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New EU Regulations: Transport Companies Face Duty for Correct HS Code Classification

TSLNew EU Regulations: Transport Companies Face Duty for Correct HS Code Classification
  • Polish transport companies must prepare for changes introduced by new EU regulations;
  • Responsibilities related to the classification of goods are changing, with attention needing to be paid to HS codes;
  • If a carrier clears goods under the wrong code, they may have to pay a penalty.

Knowledge of the correct classification of goods is the basis for proper customs declaration in export and import customs procedures, as well as for determining the rate of customs duties and VAT in sales within the EU. The basis for declaring goods when importing or exporting from the European Union is the Combined Nomenclature (CN) and the Common Customs Tariff.

The European Union has begun implementing the Import Control System (ICS2), which is designed to tighten trade with third countries. The new regulations impose higher responsibilities on transport companies. For instance, the carrier must have complete information about the parties to the transaction and the HS codes of goods. Remember that there can be hundreds of customs codes in one shipment, such as in e-commerce shipments,” explains Joanna Porath, owner of the customs agency AC Porath.

Companies clearing goods under the wrong code

Transport companies may not even be aware that new regulations require them to correct the classification of goods.

Clients often repeat the same mistakes, e.g. by clearing a certain good under a specific HS code where the duty rate is more preferential for the importer. After the change in regulations, it is the carrier who, at the time of bringing goods into the Customs Territory, will be responsible for correctly specifying the customs tariff code to the HS level,” says Joanna Porath.

Companies should review the customs tariff codes they use and the correctness of tariff classification in this regard by implementing a so-called tariff policy.

In case of detection of discrepancies between the codes and the actual state by customs, the authorities have the right, in administrative proceedings, to charge the importer with the difference between the duty resulting from the application of the more favorable customs tariff code and the correct code. Then a decision is issued to impose the amount along with penalty interest deriving from separate provisions,” adds Joanna Porath.

Binding Tariff Information simplifies the classification of goods

A facilitation for importers and exporters is the Binding Tariff Information (BTI), which is official and free information about the tariff classification of goods, ensuring the correct application of the commodity nomenclature for customs purposes within the EU.

An application for the issuance of BTI is submitted electronically through the Platform of Electronic Services of Money and Customs (PUEC), and refers to customs formalities and goods imported into or exported from the European Union. Binding Tariff Information (BTI) are decisions on the tariff classification of goods, i.e. determining the proper Customs Tariff code for a particular good. The decisions issued on the application of BTI are valid for 3 years from the date of their issuance,” explains Joanna Tyminska from the Customs Academy AC Porath.

The addressee of a BTI decision must refer to the customs code resulting from it for the designated goods throughout the duration of the decision, regardless of whether the customs declaration is made in Poland or any other customs office within the entire Customs Territory of the EU.

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