Tuesday, January 26, 2021
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USA: duty saving opportunity for garments imported on hangers

Historically, hangers supporting imported garments, like other packing materials and packing containers, are classified in the United Stated in the same tariff subheading as accompanying garments (and subject to the same duty rate applied to these ones). However, in recent years, U.S. Customs has acknowledged that certain substantial hangers “clearly suitable for repetitive use” are eligible for a separate lower duty (3%) classification apart from garments (the correspondent tariff subheading is 3923.90.00, "Articles for the conveyance or packing of goods, of plastics").

 

Customs bases its conclusion on the fact that such hangers are of the class or kind of those that are used in hanger recovery programs (under which hangers are recycled for use in connection with several garment import cycles). As a matter of fact, U.S. Customs has generally considered in the past plastic hangers with metal swivel hooks to meet this standard, but has not normally extended this treatment also to one-piece molded plastic hangers. As a result, many plastic hangers with metal swivel hooks accompanying imported garments have recently been separately classified as "plastic articles of conveyance" at a 3% ad valorem rate of duty (as opposed to the substantially higher garment duty rates).

In some recent rulings, Customs has held that plastic hangers may be entered duty-free as “instruments of international traffic.” The condition required in order to benefit from such preferential treatment, is that the hanger [within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a et seq.)], must be “used as a container or holder” and must be “substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic.”

Thus, the opportunity now exists to increase the duty savings for hangers of the type used in hanger recovery programs by entering such articles as duty-free instruments of international traffic (instead of at the 3% plastic hanger rate).

Additionally, one of the recent rulings suggests that at least some of the qualifying hangers in question were of molded plastic construction without a metal swivel hook. Thus, to the extent that evidence is available demonstrating their use (or suitability for use) in a hanger recovery program, it is conceivable that the hanger duty-savings opportunity, historically limited to plastic hangers with metal swivel hooks, may now be extended to certain plastic hangers lacking such hooks.

For further information we suggest you to contact the law firm our corrispondent for the USA (person in charge: Mr. Arthur W. Bodek), to the following address: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Customs rulings adopted by US customs are available here.

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