What is a "Binding Tariff Information?"

A BTI is a ruling issued to an importer who wants to gain certainty on a classification matter.

Each BTI will bear the commodity code for the product in question and the start date for the validity of the information. It will carry a unique reference number and will show the name and address of the BTI holder. It will show an explicit description of the goods to which it relates and will show the basis of the legal justification for the decision.

BTI is an important tool as there are over 16,000 different commodity codes for goods to be classified under when imported from outside the European Union (EU). Many of these codes have very thin dividing lines. BTI are used for:

•  Purposes of determining import/export duties
  
•  Calculating export refunds
  
•  Calculating amounts granted for imports/exports within the Common Agricultural Policy (CAP)
  
•  Using import, export or advance fixing certificates for the acceptance of the customs declarations

The customs regulations are complex and little understood by even the biggest players in international trade. However, the courts have placed a significant burden on you to get to grips with these regulations. 

What are the potential implications?

Most freight forwarders act as direct agents, with responsibility for accuracy of the customs declarations and customs debts resting solely with you the importer.

In the UK any mistake you make can result in HMRC taking the following action against you:

• Financial penalties of up to £2,500 per innocent mistake;
  
• The removal of any customs duty relief schemes you use;

• Lengthy and time consuming investigations;
  
• Seizure of your goods and any vehicles you use to carry them.

Although the European Union has one set of harmonised rules applying to all 27 Member States, the implications of you failing to meet your obligations can differ between members.

The sheer volume of imports coming in to the EU in any one day means the customs authorities exercise minimal control on your imports at time of arrival. Instead they look to audit your compliance through visits to your business. They can look back over the last three years of imports, which often mean your small errors can snowball in to a significant exposure.

There are developments taking place in the US to kill off one of the classic customs planning arrangements that allows you to strips any intermediaries' profits out of a charge to duty. If successful, there is a risk of this approach spreading to other countries and impacting your landed costs.

A new European Union (EU) law came in to effect on 1 January 2008 that leads to a two-tier international trade community. Will you become a trusted business enjoying quicker, low cost customs clearance or a second-class citizen of the international trade community subject to additional scrutiny, suffering slower customs clearance and increase costs?