--- name: customs-duties-workflow-base description: "Tier 1 workflow base for customs duty skills. Covers the customs declaration lifecycle from origin determination, HS classification, valuation, preference, special procedures, through to release for free circulation. Workflow architecture only — no country-specific tariff rates or detailed special procedure mechanics. MUST be loaded alongside a country/region customs content skill (EU UCC, US CBP, UK CDS post-Brexit, etc.). Assumes a licensed customs broker, AEO/CTPAT certified party, or in-house customs manager files the declaration. Does NOT cover: CBAM (see cbam-carbon-border-adjustment), import VAT (see country VAT skills), excise duties (see excise-tax-workflow-base), or anti-dumping / countervailing duty investigation procedure (only their tariff effect at point of declaration)." jurisdiction: GLOBAL domain: foundation tax_year: 2025 --- # customs-duties-workflow-base ## What this file is The Tier 1 workflow base for customs duty skills. Country content skills load on top. ## Section 1 — Audience and assumptions - **Audience and assumptions** — This base assumes: The declarant is an importer / exporter / customs representative; The shipment has been physically moved or is being placed under a customs procedure; A licensed customs broker or in-house customs manager files the declaration; The HS Code is determined under the WCO Harmonized System and applied at the national tariff level ## Section 2 — Lifecycle runbook ### Step 1 — Document the transaction - Commercial invoice (supplier, buyer, consignee) - Packing list - Bill of lading / airway bill / CMR - Certificate of origin (preferential or non-preferential) - Transport documents - Sanitary / phytosanitary / safety certificates - Licenses (dual-use, controlled goods) - CBAM-relevant emissions data (EU imports of in-scope goods) ### Step 2 — Determine HS classification - **HS classification levels** — [T1] Use WCO Harmonized System nomenclature at the level required by the destination country: 6 digits — WCO common level; 8 digits — typical national tariff (e.g., EU Combined Nomenclature); 10 digits — TARIC or US HTS additional precision - **General Rules for the Interpretation (GRI 1-6)** — Apply the General Rules for the Interpretation (GRI 1-6) of the HS: 1. Headings and chapter notes 2. Incomplete / unassembled goods classify as complete 3. Mixed goods classify by essential character or last-in-numerical-order 4. Goods most akin 5. Containers / packaging 6. Comparable level subheadings ### Step 3 — Determine origin - **Non-preferential origin** — country where last substantial transformation occurred; used for trade statistics, anti-dumping, trade remedy, marking, quota _([T1])_ - **Preferential origin** — origin granting reduced or zero duty under a free trade agreement (FTA), generalised scheme of preferences (GSP), customs union _([T1])_ - **Preferential origin tests** — Wholly obtained (mining, agriculture, fishing); Sufficient transformation per the FTA's specific rules (change in tariff heading, value-added percentage, specific manufacturing operation); Cumulation (bilateral / diagonal / full / regional); Direct transport / non-manipulation _([T1])_ ### Step 4 — Determine customs value - **WTO Customs Valuation Agreement — six methods in hierarchical order** — 1. Transaction value of the imported goods (the price actually paid or payable) — primary method 2. Transaction value of identical goods — already accepted by customs 3. Transaction value of similar goods 4. Deductive value (resale price method) 5. Computed value (cost-plus method) 6. Fallback / reasonable means consistent with WTO _([T1] WTO Customs Valuation Agreement)_ **Adjustments to transaction value (Article 8 WTO Valuation Agreement)** _([T1] Article 8 WTO Valuation Agreement)_ | Add | Subtract | | --- | --- | | Commissions / brokerage paid to buyer's agent | Buying commissions | | Container costs | Charges for construction / assembly / maintenance after importation | | Packing | Duties and taxes payable in destination | | Assists (free or below-cost goods/services provided by buyer to seller) | Interest paid (if separately identified) | | Royalties / license fees related to imported goods that buyer must pay as condition of sale | | | Resale proceeds accruing to seller | | | Transport, loading, handling, insurance to the place of importation | | ### Step 5 — Apply tariff - **Apply tariff** — [T1] Base most-favoured-nation (MFN) rate per WTO commitments; Preferential rate where origin satisfied and certificate / declaration provided; Anti-dumping / countervailing duty if applicable; Tariff suspensions (autonomous suspensions, EU); Tariff quotas (in-quota / out-of-quota duty rates); Safeguard measures; Retaliatory duties (Section 301 US; EU retaliation lists) ### Step 6 — Apply special procedures (where applicable) - Inward processing — duty-free import for processing and re-export - Outward processing — re-import after processing abroad with duty only on added value - Customs warehousing — duty deferral - Free zones / FTZ — duty-free storage and processing - Temporary admission / ATA Carnet — duty-free import for exhibitions, samples, professional equipment - End-use — reduced duty for specific use - Transit (T1 / T2 / TIR) — movement under customs control ### Step 7 — Prepare and lodge declaration - Customs declaration in destination country's electronic system (EU AES/IES, US ACE, UK CDS, China MIPS, India ICES, etc.) - Single Administrative Document (SAD) for EU; entry summary for US ABI - Pre-arrival lodgement where required (24-hour rule for ocean to US, EU ICS2) ### Step 8 — Pay duty and VAT/GST - Duty paid on release OR deferred under deferment account (with bank guarantee) - Import VAT/GST — paid at import OR self-assessed under postponed VAT accounting (EU PVA), reverse charge ### Step 9 — Post-clearance audit and amendment - **Post-clearance audit and amendment** — [T1] Customs authorities have 3-5 years post-clearance to audit. Maintain documentation. Voluntary amendment (corrective declaration) reduces penalties. ## Section 3 — Customs regimes by region ### 3.1 European Union - UCC (Union Customs Code) — Regulation (EU) 952/2013 in force from 1 May 2016 - AEO (Authorised Economic Operator) — trusted-trader certification (AEO-C customs, AEO-S security, AEO-F combined) - Centralised clearance — declaration in one MS for goods imported into another - ICS2 (Import Control System 2) — pre-arrival risk analysis - CBAM (Carbon Border Adjustment Mechanism) — see `cbam-carbon-border-adjustment.md` ### 3.2 United States - CBP (Customs and Border Protection) under Title 19 USC - ACE (Automated Commercial Environment) declaration system - C-TPAT trusted trader program - Section 301 tariffs (China) - Section 232 tariffs (steel, aluminum) - De minimis USD 800 per shipment ### 3.3 United Kingdom (post-Brexit) - CDS (Customs Declaration Service) replaced CHIEF in 2023 - UK Global Tariff (UKGT) since 1 January 2021 - Northern Ireland Protocol / Windsor Framework — separate rules for NI imports from GB - Inward / outward processing — UCC mechanics retained - Postponed VAT accounting — VAT deferred to VAT return ### 3.4 Other major regimes - Canada — CBSA with CARM system rollout 2024-2025 - Australia — Border Force with ICS - Japan — Japan Customs with NACCS - China — General Administration of Customs with GACC - India — ICEGATE with Customs Act 1962 - Brazil — Receita Federal with Siscomex / Portal Único do Comércio Exterior (Pucomex) ## Section 4 — Reviewer brief 1. Shipment register - Commercial documents - HS classification with GRI rationale - Origin determination with supporting certificate - Customs value with WTO method and Article 8 adjustments 2. Tariff calculation - Base MFN rate - Preference applied - ADD / CVD applied - Tariff quotas allocated - Total duty 3. VAT / GST on importation - Base value (customs value + duty + other charges) - VAT rate - Postponed accounting status 4. Special procedure usage - Procedure code - Bond / guarantee status - Discharge plan 5. Risk register - Trade compliance flags (controlled goods, sanctioned parties, dual-use) - ADD / CVD investigation status - CBAM in-scope goods 6. Reviewer questions — [T2]/[T3] items ## Section 5 — Self-checks (15) 1. [ ] HS classification supported by GRI reasoning, binding tariff information (BTI) or equivalent if available 2. [ ] Origin determination supported by certificate or supplier declaration 3. [ ] Customs value method correctly applied per Article 8 hierarchy 4. [ ] Royalties / assists / commissions / freight added per Article 8 5. [ ] Preference verified against current FTA text and product-specific rules 6. [ ] ADD / CVD / safeguard rates current and applicable 7. [ ] Tariff quota allocation verified 8. [ ] Special procedure code correct 9. [ ] Sanctions / dual-use / controlled-goods screening completed 10. [ ] Importer-of-record identification correct 11. [ ] Pre-arrival electronic submission lodged within window 12. [ ] CBAM scope checked for EU imports 13. [ ] Postponed VAT accounting election applied where eligible 14. [ ] Bond / guarantee in place for special procedures 15. [ ] Output flags every [T2]/[T3] item for reviewer judgement ## Section 6 — Global refusal catalogue **Global refusal catalogue** | Refusal | Trigger | | --- | --- | | R-CUST-1 | Sanctioned party / OFAC / EU restrictive measures match | | R-CUST-2 | Controlled / dual-use goods without licence | | R-CUST-3 | ADD / CVD investigation active and country uncertain | | R-CUST-4 | HS classification ambiguous — request BTI / equivalent | | R-CUST-5 | Preference origin contested or supplier declaration absent | | R-CUST-6 | Customs value contested (related-party transaction, missing royalty info) | | R-CUST-7 | Anti-circumvention investigation against country of origin | | R-CUST-8 | CBAM in-scope without verified emissions or default-value-cap exceeded | - **R-CUST-1** — Sanctioned party / OFAC / EU restrictive measures match - **R-CUST-2** — Controlled / dual-use goods without licence - **R-CUST-3** — ADD / CVD investigation active and country uncertain - **R-CUST-4** — HS classification ambiguous — request BTI / equivalent - **R-CUST-5** — Preference origin contested or supplier declaration absent - **R-CUST-6** — Customs value contested (related-party transaction, missing royalty info) - **R-CUST-7** — Anti-circumvention investigation against country of origin - **R-CUST-8** — CBAM in-scope without verified emissions or default-value-cap exceeded ## Section 7 — Slot contract for country customs skills [TARIFF SYSTEM] - Nomenclature (CN, HTS, UKGT, etc.) - Tariff portal URL - Update frequency [FTA PORTFOLIO] - Active FTAs and product-specific rules portal references - GSP/GSP+/Everything But Arms applicability [VALUATION] - National rules supplementing WTO Valuation Agreement - Related-party transaction rules [PROCEDURES] - Special procedure codes - AEO / trusted trader equivalent [FILING] - Electronic declaration system - Pre-arrival lodgement window - De minimis thresholds (low-value consignment) [OVERLAYS] - CBAM (EU) - Section 301 / 232 (US) - Trade remedy investigations active [PENALTIES] - Misclassification penalties - Origin misstatement penalties - Voluntary disclosure relief ## Section 8 — Disclaimer This workflow base produces working papers for review by licensed customs practitioners. Customs declarations are legally binding; misstatements carry criminal as well as civil penalties. Every output must be reviewed and signed off by a licensed customs broker or in-house customs manager before lodgement. The most up-to-date, verified version of this workflow base is maintained at [openaccountants.com](https://openaccountants.com). ## Section 2 — Lifecycle runbook 0. **Step 1 — Document the transaction** — Document the transaction