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Q3 Regulatory Updates

Stay up to date on Q3 regulatory updates, including Brexit, ACE, HTSUS Chapter 62, and CBP Informed Compliance notifications. 

HTSUS Chapter 62:  Woven Apparel Tariff Changes

The tariff classification of many woven apparel products changed effective August 22. These changes are part of the International Trade Commission’s (ITC) modification of the Harmonized Tariff Schedule of the United States(HTSUS) to implement new tariff classification provisions included in the Trade Facilitation and Trade Enforcement Act (TFTE) of 2015.

Specifically, the TFTE introduced new eight-digit and ten-digit tariff classifications for certain “recreational performance outerwear” in Chapter 62.  “Recreational performance outerwear” covers qualifying trousers (including ski or snowboard pants as well as ski or snowboard pants intended for sale as parts of ski suits), coveralls, bib and brace overalls, jackets (including full zip jackets, ski jackets, and ski jackets intended for sale as parts of ski suits), and windbreakers and similar articles (including padded, sleeveless jackets).  To accommodate these new HTSUS classifications, the ITC amended tariff classification of many common woven apparel products, increasing the number of ten-digit tariff classifications in Chapter 62 from 974 to 1,287.


CBP Informed Compliance Notifications

U.S. Customs and Border Protection (CBP) Regulatory Audit recently began issuing Informed Compliance notification letters to the importing community.  CBP stresses that the letters are meant to remind importers of their legal obligations and give them a chance to review their import compliance activities before CBP commences any validation efforts, such as an audit.  CBP suggests that recipients of the letter can expect to be the subject of a CBP audit—either a general Focused Assessment (FA) or a Quick Response Audit (QRA) —based on CBP’s analysis of the importer’s risk profiles. If an importer has high-risk profiles across a number of compliance areas, (i.e., frequent errors involving tariff classification, value or country of origin, and priority trade issues such as antidumping and countervailing duties (AD/CVD), intellectual property rights, textiles/apparel or free trade agreement claims), then CBP will likely conduct an FA.  Conversely, if the importer’s risk is limited to one particular area, such as classification or value, CBP will likely conduct a QRA.

Importers should consider proactive measures such a Compliance Risk Assessment to test and measure their compliance level and to evaluate internal controls.   MIQ’s Global Trade Management (GTM) professionals can assist with this Assessment


ACE Updates

CSMS# 16-000794 (September 8, 2016) announced that U.S. Customs and Border Protection (CBP) has been assessing stakeholder readiness for the mandatory transition of post-release capabilities in the Automated Commercial Environment (ACE) and has heard from key industry partners on the need for additional flexibility in this transition. As a result, CBP is moving this date from October 1, 2016 to October 29, 2016 to allow additional time for our trade stakeholders to transition these capabilities to ACE.

While CBP has implemented the capability for most Partner Government Agency (PGA) data to be filed electronically in ACE, trade users may continue to file a combination of CBP electronic data and PGA paper forms where that is currently permitted.  

  • APHIS Lacey, NHTSA, FDA and as of 9/20/16, NMFS, data is required to be filed electronically in ACE.  
  • For PGA data that is not required to be filed electronically in ACE, filers may file using options currently specified as available for those PGAs.
  • CBP will continue to coordinate and communicate as required the conclusion of PGA pilots via public notices.

This adjustment affects the mandatory filing of liquidation, drawback, reconciliation, duty deferral, collections, statements, and automated surety interface.



Now that BREXIT is a reality, what happens next is unclear.   It is generally assumed that the UK will have to have some form of relationship with the remaining EU Member States, as well as with third countries. At the moment, there is neither the legal or political framework in the UK for deciding what such a relationship will look like; which body of laws, EU or UK will apply; or, when the two-year process of withdrawal governed by Article 50 of the Treaty on the European Union will begin.

Most, if not all, trade agreements EU is party to will cease to benefit the UK now that it has voted to leave the EU.  In addition to renegotiating trade concessions with 160+ other WTO Contracting parties in order to remain a member of the WTO, it is widely assumed that the UK will cobble together a series post-BREXIT free trade agreements with the EU and with third countries, perhaps including the United States.  This process almost certainly will take more than the two-years afforded by Article 50.