Duty Protests

Saving money through Customs protests

Trade compliance professionals often think about the high costs of non-compliance. We focus our attention on complying with various laws and regulations in order to avoid costly fines and penalties. And rightly so! But have you ever considered that there might be actual savings that can be achieved while pursuing compliance? Welcome to the world of U.S. Customs Protests.

What is a protest?

Put your magic markers and cardboard away. For this type of protest, you don’t have to make a sign and take to the streets. In the world of imports, a “protest” is a formal objection to certain types of official action taken by U.S. Customs and Border Protection (CBP). There are specific guidelines and timelines for filing protests with CBP that cannot be ignored. Further, there are limitations as to the type of action that an importer may challenge in a protest. For example, a common action to protest is the classification which is the Harmonized Tariff Schedule Number (HTSUS) for an item and its associated duty rate. If an importer disagrees with the classification of an item, they may challenge that classification via a protest. If Customs agrees with the importer, then the importer may be able to receive a refund for any overpayment of duties along with interest. (This is per 19 U.S.C. 1514, Protest Against Decisions of Customs Service.)

Example of a successful protest

One example of a successful protest is shown in a recent ruling from CBP. In ruling H279898 (dated 04/05/17), CBP reviewed the classification of the Fitbit Charge, Fitbit Charge HR and Fitbit Surge devices. These items were originally entered and classified as “other measuring and checking instruments, appliances and machines” (HTSUS No. 9031.80.80), which carried a duty rate of 0.8-percent of the dutiable value of the goods. The importer protested this classification arguing that these items are more properly classified as “other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network” (HTSUS No. 8517.62.00), which is a duty-free HTS. CBP agreed, and the importer’s protest was granted resulting in the importer being able to receive refund for any overpayment of duties paid. This may not seem like a big difference, but when you’re talking about thousands (or millions) of dollars worth of imported goods, the overpaid duties can be substantial.

What else should I know about Customs protests?

Before you start adding up all the dollars you can save, keep in mind some helpful tips when considering to file a protest for import entries with CBP:

  • Protests require a careful review of both the HTS and the Customs Regulations (19 CFR) to determine if there is any opportunity, as well as for preparing any protests and the submission to CBP.
  • Protests may be filed electronically in the ACE Protest module, or by paper submission at any CBP port of entry.
  • Protests are normally filed using CBP Form 19.
  • Within 180 days of liquidation, the importer, their broker, or another third party expert can contest CBP decisions relating to imported merchandise with a protest under section 514 of the Tariff Act of 1930.

Importers should be aware of this program and evaluate if there may be any savings that you can achieve.

Need help? We have Licensed U.S. Customs Brokers on our team who specialize in analyzing import entries and saving you money through protests. Schedule a No-Charge Consultation and let’s discuss what we can do for you.