4,993,059 $600 $5,298,277

• The results show that most of the goods that were found to be misclassified were properly re-classified under subheading 1517.90 or under tariff item 1511.90.90 of the Customs Tariff

Wheel Rims and Spokes

• The risk identified is a potential misclassification of goods under tariff item 8714.92.00, which is duty-free and applies only to wheel rims and spokes for vehicles of Headings 87.11 to 87.13 (e.g., motorcycles, bicycles, and carriages for disabled persons). It was suspected that some goods should have been classified under tariff item 8708.70.19 as road wheels of motor vehicles of Headings 87.01 to 87.05, which attracts a duty rate of 6%.

• This verification priority was released in February 2012 and is now complete

• A second round of verifications was released in August 2013 and is also complete

Results of first and second round of verifications for wheel rims and spokes

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by importers

(dollars)

Penalties (dollars)

Total (dollars)

21 21 20 95% $25,076 $82,638 $73,200 $180,914

• The results of both rounds of verifications confirmed that the majority of the goods that were verified were in fact for use on motor vehicles

Apparel Samples

• The risk identified is that apparel classified under conditional relief tariff item 9936.00.00, which is duty-free, may not comply with the usage conditions set out in this tariff item. Duty rates for apparel range as high as 18%.

• This verification priority was released in March 2014 and is now complete

Results of first round of verifications for apparel samples


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

9 9 8 89% $13,111 $5,334 $1,350 $19,795

• The results show that some of the goods that were verified did not qualify for the use of conditional relief tariff item 9936.00.00 of the Customs Tariff

Bags of Polymers of

Ethylene

• The risk identified is that bags of polymers of ethylene may be misclassified under tariff items that attract a duty rate of 6.5% under the Most-Favoured-Nation (MFN) tariff or 3% under the General Preferential Tariff (GPT), but should instead be classified under Headings 42.02, 46.02 and 63.05, which attract duty rates as high as 18% under the MFN or 7% under the GPT


Results of first round of verifications for bags of polymers of ethylene


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

18 18 4 22% $1,291 $46,321 $0 $47,612

• The results show that most of the goods that were found to be misclassified were properly re-classified under Heading 42.02 of the Customs Tariff

Generating Sets

• The risk identified is that generating sets could be incorrectly classified within Heading 85.02, instead of being properly classified elsewhere within the same position, and potentially be subject to a duty rate of 2%

• This verification priority was released in August 2014 and is now complete

Results of first round of verifications for generating sets


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

24 24 20 83% $89,171 $2,053 $2,100 $93,294

• The results show that the goods that were found to be misclassified were properly re-classified under various tariff items of Chapters 84 and 85 of the Customs Tariff

Coconut Milk from

Asian Countries

• The risk identified is that full cream or whole milk powder, properly classified as dairy products under Heading 04.02, may be misclassified as coconut powder or milk under various tariff items. Many tariff items of Heading 04.02 contain “over access commitment” duty rates as high as 295.5%.


• A second round of verifications was released in July 2013 and is also complete

Results of first and second round of verifications for coconut milk from Asian countries

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

42 42 21 50% $55,736 $192,399 $5,850 $253,985

• The results of both rounds show that the goods that were found to be misclassified were properly re-classified under Chapters 4, 11, 12, 19, 20, 21 and 22 of the Customs Tariff

Gazebos

• The risk identified is that gazebos could be misclassified as pre-fabricated buildings, which attracts a duty rate of 6% under the Most-Favoured-Nation Tariff (MFN) and is duty-free under the General Preferential Tariff (GPT). The goods may be properly classified as structures of aluminum under tariff item 7610.90.90, which attracts a duty rate of 6.5% (MFN) and 5% (GPT).

• This verification priority was released in November 2013 and is now complete


Results of first and second round of verifications for gazebos

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

33 33 19 58% $97,940 $631,043 $300 $729,283

• The verifications confirmed the suspected misclassification

Machinery for

Public Works

• The risk identified is that machinery could be misclassified as machinery for public works, building or the like, which is duty-free, instead of being properly classified under tariff item 8705.90.10, which focuses primarily on special purpose motor vehicles and attracts a duty rate of 6.1%


Results of first round of verifications for machinery for public works


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

10 10 2 20% $0 $0 $0 $0

• The results show that the majority of the goods verified were properly classified as machinery for public works

Polyurethanes in

Primary Forms

• The risk identified is that goods could be incorrectly classified under subheading 3909.50 (i.e. polyurethanes in primary forms), which is duty-free, whereas the goods may not be in a primary form and therefore should instead be classified in tariff items that are subject to a duty rate of 6.5%

• This verification priority was released in July 2014 and is now complete

Results of first round of verifications for polyurethanes in primary forms


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

21 21 8 38% $39,709 $101,153 $150 $141,012

• The results show that the goods that were found to be misclassified were properly re-classified under various tariff items of Chapters 32, 35 and 38 of the Customs Tariff

Articles of Iron or Steel

• The risk identified is that articles of iron or steel could be incorrectly classified within Heading 73.26, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%


Results of first round of verifications for articles of iron or steel


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

14 14 10 71% $6,061 $20,507 $9,900 $36,468

• The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 73 of the Customs Tariff

Spectacle Lenses

• The risk identified is that spectacle lenses may be misclassified within Heading 90.01, which is duty-free for certain goods, and may be properly classified under other tariff items within the same heading as "other" products, which attract a duty rate of 2%

• This verification priority was released in January 2013 and is now complete


Results of first and second round of verifications for spectacle lenses

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

29 29 23 79% $192,885 $710,154 $10,200 $913,239

• The results of both rounds of verifications show that most of the goods that were found to be misclassified were properly re-classified under tariff item 9001.50.90 of the Customs Tariff

Cereals

• The risk identified is that cereals could be incorrectly classified under Heading 10.08, whereas the accurate tariff items could potentially be subject to various duty rates depending on the appropriate classification that may be determined

• This verification priority was released in December 2014 and is now complete

Results of first round of verifications for cereals


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

7 7 7 100% $17,247 $12,631 $150 $30,028

• The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 10, 11, 12 and 19 of the Customs Tariff

Special Purpose

Motor Vehicles

• The risk identified is that special purpose motor vehicles could be misclassified under duty-free tariff items instead of being properly classified under various tariff items of Heading 87.05, which attract a duty rate between 6.1% and 6.7%



Results of first and second round of verifications for special purpose motor vehicles

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

62 62 32 52% $229,842 $78,757 $3,000 $311,599

• The results of the 2 rounds show that most of the goods that were found to be misclassified were properly re-classified under various dutiable tariff items of Heading 87.05 of the Customs Tariff

Geophysical and

Oceanographic Instruments

• The risk identified is that various instruments could be incorrectly classified within Heading 90.15, whereas the accurate tariff items could potentially fall outside of Heading 90.15 and/or be subject to various duty rates depending on the appropriate classification that may be determined


Results of first round of verifications for geophysical and oceanographic instruments


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

24 24 19 79% $55,035 $276,863 $3,000 $334,898

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 84, 85 and 90 of the

Customs Tariff

Prepared Meat of Swine

• The risk identified is that imported goods could be incorrectly classified as prepared meat of swine within Heading 16.02, instead of being properly classified elsewhere within the same chapter. The duty rates for some tariff items within Chapter 16 range from 0% to 12.5%, while others are tariff rate quota (TRQ) tariff items, which are subject to duty rates as high as 253%.


Results of first round of verifications for prepared meat of swine


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

30 30 9 30% $14,199 $1,450 $150 $15,799

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 16 or within Chapters 2, 19, 20 and 21 of the Customs Tariff

Live Plants

• The risk identified is that live plants could be incorrectly classified under a duty-free tariff item within Heading 16.02, instead of being properly classified elsewhere within the same heading and potentially be subject to a duty rate of 6%


Results of first round of verifications for live plants


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

10 10 3 30% $1,656 $2,481 $150 $4,287

The results show that the majority of the goods were correctly classified

Interchangeable Tools

• The risk identified is that imported goods could be incorrectly classified as interchangeable tools within Heading 82.07, instead of being properly classified under various tariff items within different chapters (for example, Chapters 39, 68, 82 and 84) and be subject to duty rates up to 6.5%


Results of first round of verifications for interchangeable tools


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

20 20 11 55% $38,847 $26,310 $17,850 $83,007

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 82 or within Chapters 73, 83, 84, 85 and 90 of the Customs Tariff

Air Brakes and

Parts Thereof

• The risk identified is that imported goods could be incorrectly classified as air brakes and parts thereof, within Subheading 8607.21, instead of being properly classified elsewhere within Heading 86.07, and be subject to duty rates up to 10%


Results of first round of verifications for air brakes and parts thereof


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

16 16 13 81% $69,464 $265,156 $3,750 $338,370

The results show that the goods that were found to be misclassified were properly re-classified elsewhere within Heading 86.07 or under Chapters 40, 73, 84, 85 and 90 of the Customs Tariff

Sausages and

Similar Products

• The risk identified is that imported goods could be incorrectly classified as sausages and similar products under Heading 16.01, instead of being properly classified under a tariff rate quota (TRQ) tariff item, and be subject to duty rates of over 200%

• This verification priority was released in October 2016 and is now complete

Results of first round of verifications for sausages and similar products


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

10 10 5 50% $323,186 $1,375,201 $450 $1,698,837

The results show that the majority of the goods that were found to be misclassified were properly re-classified under various tariff items - including TRQ tariff items - within Heading 16.01 of the Customs Tariff

Yeasts and Other

Micro-Organisms

• The risk identified is that imported goods could be incorrectly classified as yeasts under Heading 21.02, whereas the goods could potentially be properly classified elsewhere within Heading 21.02, and be subject to a duty rate of 6%


Results of first round of verifications for yeasts and other micro-organisms


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

11 11 5 45% $48,969 $192,973 $150 $242,092

The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 21 of the Customs Tariff

Bicycle Parts • The risk identified is that bicycle related goods could be

incorrectly classified within Heading 87.14, instead of being properly classified elsewhere within the same chapter, and potentially be subject to various duty rates up to 13%


• A second round of verifications was released in October 2016 and is also complete

Results of first and second round of verifications for bicycle parts

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

104 104 96 92% $217,707 $657,406 $127,375 $1,002,488

The results of both rounds show that the goods that were found to be misclassified were properly re-classified under many different Chapters, such as 40, 62, 73, 85, 87, 90 and many more, of the Customs Tariff

Chemical Products

• The risk identified is that there may be misclassification due to the significant duty difference for insecticides, fungicides, herbicides, etc., of Heading 38.08, depending on weight and package size of the imported product:

o 3808.XX.10: In packages of a gross weight not exceeding 1.36 kg each (6.5% duty rate)

o 3808.XX.20: In bulk or in packages of a gross weight exceeding 1.36 kg each (duty-free)


• A second round of verifications was released in September 2015, and a third round in April 2017, and they are also complete

Results of first, second and third round of verifications for chemical products

Targeted companies

(Rounds 1-2-3)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

94 94 53 56% $148,467 $392,329 $20,550 $561,346

• The results of the 3 rounds show that the goods that were found to be misclassified were properly reclassified under tariff item 3808.XX.10, “in packages of a gross weight not exceeding 1.36 kg each”

Handkerchiefs, Towels and

Related Paper Products

• The risk identified is that imported goods could be incorrectly classified as handkerchiefs, towels and other related paper products within Heading 48.18, instead of being properly classified under various tariff items within different chapters (for example, Chapters 30, 33, 34, 39, 56 and 96) and be subject to duty rates up to 12%


Results of first round of verifications for handkerchiefs, towels and related paper products


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

30 30 17 57% $30,287 $146,681 $13,275 $190,243

The results show that the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 48 or under Chapter 34 of the Customs Tariff

Photographic Film

• The risk identified is that imported goods could be incorrectly classified as photographic film under Heading 37.02, instead of being properly classified under Chapter 96, and be subject to a duty rate of 8.5%


Results of first round of verifications for photographic film


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

13 13 8 62% $7,520 $30,170 $27,000 $64,690

The results show that the goods that were found to be misclassified were properly re-classified elsewhere under Chapter 37 or within Chapter 96 of the Customs Tariff

Railway Equipment

• The risk identified is that imported goods could be incorrectly classified as railway equipment under Heading 86.08, instead of being properly classified under various tariff items, and be subject to duty rates up to 6.5%


Results of first round of verifications for railway equipment


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

17 17 14 82% $27,528 $29,656 $6,450 $63,634

The results show that most of the goods that were found to be misclassified were properly re-classified under various tariff items within Chapter 85 of the

Customs Tariff

Sacks and Bags under Tariff

Item 9903.00.00

• The risk identified is that sacks and bags classified under various tariff items and accounted for under conditional relief tariff item 9903.00.00, which is duty-free, may not comply with the usage conditions set out in this tariff item. The applicable duty rates range from 3% to 18%.



Results of first and second round of verifications for sacks and bags under tariff item 9903.00.00

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

16 16 8 50% $147,370 $569,206 $11,700 $728,276

• The results of both rounds show that some of the goods verified did not qualify for the use of conditional relief tariff item 9903.00.00

Pebbles, Limestone and

Granules

• The risk identified is that imported goods could be incorrectly classified as pebbles, limestone and granules within Heading 25.17, instead of being properly classified within Heading 68.02, and potentially be subject to a duty rate of 6.5%


Results of first round of verifications for pebbles, limestone and granules


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

14 14 9 64% $9,382 $29,437 $7,950 $46,769

The results show that most of the goods that were found to be misclassified were properly re-classified within Chapter 68 of the Customs Tariff

Curling Irons

• The risk identified is that goods may be misclassified as curling irons, which are duty-free. However, similar goods, such as flat irons, are properly classified under tariff item 8516.32.90, which attracts a duty rate of 6.5%

• This verification priority was released in June 2012 and is now complete

• A second round of verifications was released in February 2014 and is also complete

• A third round of verifications was released in October 2016 and is also complete

Results of first, second and third round of verifications for curling irons

Targeted companies

(Rounds 1-2-3)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

68 68 44 65% $142,749 $400,699 $56,575 $600,023

• The results of the first 3 rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff item 8516.32.90

Seaweed

• The risk identified is that prepared seaweed, which attracts a duty rate of 6%, could be misclassified under Heading 12.12 as unprepared seaweed, which is duty-free

• This verification priority was released in September 2011, and is now complete

• A second round of verifications was released in May 2013 and is also complete

• A third round of verifications was released in March 2016 and is also complete

• A fourth round of verifications was released in April 2017 and is also complete

Results of first, second, third and fourth round of verifications for seaweed

Targeted companies

(Rounds 1-2-3-4)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

94 94 78 83% $258,703 $650,182 $35,325 $944,210

• The results of the first 4 rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff classification number 2008.99.90.99 of the Customs Tariff

Dextrins and Other

Modified Starches

• The risk identified is that goods could be incorrectly classified as “dextrins and other modified starches”, whereas they could be properly classified as “other sugars” of Heading 17.02. The duty rates under Heading 17.02 range from 0% to 11%.


• A second round of verifications was released in May 2013 and is also complete

• A third round of verifications was released in June 2015 and is also complete

• A fourth round of verifications was released in January 2017 and is also complete

Results of first, second, third and fourth round of verifications for dextrins and other modified starches

Targeted companies

(Rounds 1-2-3-4)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

92 92 64 70% $298,221 $900,974 $61,300 $1,260,495

• The results of the first 4 rounds show that the goods that were found to be misclassified were properly re-classified under Headings 17.02, 21.06, 35.05 and 38.24 of the Customs Tariff

Hair Extensions

• The risk identified is that hair extensions could be misclassified under Heading 67.03, which is duty-free, instead of being properly classified under Heading 67.04 (e.g., wigs, false beards, etc.), which attracts a duty rate of 15.5%



• A third round of verifications was released in January 2017 and is also complete

Results of first, second and third round of verifications for hair extensions

Targeted companies

(Rounds 1-2-3)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

60 60 53 88% $570,762 $1,605,366 $45,100 $2,221,228

• The results of the first 3 rounds show that the goods that were found to be misclassified were properly re-classified under Heading 67.04 of the Customs Tariff

Parts for Power Trains

• The risk identified is that goods could be incorrectly classified within Heading 87.08, instead of being properly classified under tariff item 8708.99.15 (parts for power trains for the vehicles of Heading 87.03), which attracts a duty rate of 6%

• This verification priority was released in August 2014 and is now complete


Results of first and second round of verifications for parts for power trains

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

18 18 16 89% $3,472 $85,506 $6,450 $95,428

The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly

re-classified under various tariff items within Heading 87.08 of the Customs Tariff

Tubes, Pipes and Hoses

• The risk identified is that tubes, pipes and hoses could be incorrectly classified within Heading 39.17, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%

• This verification priority was released in September 2015, and is now complete


Results of first and second round of verifications for tubes, pipes and hoses

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

35 35 29 83% $48,923 $391,073 $12,350 $452,346

• The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Heading 39.17 of the Customs Tariff

Hair Dryers and Electric

Smoothing Irons

• The risk identified is that imported goods could be incorrectly classified as hair dryers or smoothing irons within Heading 85.16, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%


Results of first round of verifications for hair dryers and electric smoothing irons


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

35 35 16 46% $27,457 $63,045 $2,700 $93,202

The results show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Heading 85.16 of the Customs Tariff

Stone Blocks and Slabs

The risk identified is that imported goods could be incorrectly classified as stone blocks and slabs under Headings 25.14, 25.15 and 25.16, which are all duty free, instead of being properly classified under various tariff items within Chapter 68, and be subject to duty rates up to 7%


• A second round of verifications was released in December 2017 and is also complete

Results of first and second round of verifications for stone blocks and slabs

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

59 59 54 92% $148,880 $410,147 $15,750 $574,777

The results of the first 2 rounds show that the majority of the goods that were found to be misclassified were properly re-classified under Chapter 68 of the

Customs Tariff

Nails and Similar Articles

of Iron or Steel

• The risk identified is that imported goods could be incorrectly classified as nails and similar articles of iron or steel under Heading 73.17, which is duty free, whereas the goods could potentially be properly classified under dutiable tariff items, such as 8305.20.00 (staples in strips), and be subject to a duty rate of 6.5%


Results of first round of verifications for nails and similar articles of iron or steel


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

39 39 14 36% $46,101 $111,925 $600 $158,626

The results show that most of the goods that were found to be misclassified were properly re-classified under tariff item 8305.20.00 of the Customs Tariff

Mineral Waters and

Aerated Waters

• The risk identified is that imported goods could be incorrectly classified as mineral waters and aerated waters within Heading 22.01, instead of being properly classified elsewhere within the same chapter, and potentially be subject to a duty rate up to 11%


Results of first round of verifications for mineral waters and aerated waters


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

10 10 7 70% $5,844 $43,119 $600 $49,563

• The results show that most of the goods that were found to be misclassified were properly re-classified under tariff item 2201.90.00 of the Customs Tariff

Mountings, Fittings and

Similar Articles

• The risk identified is that imported goods could be incorrectly classified as mountings, fittings and similar articles within Heading 83.02, instead of being properly classified under various tariff items within different chapters (for example, Chapters 73, 83, 84, 87 and 94), and potentially be subject to duty rates up to 8%


Results of first round of verifications for mountings, fittings and similar articles


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

41 41 29 71% $19,523 $225,788 $15,000 $260,311

The results show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 39, 73, 82, 83, 84, 85, 87, 94 and 98 of the Customs Tariff

Vices and Clamps

• The risk identified is that vices and clamps could be incorrectly classified within Heading 82.05, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%


• A second round of verifications was released in February 2017 and is also complete

Results of first and second round of verifications for vices and clamps

Targeted ompanies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

40 40 35 88% $72,113 $255,315 $26,250 $353,989

• The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff item 8205.70.90 of the Customs Tariff

Parts for Use with

Machinery of Chapter 84

• The risk identified is that parts for use with certain machinery of Chapter 84 could be incorrectly classified within Heading 84.31, instead of being properly classified under various tariff items, and potentially be subject to a duty rate of 6.5%



Results of first and second round of verifications for parts for use with machinery of chapter 84

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

25 25 18 72% $71,400 $306,557 $3,200 $381,157

The results of the first 2 rounds show that the goods that were found to be misclassified were properly re-classified under various tariff items within Chapters 39, 40, 70, 73, 83 and 84 of the Customs Tariff

Castors with Mountings

of Base Metal

• The risk identified is that imported goods could be incorrectly classified as castors with mountings of base metal under Heading 83.02, which is duty free, whereas the goods could potentially be properly classified under dutiable tariff items, such as 8716.90.99 (parts of not mechanically propelled vehicles), and be subject to a duty rate up to 6.5%


Results of first round of verifications for castors with mountings of base metal


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

49 49 35 71% $51,482 $340,600 $6,300 $398,382

The results show that the goods that were found to be misclassified were properly re-classified under tariff item 8716.90.99 or under Chapters 39, 40, 73, 84 and 94 of the Customs Tariff

Articles of Plastics • The risk identified is that articles of plastics could be

incorrectly classified within Heading 39.26, instead of being properly classified elsewhere within the same Heading, and potentially be subject to a duty rate of 6.5%


• A second round of verifications was released in April 2017 and is also complete

• A third round of verifications was released in December 2018 and is also complete

Results of first, second and third round of verifications for articles of plastics

Targeted companies

(Rounds 1-2-3)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

29 29 26 90% $115,121 $380,942 $39,600 $535,663

The results of the first 3 rounds show that most of the goods that were found to be misclassified were properly re-classified elsewhere within Chapter 39 of the

Customs Tariff

Olive Oil The risk identified is that imported goods could be

incorrectly classified as olive oil (under Heading 15.09) or others oils obtained solely from olives (under Heading 15.10), which are duty free, instead of being properly classified elsewhere within Chapter 15, and be subject to duty rates up to 11%


• A second round of verifications was released in June 2018 and is also complete

Results of first and second round of verifications for olive oil

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

66 66 38 58% $243,783 $550,379 $10,725 $804,887

• The results of the first 2 rounds show that most of the goods that were found to be misclassified were properly re-classified under tariff item 1517.90.99 of the Customs Tariff.

Valuation:

Fresh Cut Flowers

• The risk identified is that aside from the potential misclassification of fresh cut flowers, there is also a risk of undervaluation of the goods

• Companies were selected for both valuation and tariff classification trade compliance verifications


Results of first round of verifications for fresh cut flowers


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

30 30 23 77% $119,183 $508,915 $18,000 $646,098

• The results show that many goods were found to be valued incorrectly (e.g., transportation costs were not added to the price paid or payable)

Yachts for Pleasure

or Sport

• The risk identified is that importers of yachts and pleasure crafts may not be in compliance with the valuation provisions of the Customs Act. The industry has been selected given the high rates of duty associated with Heading 89.03. Tariff items under this heading are dutiable with the exception of tariff item 8903.99.10 (racing shells), which is duty-free.


Results of first round of verifications for yachts for pleasure or sport


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

10 10 3 30% $5,171 $3,460 $450 $9,081

• The results show that some goods were found to be valued incorrectly (e.g., service fees were not added to the price paid or payable)

Preparations and

Pastrycooks’ Products

• Given the rates of duty associated with preparations of cereals, flour, starch, milk, and pastrycooks’ products, this industry was selected for verification. The products are generally classified under Chapter 19 and the majority of the Harmonized System numbers are dutiable, while others are subject to Tariff Rate Quotas.


Results of first round of verifications for preparations and pastrycooks’ products


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

9 9 5 56% $116,454 $1,023,919 $2,400 $1,142,773

• The results show that many goods were found to be valued incorrectly (e.g., packaging and transportation costs were not added to the price paid or payable)

Origin:

Mattress Upholstery

• This verification priority was initiated following an industry complaint about exports of mattress casings from the USA to Canadian mattress manufacturers, claiming the provisions of the North American Free Trade Agreement (NAFTA), when textile material may have been sourced from outside NAFTA territories


Results of first round of verifications for mattress upholstery


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

18 18 8 44% $64,453 $115,342 $25,900 $205,695

• The results show that some goods did not qualify under NAFTA

Cotton Pants

• Previous verifications indicated that there was evidence that men’s or boy’s cotton pants of subheading 6203.42 frequently failed challenges to their entitlement as originating goods under the NAFTA tariff treatments due to the fabric-forward requirement of the specific rule of origin governing the goods


Results of first round of verifications for cotton pants


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)

Self-adjustments by

importers (dollars)

Penalties (dollars)

Total (dollars)

13 13 1 8% $653,389 $0 $0 $653,389

• The results indicated that most of the verified goods qualified under NAFTA

Jewelry

• The risk identified is that jewelry classified in Chapter 71 may not meet the specific rule of origin and therefore does not qualify for duty-free importation under NAFTA


Results of first round of verifications for jewelry


Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

9 9 3 33% $0 $167,684 $4,500 $172,184

• The results show that some goods classified as jewelry do not qualify under NAFTA

T-Shirts

• Previous verifications indicated that there was evidence that t-shirts of Heading 61.09 were not compliant with the NAFTA Rules of Origin for several reasons


• A second round of verifications was released in June 2016 and is also complete

Results of first and second round of verifications for t-shirts

Targeted companies

(Rounds 1-2)

Cases closed

Cases in error

Percentage non-

compliance


Issued (dollars)


(dollars)

Penalties (dollars)

Total (dollars)

84 84 40 48% $657,514 $2,127,921 $64,650 $2,850,085

• The results of the first 2 rounds show that some goods classified as t-shirts do not qualify under NAFTA

Tariff Classification Fresh Cut Flowers · Fresh Cut Flowers • The risk identified is that fresh...

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