Trade Compliance Glossary

Classification

HTS (Harmonized Tariff Schedule)

The Harmonized Tariff Schedule of the United States is the official list of classification codes and duty rates for goods entering U.S. commerce. It uses 10-digit codes: the first six follow the international Harmonized System, and the last four are U.S.-specific subheadings and statistical suffixes. Full guide

HS code

An HS code is the six-digit product classification number set by the World Customs Organization's Harmonized System and used by most trading nations. It fixes the first six digits of every country's tariff code; the United States adds four more digits to form the 10-digit HTS number. Full guide

Schedule B

Schedule B is the 10-digit statistical classification the Census Bureau requires for goods exported from the United States. Filers report Schedule B or HTS numbers in Electronic Export Information through the Automated Export System; it mirrors the Harmonized System's first six digits but exists only for export reporting. Full guide

General Rules of Interpretation (GRI)

The General Rules of Interpretation are six sequential rules that govern how goods are classified within the Harmonized Tariff Schedule. Applied in order, they resolve which heading a product falls under, covering incomplete articles, mixtures, composite goods, retail sets, packaging, and cases where no rule directly decides. Full guide

Essential character

Essential character is the classification test under GRI 3(b) for mixtures, composite goods, and retail sets that cannot be classified by a more specific heading. The item is classified by the material or component that gives it its essential character, judged by factors such as bulk, quantity, weight, value, and role in use. Full guide

CROSS (Customs Rulings Online Search System)

CROSS is CBP's free public database of issued customs rulings, searchable at rulings.cbp.gov. It holds classification, valuation, and origin decisions dating to 1989 and lets importers research precedent, though a ruling binds CBP only for the specific party and goods it was issued to. Full guide

Binding ruling

A binding ruling is a written decision CBP issues before importation that authoritatively determines a good's classification, valuation, or origin. Once issued, it binds CBP for the requesting party's transactions until modified or revoked, giving importers legal certainty and protection from penalties for the classification it covers. Full guide

Chapter 99

Chapter 99 holds the Harmonized Tariff Schedule's temporary provisions, coding tariff modifications that stack on top of a good's regular Chapters 1 to 97 classification. It carries Section 301, Section 232, and the Section 122 balance-of-payments surcharge that took effect February 24, 2026, after the Supreme Court struck down the IEEPA tariffs. Full guide

Secondary HTS code

A secondary HTS code is a Chapter 99 subheading filed alongside a good's primary Chapters 1 to 97 classification to apply an added tariff layer. It carries overlays such as Section 301, Section 232, and the Section 122 surcharge; a wrong or omitted secondary code misstates duty owed and invites CBP penalties. Full guide

ECCN

An Export Control Classification Number is a five-character alphanumeric code on the Commerce Control List identifying a dual-use item controlled for export by its technical characteristics or end use. The ECCN and destination determine whether a Bureau of Industry and Security license is required before export or reexport. Full guide

EAR99

EAR99 is the default classification for items subject to the Export Administration Regulations but not listed on the Commerce Control List. Most EAR99 goods ship without a license, yet one is still required when the destination, end user, or end use is restricted or embargoed under the regulations. Full guide

Country of origin

Country of origin is the country where an imported good was manufactured, produced, or grown, and it drives marking, duty, and trade-remedy treatment. When materials are worked in more than one country, origin shifts only where a substantial transformation yields a new article with a different name, character, and use. Full guide

Entry & Process

Customs entry

A customs entry is the set of documents and data an importer files with CBP to secure the release of imported merchandise and declare it for a customs procedure. It establishes the importer's right to make entry and starts duty-assessment. Entry combines the release filing with a later entry summary. Full guide

Entry summary (CBP Form 7501)

The entry summary is the document, filed on CBP Form 7501 or its electronic equivalent, on which an importer reports HTS classification, customs value, and the duties, taxes, and fees owed on an entry. It is normally filed within ten working days of merchandise release and must be paid at filing. Full guide

Liquidation

Liquidation is CBP's final computation and assessment of the duties, taxes, and fees due on an entry, marking the point at which the government's account of that entry becomes final. It fixes the amounts owed or refundable and starts the 180-day clock to file a protest. Full guide

Deemed liquidation

Deemed liquidation is the automatic liquidation of an entry by operation of law when CBP fails to liquidate it within the statutory period, generally one year from entry, at the duty rate, value, and amount the importer of record asserted. Extended entries deem-liquidate at four years, suspended entries six months after the suspension is removed. Full guide

Post Summary Correction (PSC)

A Post Summary Correction is the electronic filing an importer submits in ACE to correct an accepted, fully paid entry summary before the entry liquidates. It is the only pre-liquidation method to amend classification, value, or duties, and must be filed within 300 days of entry or 15 days before scheduled liquidation, whichever is earlier. Full guide

Protest (19 U.S.C. 1514)

A protest is the administrative challenge an importer files with CBP to contest a liquidation, reliquidation, or other protestable decision, such as classification, value, or duty rate. It must be filed within 180 days of the liquidation or decision, and its denial is the prerequisite to suing at the Court of International Trade. Full guide

Reliquidation

Reliquidation is a second liquidation of an entry that supersedes the first. CBP may voluntarily reliquidate to correct an error within 90 days of the original liquidation, and it must reliquidate when it grants a protest. Reliquidation restarts the 180-day protest window against the new decision. Full guide

ACE (Automated Commercial Environment)

ACE is CBP's primary electronic system for processing imports and exports, through which the trade files entries, entry summaries, ISF, and refund claims and CBP coordinates with partner government agencies. It is the designated single-window system for cargo release, duty payment, and reporting, including the CAPE module used for IEEPA duty refunds. Full guide

CSMS

CSMS, the Cargo Systems Messaging Service, is CBP's official email bulletin system that notifies subscribed brokers, importers, and software vendors of ACE system changes, outages, tariff and Chapter 99 updates, and trade policy guidance. Subscribing is the standard way filers receive operational and regulatory notices affecting entry processing.

Importer of Record (IOR)

The importer of record is the party legally responsible for making a customs entry, declaring accurate classification and value, and paying all duties, taxes, and fees on imported goods. The IOR is the owner, purchaser, or a licensed customs broker authorized by the owner, and bears liability for CBP penalties and recordkeeping. Full guide

Power of attorney (customs)

A customs power of attorney is the written authorization by which an importer empowers a licensed customs broker to transact customs business, such as filing entries and paying duties, on its behalf. Brokers must hold a valid POA before acting, and CBP prescribes its form, execution, and retention requirements. Full guide

Customs bond

A customs bond is a surety obligation guaranteeing CBP that an importer will pay all duties, taxes, and fees and comply with entry requirements. It takes two forms, a single-entry bond covering one shipment and a continuous bond covering all entries for a year, with the amount scaled to duty exposure. Full guide

ISF (Importer Security Filing)

The Importer Security Filing, known as 10+2, is the advance cargo data set importers must transmit to CBP for goods arriving by ocean vessel. Ten importer elements are due no later than 24 hours before the cargo is laden at the foreign port, with two carrier elements filed separately. Full guide

Duties & Tariffs

MFN duty rate

The most-favored-nation duty rate is the standard tariff the United States applies to imports from countries granted normal trade relations, listed in the Column 1 General rates of the Harmonized Tariff Schedule. It applies uniformly to WTO members absent a preference program or trade remedy. Full guide

Ad valorem duty

An ad valorem duty is a tariff calculated as a percentage of an imported good's customs value rather than by weight or quantity. Most U.S. Harmonized Tariff Schedule rates are ad valorem, applied to the appraised transaction value under CBP valuation rules. Full guide

Merchandise Processing Fee (MPF)

The Merchandise Processing Fee is a user fee CBP charges to process imports. For formal entries it is 0.3464 percent of goods value, subject to a minimum and maximum per entry that CBP adjusts annually for inflation, separate from any duty owed. Full guide

Harbor Maintenance Fee (HMF)

The Harbor Maintenance Fee is a user fee of 0.125 percent of cargo value assessed on commercial merchandise moved through federally maintained U.S. ports. It funds the Harbor Maintenance Trust Fund and applies to ocean shipments, not air or land crossings. Full guide

Section 301 tariffs

Section 301 tariffs are additional duties the U.S. Trade Representative imposes to respond to foreign trade practices found unfair or discriminatory, most prominently on Chinese-origin goods. They are declared through Chapter 99 secondary HTS codes and stack on top of the base tariff. Full guide

Section 232 tariffs

Section 232 tariffs are duties the President imposes on imports the Commerce Department finds threaten national security, covering categories such as steel, aluminum, copper, and vehicles. Rates apply through Chapter 99 codes and stack onto the base Harmonized Tariff Schedule duty. Full guide

Section 201 safeguards

Section 201 safeguards are temporary import restrictions the President imposes when the International Trade Commission finds a surge of imports seriously injures a domestic industry. Relief may take the form of added tariffs or quotas and phases down over a limited period. Full guide

Section 122 surcharge

The Section 122 surcharge is a temporary import duty of up to 15 percent the President may impose for as long as 150 days to address a serious balance-of-payments deficit. A 10 percent surcharge took effect February 24, 2026 under Proclamation 11012 and expires July 24, 2026. Full guide

IEEPA tariffs

IEEPA tariffs were duties imposed under the International Emergency Economic Powers Act citing declared national emergencies. The Supreme Court struck them down as unauthorized on February 20, 2026 in Learning Resources v. Trump, and importers now recover duties paid through CBP's administrative refund process. Full guide

Antidumping and countervailing duties (AD/CVD)

Antidumping and countervailing duties are remedial tariffs offsetting unfairly priced or subsidized imports. Commerce sets the margin and the International Trade Commission finds injury; because duties are assessed retrospectively at annual review, importers face liability that can differ from the cash deposit posted at entry. Full guide

Tariff stacking

Tariff stacking is the layering of multiple duty programs on a single import, where base Harmonized Tariff Schedule rates, Section 301, Section 232, and other measures apply cumulatively. Because most stack additively through separate Chapter 99 codes, the combined rate can far exceed any single tariff. Full guide

De minimis

De minimis is the threshold, historically 800 dollars, below which imports could enter duty-free and with simplified paperwork. Duty-free de minimis treatment has been suspended for all countries since August 29, 2025, and is now indefinitely suspended across all shipment modes, ending statutorily July 1, 2027. Full guide

Tariff-rate quota (TRQ)

A tariff-rate quota is a two-tier duty structure that admits a set quantity of a good at a lower in-quota rate during a quota period, then charges a higher over-quota rate on volume beyond that limit. CBP administers TRQs listed in the Harmonized Tariff Schedule. Full guide

Programs & Compliance

Duty drawback

Duty drawback is a refund of up to 99 percent of customs duties, taxes, and fees paid on imported merchandise that is later exported or destroyed, or used to manufacture an exported article. Claims file electronically with CBP, and substitution rules let commercially interchangeable goods qualify. Full guide

Foreign-trade zone (FTZ)

A foreign-trade zone is a secure U.S. site treated as outside customs territory for duty purposes, where imported goods can be stored, manufactured, or manipulated with duties deferred, reduced, or eliminated until the goods enter U.S. commerce. Manufacturing zones can capture inverted-tariff savings. Full guide

Bonded warehouse

A bonded warehouse is a CBP-licensed facility where imported goods are stored under bond for up to five years without paying duties, which come due only when the goods are withdrawn for U.S. consumption. Duties are avoided entirely if goods are re-exported. Full guide

USMCA

The United States-Mexico-Canada Agreement is the free trade agreement that replaced NAFTA on July 1, 2020, granting preferential or duty-free treatment to qualifying North American goods. Importers claim it by certifying the product meets USMCA rules of origin, backed by supporting documentation. Full guide

Free trade agreement (FTA)

A free trade agreement is a treaty between countries that reduces or eliminates tariffs and other trade barriers on qualifying goods. Under U.S. FTAs such as USMCA and KORUS, importers claim preferential duty rates only when the goods satisfy the agreement's rules of origin. Full guide

First sale rule

The first sale rule lets importers in a multi-tier supply chain declare customs value based on the earlier price between factory and middleman rather than the higher price they pay, provided that first sale was a bona fide arm's-length sale destined for export to the United States. Pending legislation would eliminate it. Full guide

Tariff engineering

Tariff engineering is the legal practice of designing, modifying, or sourcing a product so it classifies under a lower-duty tariff heading before importation. It is lawful when the imported article genuinely matches its classification, and differs from misclassification, which misdeclares goods as imported. Full guide

CAPE

CAPE, the Consolidated Administration and Processing of Entries, is the CBP module within ACE built to process refund claims for IEEPA-based tariffs after the Supreme Court struck those tariffs down in February 2026. Importers of record file CAPE declarations to recover duties paid between February 2025 and February 24, 2026. Full guide

Reasonable care

Reasonable care is the legal standard requiring importers to use adequate diligence when declaring the classification, value, and admissibility of their entries. CBP places responsibility on the importer of record, and failing to exercise reasonable care can trigger penalties even without intent to defraud. Full guide

Substantial transformation

Substantial transformation is the test for determining a good's country of origin when production spans multiple countries, met when processing creates a new article with a different name, character, or use. It governs origin marking and non-preferential origin where no specific tariff-shift rule applies. Full guide

UFLPA

The Uyghur Forced Labor Prevention Act creates a rebuttable presumption that any goods made wholly or partly in China's Xinjiang region, or by listed entities, are produced with forced labor and therefore barred from U.S. entry. Importers must provide clear and convincing evidence to overcome detention. Full guide

Denied party screening

Denied party screening is the process of checking customers, suppliers, and other trade counterparties against government restricted-party lists, such as the OFAC Specially Designated Nationals list and the BIS Entity List, before transacting. A positive match can block a shipment and expose the company to sanctions penalties. Full guide

Prior disclosure

A prior disclosure is a voluntary self-report to CBP of a customs violation made before, or without knowledge of, a formal investigation. Filing one caps penalty exposure, typically reducing it to the unpaid duties plus interest, provided the disclosure is complete and the loss is tendered. Full guide

Landed cost

Landed cost is the total cost of getting an imported product to its destination, combining the product price, international freight, insurance, customs duties, and fees such as the Merchandise Processing Fee and Harbor Maintenance Fee. It is the true per-unit import cost used for pricing and margin decisions. Full guide

For general reference only. See compliance disclaimer.