Binding Tariff Information

14 December 2011

A Binding Tariff Information (BTI) ruling is a legally written request from 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.

There is also provision for importers to request of the customs authorities “Binding Origin Information” (BOI) if they are unsure how to determine the origin of their goods.

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 solely for:

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

To whom does BTI apply?

A BTI supplied by Customs Authorities is binding upon the competent authorities of all Member States under the same conditions.

Once a decision has been made, it is sent to an electronic pan-European database of BTI that stores all decisions by national customs authorities and is accessible by the customs authorities of all Member States for future reference. The applicant is given the opportunity to request certain information on the form is treated as confidential and is not included in the BTI database.

It is important to remember though that BTI is non-transferrable and only applies to the BTI holder specified in the decision document. There is no provision for corporate affiliates of the holder to rely upon the information (Case C-495/03 Intermodal Transports). This has therefore led to a number of disputes and cases where one Member State issues a BTI but another disagrees with the circumstances in which it was granted and therefore the issue has had to be referred to the ECJ for clarification.

 

How long is a BTI valid for?

A BTI is valid for 6 years regarding tariff information whereas a Binding Origin Ruling (BOI) is only valid for 3 years.

However, under the Modernised Customs Code a BTI will only be valid for 3 years.

Can a BTI be annulled or cease to be valid?

When applying for a BTI, there is no margin for error. Supplying incorrect or incomplete information supplied can result in the BTI being annulled.

Furthermore, there are three situations with regard to invalidity of BTI:

• Where a Regulation is adopted and the information in question no longer conforms to the law that it lays down;

• Where the information in question is no longer compatible with the interpretation of one of the nomenclature forming part of the Tariff by:

- virtue of an amendment(s) to the Explanatory Notes of the Nomenclature;
- a ruling of the ECJ or at international level;
- a classification opinion of the WTO; or
- an amendment to the Explanatory Notes of the Harmonised System (HS).

The holder of the information is notified of the withdrawal or amendment of the BTI in accordance with Article 9 (where conditions for their issue are not complied with or fulfilled.) It is important to note that BTI’s which are invalidated by virtue of an amendment or court ruling can be relied upon for up to 6 months after the date of its publication or notification subject to certain conditions including having concluded binding contracts for the purchase or sale of the goods in question on the basis of the BTI before any measure was adopted.

How do I apply for a BTI?

You can apply for BTI using form C103 which is available from the HMRC website. There is also a facility for applying for BTI online.

What if I disagree with a BTI?

If you receive a BTI that you disagree with, you are legally entitled to request a review from HMRC. You are also entitled to make an objection to the Financial Tribunal.

What do I need to do if I obtain a BTI?

Importers must have a system in place to ensure that once a BTI is obtained, reference is made to it on customs declarations (Box 44 of the Single Administrative Document (C88)). If you have an agent or other representative that completes customs declarations on your behalf you should advise them of the existence of the BTI and advise them of the correct procedure.

How can International Trade Solutions help?

Completing a BTI is a quite straight forward administrative task.

However, if the classification of your imports is unclear and the difference between competing classifications will have a material impact on your business then it makes sense to invest in putting forward convincing arguments supporting classification to the code attracting the lower legitimate rate of customs duty.

International Trade Solutions has considerable experience and success in applying for and obtaining favourable legal rulings. Our success is based on being able to:

• Apply over 17 years of customs classification and knowhow to the task;
• Access a wide-range of specialist materials including Tariff Explanatory Notes, case-law, previous rulings, internal guidance notes and committee hearings; and
• Tap into our own proprietary database and tools developed from previous client projects.

We have worked with many clients to gain favourable rulings and then recover customs duties previously overpaid on these imports going back up to three years.

Contact ITS

Visit our Website or call us on 01905 619229 to find out more ways we can help to reduce your customs costs. Alternatively, email us now to arrange a FREE meeting to explore your options and tactics in more detail.

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