Understanding Binding Tariff Information (BTI).

The importance of correct commodity codes

When engaging in international trade, accurately classifying your products using the correct commodity code is paramount. This code determines import duties, taxes, and potential licensing requirements. Using the wrong code can lead to financial penalties, delays, and legal complications.

The impact of incorrect commodity codes

Mistakes in commodity codes often result in unexpected customs interventions. Authorities may flag discrepancies, leading to investigations and potential adjustments. These corrections can involve higher duties, anti-dumping measures, or additional permits, causing significant disruptions to your supply chain.

What is a Binding Tariff Information (BTI)?

To mitigate these risks, businesses can apply for a Binding Tariff Information (BTI) from customs authorities. A BTI offers legal certainty regarding the classification of your goods, valid for 3 years. By obtaining a BTI, you gain confidence in the applicable customs duties and compliance with import/export regulations. This proactive approach helps prevent costly errors and ensures smooth customs clearance.

Risks associated with BTIs

While a BTI provides valuable certainty, it's essential to be aware of potential challenges. Customs authorities may assign a different commodity code than anticipated, resulting in higher duties. Furthermore, once issued, a BTI is binding for 3 years, even if you disagree with the classification. However, you have the right to appeal the decision if necessary.

BTI refund opportunities: maintain records

If a BTI confirms your expected commodity code but you previously used an incorrect one, you may be eligible for a refund of overpaid duties. It's crucial to maintain detailed records for up to 3 years to support your refund claim.

Transitional period in case of BTI withdrawal

In certain circumstances, the European Commission can withdraw a BTI. However, businesses often benefit from a transitional period, allowing them to adapt to the new classification without immediate financial implications.