A defense supplier is importing equipment from their OEM overseas. The overseas supplier lists each line item on their export paperwork, along with a relevant tariff / H.S. code. The importer reviews the paperwork and gives approval for import customs clearance. However, the goods being imported were a complete system, with each component listed independently on the paperwork, each with its own tariff classification. By applying the individual H.S. codes, the shipment attracted close to USD $75,000 in duty. Because we work to understand our clients product and imports, we were able to discuss with them and determine that the shipment was a complete system (dismantled). By using the correct H.S. code which covered this system, the shipment had a 0% duty rate (duty free); thereby in effect saving them $75,000 in unnecessary outlay of duty.
- Lack of skilled staff to properly review and examine H.S. classifications
- Relying on the overseas paperwork for import customs clearance
- Relying on a generic customs broker, who just files the paperwork as presented
- Unnecessarily paying duty on imports
- No pre-planning for the possible duty implication at time of import, therefore going over budget by not pre-determining correct landed costs
The Strategic Solution
- Because we understand our clients and their products, we are able to better review import paperwork and analyze import classifications
- We have open dialogues with our importers to be sure the entries are filed correctly, with the best H.S. code; sometimes duty is necessary, but in this case it was not
- Provided training on H.S. classifications and imports to help the importer understanding the effect of selecting the best H.S. code for their product on a shipment to shipment basis
- Worked with them to review other imports and provide the Customs brokerage for future shipments to ensure compliance and follow through
- Helped our client understand true landed costs, and allow them to stay on budget by discussing imports and tariff classifications
How We Can Help
As a full service compliance & logistic provider, we build a relationship with our clients in order to fully understand the requirements and provide unique solutions to the Aerospace and Defense industries. Our understanding of tariff classifications helps our clients to keep money in their pocket and not pay unnecessary duty at time of import. With compliance as the first step, we can help our clients save time and money on import clearance, in order to keep their production and customer deliveries on budget.