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.

Section 2 — Lifecycle runbook

0. Step 1 — Document the transaction — Document the transaction