Feb

21

Unhelpful Suggestion of the Day

Posted by at 6:36 pm on February 21, 2017
Category: BIS • CCL • Customs • DDTC • HTSUS • USML

Jardins Tuliere [sic] Statue by Eksley [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/dRYGik [cropped]

An interesting article [subscription required] in the Journal of Commerce reports survey results indicating that one-third of all U.S. e-commerce merchants report that they have incurred fines and delays from regulatory agencies in connection with their imports and exports.  Within that group, 29 percent of the companies surveyed stated that they had been subject to fines in connection with cross-border shipments. With respect to delays, they cited the Bureau of Industry and Security, and the Directorate of Defense Trade Controls, at 32 percent and 30 percent, respectively. That’s a surprising figure by any measure, if true and representative.

But more astonishing and surprising is the suggestion that the JoC article author proposes to fix this:

The task of ensuring trade compliance is also becoming more difficult, as 48 percent said they now do business in more than 50 countries.Trade regulations are constantly increasing and growing, necessitating agile and adept global trade management platforms, empowered by a combination of technology, trade compliance intelligence, and automation.

These systems can help properly classify goods based on descriptions from product catalogs, country of export, and country of import. Strong and reliable classification can help avoid hang-ups at Customs agencies. … In addition to helping avoid run-ins with these agencies, automation is helpful because it allows shippers to track the costs and length of these delays, allowing for better forecasting and business planning.

Don’t get me wrong, automation is often a good idea. But to suggest that the HTSUS, USML Categories or ECCN numbers can be assigned to a product through automation is, well, preposterous. It is something that can only be suggested by someone who has never looked at the USML, the CCL or the HTSUS. Maybe this will be possible sometime in the future when cars fly and robots are butlers. But right now, it’s not a feasible solution.

Photo Credit: Jardins Tuliere [sic] Statue by Eksley [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/dRYGik [cropped]. Copyright 2009 Eksley

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Copyright © 2017 Clif Burns. All Rights Reserved.
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6 Comments:

Amen, Brother Burns! There is no algorithm that can correctly apply the principles of statutory construction, which the CIT and Fed Circuit routinely apply to questions of HTS classification, let alone intelligently apply past precedent and the Explanatory Notes. Automated systems can be helpful in narrowing down the choices, but in cases of ambiguity in the HTS or when considering a new product not clearly anticipated by the HTS, there just is no substitute for an intelligent, experienced, well-trained human or trade lawyer.

Comment by Mike Deal on February 22nd, 2017 @ 12:02 pm

I hate to break it to you Clif, but the notion that classification automation is preposterous is so last decade. Large companies using complex programs for things like HTSUS assignment validate this approach statistically by proving lower rates of error (via sampling or even customs contacts) compared to human classification.

Comment by Joe Insider on February 23rd, 2017 @ 5:23 pm

    If you can find a program that will automate the determination of whether something was “specially designed” simply by inputting product specs, then I will agree with you. I do agree that there is a better chance this will work with a defined subset of products and the HTSUS.

    Comment by Clif Burns on February 25th, 2017 @ 11:59 am

I’ll cede that the accuracy of automation depends on the quality of the data, and the “specially designed” question can certainly require more information to answer than finding a reference to MIL-SPEC somewhere in the product description. I wonder if an approach similar to denied party screening, where automation software flags higher-risk items for human review, may be more appropriate in those cases.

Comment by Joe Insider on February 27th, 2017 @ 12:50 pm

It appears that many of the folks at DDTC and OFAC who occupy substantive decision making positions are not actually government employees sworn to protect and defend the Constitution, but are the employees of contractors whose only duty is to boost revenue of their employer. I have a lot of problems with submitting proprietary information to be reviewed by potential competitors.

Comment by Hillbilly on February 27th, 2017 @ 9:14 pm

    Preliminary classification determinations requested by CBP are, indeed, being decided by contractors over at DDTC.

    Comment by Clif Burns on February 28th, 2017 @ 8:52 am