Glossary Trade compliance terms
Decode the customs jargon.
Fifty-two terms that come up most in U.S. import compliance, each answered in its first sentence.
This glossary defines the 52 terms that come up most in U.S. import compliance: classification (HTS, GRI, essential character), entry mechanics (liquidation, protest, post summary correction), duties (Section 301, Section 232, AD/CVD) and programs (drawback, foreign-trade zones, CAPE refunds of IEEPA duties). Each definition answers in its first sentence, names the law behind it where there is one, and links to the GingerControl guide that covers the topic in full.
52 terms
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.
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.
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.
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.
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.
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.
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.
Chapter 99
Chapter 99 holds the Harmonized Tariff Schedule's temporary provisions: tariff measures that stack on top of a good's regular Chapters 1 to 97 classification. Section 301 and Section 232 duties are filed under Chapter 99 headings, as was the Section 122 surcharge while it ran from February 24 to July 24, 2026.
Full guide: Chapter 99See it in use:Tariff CalculatorSecondary 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 and Section 232; a wrong or omitted secondary code misstates the duty owed and invites CBP penalties.
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: ECCNSee it in use:Export Control ClassifierEAR99
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: EAR99See it in use:Export Control ClassifierCountry 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.
Entry and 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.
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.
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: LiquidationSee it in use:Protest deadline calculatorDeemed 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.
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.
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.
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.
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.
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.
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.
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: Customs bondSee it in use:Customs bond calculatorISF (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.
Duties and 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.
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.
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.
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: Harbor Maintenance Fee (HMF)See it in use:MPF calculatorSection 301 tariffs
Section 301 tariffs are additional duties the U.S. Trade Representative imposes in response to foreign trade practices it finds unreasonable or discriminatory. The best known are the China lists from 2018; since July 24, 2026 a forced-labor action adds 10 or 12.5 percent on goods from 60 economies (91 FR 47318). Both are declared through Chapter 99 headings and stack on top of the base duty.
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.
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.
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 ended on July 24, 2026, when its 150-day term ran out.
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 the duties they paid through CBP's CAPE refund process for entries within CAPE's limits; older entries need a protest or a Court of International Trade case.
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.
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: Tariff stackingSee it in use:Tariff CalculatorDe 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.
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.
Programs and compliance
Duty drawback
Duty drawback is the return of up to 99 percent of the customs duties, taxes, and fees paid on imported merchandise that is later exported or destroyed, or used to make an exported article (19 U.S.C. 1313). Each claim is filed electronically with CBP and must trace the export back to its import, or to commercially interchangeable goods under the substitution rules.
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.
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.
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.
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.
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.
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.
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, or the licensed broker that filed the entries, file CAPE declarations to recover IEEPA duties on goods entered from February 4, 2025 through February 23, 2026. CAPE takes unliquidated entries and entries liquidated in the past 80 days, and since October 6, 2026, in Phase 3, finally liquidated entries of Court of International Trade plaintiffs whose entries the court has ordered reliquidated.
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.
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.
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.
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.
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.
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: Landed costSee it in use:Parts Library
A dictionary window listing 52 trade compliance terms in four groups, classification, entry and process, duties and tariffs, and programs and compliance, each with a two to three sentence definition and a link to its full guide, some also linking to the tool, product or service page built around the term, plus a search box that filters the list.
