Customs, Tariffs, and Trade Compliance
Customs, Tariffs, and Trade Compliance tests whether you can classify goods, value them correctly, prove origin, and keep the transaction compliant. These are the most technical, most fact-specific questions on the exam, and small errors are heavily penalised.
Classification
Goods are classified under the WCO Harmonized System. The first six digits are internationally harmonised; countries add national digits. The General Interpretative Rules are applied in order: GRI 1 by heading text and section notes, then GRI 2–5 for incomplete goods, mixtures, and packing, and GRI 6 for subheadings. Where classification is uncertain, request an advance or binding ruling.
Valuation
Under the WTO Customs Valuation Agreement the primary basis is transaction value, adjusted for:
- selling commissions, but not buying commissions;
- assists (materials, components, moulds, engineering supplied free or at reduced cost);
- royalties and licence fees payable as a condition of sale;
- packing costs and proceeds of resale;
- transport and insurance to the place of importation where the country uses a CIF basis. Fallback methods run in sequence: identical goods, similar goods, deductive value, computed value.
Origin
Wholly obtained, or substantial transformation measured by change in tariff classification, regional value content, or a specific process. Free-trade access requires a valid proof of origin - certificate, self-certification, or exporter's declaration - plus records to support it.
Worked example
FOB USD 20,000; international freight 1,500; insurance 100; royalty paid as a condition of sale 800; buyer-supplied mould (assist) 1,200; selling commission 300; buying commission 500. Buying commission is excluded. Dutiable value = 20,000 + 1,500 + 100 + 800 + 1,200 + 300 = 23,900. At 6% duty the assessment is 1,434. Note that the duty base grows with every adjustment, so a wrongly included item inflates duty on every subsequent consignment if the error is repeated.
Traps that cost marks
- Including buying commissions or excluding assists and royalties.
- Assuming a national 8- or 10-digit code applies in another country.
- Claiming FTA preference without evidence to support origin.
- Overlooking anti-dumping and countervailing duties, quotas, or export controls.
- Ignoring marking, labelling, and forced-labour import rules.