When importing goods into the European Union (EU), one of the most critical steps is determining the correct tariff classification for your products. The tariff classification, defined by the Harmonized System (HS) code, dictates the applicable customs duties, taxes, and regulatory requirements. However, with over 5,000 commodity codes in the EU’s Combined Nomenclature (CN), classifying goods can be a daunting task. Misclassification can lead to costly delays, penalties, or even legal disputes.
To mitigate these risks, we recommend businesses apply for a Binding Tariff Information (BTI) ruling. A BTI provides legal certainty on the correct classification of goods.
A BTI is a legally binding decision issued by the customs authorities of an EU country. It provides a definitive tariff classification. Have a BTI ensures consistency and transparency in your customs procedures. Once issued, the BTI is valid across all EU member states for a period of three years. The EU Member States issue approximately 40,000 decisions per year.
The Online Binding Tariff Informationconsultation database is one of the most consulted information sources on classification, with almost 50 million site visits per year.
Key benefits of obtaining a BTI include:
The European Commission guidelines for the Binding Tariff Information (BTI) process
Key highlights:
• Introduction of the Electronic Binding Tariff Information (EBTI) Specific Trader Portal
• Clarification of legal provisions in customs legislation
• Enhanced guidance on drafting and issuing BTI decisions
• Measures to prevent BTI shopping and handle divergent views
These guidelines will contribute to harmonizing national practices and provide a comprehensive overview of the BTI process under the European Binding Tariff Information system.
A BTI is particularly useful in the following scenarios:
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The process of obtaining a BTI involves several steps. Here’s a step-by-step guide to help you navigate the application process:
Determine the Correct Customs Authority: The application must be submitted to the customs authority of the EU country where you are established or where the goods will be imported. If you are not based in the EU, you can apply through an authorized representative.
Gather Required Information: Detailed information about your goods includefull description of the product (e.g., composition, function, packaging).,technical specifications, and intended use.
Submit the Application: Most countries have customs portals to submit your BTI application online.
Wait for the Decision: Processing time varies by country but generally between 1 to 2 months.
Receive Your BTI Decision CN Code: An approved BTI decision notice assigns a CN code that is valid for three years. The decision is binding across all EU member states.
Include your BTI decision CN Code on the importing paperwork : When importing your goods, include the BTI reference number, product description and related tariff classification on the commercial invoice and other relevant documents.
The main cause for rejection of BTI applications is lack of information.If your BTI application is rejected, the customs authority will provide a reason for the decision. You can appeal the decision and/ or reapply with additional information and clarification.
We recommend getting an advance ruling whenever possible. In addition to Europe, most countries offer this service. By securing a legally binding classification, you can ensure compliance, streamline customs clearance, and focus on growing your business.