As we have seen above, the customs declaration includes several mentions. Among all these elements, there are three (03) that are essential for proper taxation of the goods. They are: the tariff classification, the origin, and the customs value. These elements are considered essential because they not only constitute the basis for taxation but also determine the conditions of entry or exit of the goods.

Is the merchandise free to enter or exit, or is it subject to particular conditions? What is the taxation applicable upon entry or exit of the goods? Only mastery of these three elements will enable one to answer these different questions without error.

SECTION 1: TARIFF CLASSIFICATION

The first of the three elements is the tariff classification.

Paragraph 1: Definition

The classification of goods is the designation assigned to them, according to the rules in force in the Tariff and Statistical Nomenclature of the Union. The tariff designation may be different from the commercial designation. The nomenclature is a directory of all goods that exist and are the subject of commercial exchanges. It is established according to a given structure, with goods grouped by economic sector and within each sector according to the degree of processing.

Benin, like other ECOWAS countries, is a contracting party to the Harmonized System convention.

The Harmonized System contains more than 5,000 distinct groups of goods identified by a six-digit code (column entitled “HS Code”), with the first four digits corresponding to the relevant position number, and the fifth and sixth digits of the code identifying respectively the sub-positions with one and two dashes (the absence of a sub-position being characterized by a zero).

Examples:

• The HS code for guts is 0504.00, indicating that no subdivision has been made (5th and 6th digits = 0);
• The HS code for buckwheat is 1008.10, meaning that buckwheat falls under the first sub-position with one dash (5th digit = 1) of number 10.08, and this sub-position has not been further subdivided (6th digit = 0). NB: Examples taken from the ECOWAS CET entered into force on January 7, 2015.

Paragraph 2: General Interpretative Rules

To ensure a uniform legal interpretation of the nomenclature, the HS has enacted a series of provisions and principles: the General Interpretative Rules (GIR). To carry out a classification, these rules are applied following a specific process, always starting from GIR No. 1.

The content of the GIR can be summarized as follows.

• GIR No. 1 emphasizes the indicative value of the wording of section, chapter, or sub-chapter titles as well as the legal character as a basis for classification, the terms of positions and section or chapter notes and GIR No. 2 to 6 provided they are not contrary to the terms of said positions and section or chapter notes.
• GIR No. 2 governs the classification of incomplete or unfinished articles, disassembled or unassembled articles, the data to be considered in the tariff classification of composite articles or mixed products, and refers to GIR No. 3 for the classification of such articles and products.
• GIR No. 3 governs the classification of mixed products and composite articles.
• GIR No. 4 governs the classification of goods that could not be classified using rules 1, 2, and 3, particularly classification by analogy.
• GIR No. 5 deals with the classification of cases, caskets, and similar containers as well as packaging.
• GIR No. 6 relates to classification within sub-positions.

Before submitting the customs declaration, the declarant may request a classification opinion from the Customs Administration in order to avoid falling under the scope of a false species declaration. The decision of the Customs Administration has no other value than that of an opinion towards the user but remains binding on the customs services. The user may also contest the classification made by the customs service. In case of disagreement between the declarant and customs, the dispute is referred to an arbitration commission.

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This text is an extract from the book “BETTER KNOW CUSTOMS” written by Idrissou IMOROU.

We invite you to read the following article “THE INCOTERMS“.