Main Idea: Individuals or companies that do not possess customs broker licenses and recommend HTSUS subheadings for customers to use when making entry violate the customs laws when (i) customers request subheadings to use and (ii) unlicensed individuals or companies provides specific subheadings for specific goods that will be subject to entry when customers import the goods.
In H290535 (Sept. 29, 2022), CBP discussed violations of customs business and broker rules, regarding a company’s HTSUS classification recommendations to its customers. At issue was Hampton Products International Corporation (Hampton’s) practice of providing HTSUS subheading recommendations for customers. Hampton supplies consumer goods to big box stores and when Hampton was the supplier, the customer acted as importer of record (IOR). Customers requested that Hampton provide the HTSUS subheadings for the merchandise the customers imported. Hampton provided HTSUS subheadings to customers, and included disclaimers stating that the recommended subheadings were for “informational purposes only.”
CBP determined that Hampton violated 19 U.S.C. § 1641(b)(1) by conducting customs business without a license, and that Hampton’s disclaimer did not release the company from the need to obtain a customs broker’s license to provide HTSUS tariff subheadings to its customers.
CBP’s decision hinged on the following:
- Hampton provided specific classification subheadings for specific goods sold to and then entered by its customers. CBP quoted HQ 115278 (Nov. 13, 2001), which stated that giving advice about how to classify a good is a necessary part of the preparation process for documents that will eventually be filed with CBP. CBP found Hampton’s actions went beyond the allowable general advice about classifying merchandise because Hampton provided specific subheadings on specific goods that its clients ordered, and for which the customers would file entry documentation. Further, because Hampton’s customers requested the subheadings before importing the merchandise, CBP found there was a strong possibility that the customers would use subheadings Hampton provided on the entries filed with CBP.
- CBP acknowledged that under certain limited circumstances, providing a disclaimer advising that classification must be completed by a licensed customs broker may allow an unlicensed entity to provide classification guidance for others. CBP referenced HQ H272798 (Jan. 26, 2017), where an unlicensed company prepared a database of HTSUS subheadings that customers used as a reference. CBP found that Hampton went beyond something like a permissible tariff classification database used for general reference purposes by providing specific HTSUS subheadings for specific merchandise purchased for importation. CBP found that Hampton’s disclaimer did not absolve the company of the violation.