Import/Export Classification: Who Should Do It?

Dear Import/Export Compliance Manager,

Audits of our ECCNs and HTS Codes are showing that the engineers are assigning codes improperly.  What can I do in order to get them to shape up?

Exasperated in Elgin

Dear Exasperated,

This situation brings to mind the immortal Law of Comparative Advantage in economics.  Simply put, countries (or people) should focus on the activities which they perform best and leave activities at which they are not very good for others.  This is why, for example, televisions are made in the Far East and not the United States and why the Import/Export Compliance Manager leaves tasks requiring legible handwriting to his wife. 

If we apply the Law of Comparative Advantage to your company, well, what do engineers do best?  You can bet it’s not classifying products per the byzantine Harmonized Tariff Schedule and Commerce Control List.  That’s not to say they’re not smart people who couldn’t become masters at it if they tried.  However, they were trained on and hired to do a completely different job from what you are asking them to do.  Having them handle the classification runs the risk that they treat the assignment as something annoying to be completed as quickly as possible, thus allowing them to work on the tasks for which they get paid and reviewed on. 

The answer, seemingly, would be for you, the HTS and CCL expert, to handle classification of the products.  After all, you live and breath it whenever you are at work (and if you don’t live and breath it, you should).  The Import/Export Compliance Manager thinks that’s not the way to go.  Why not?  Becase you’re not an expert on the products.  And, if you are working for a small- to mid-size company, it's quite possible that your company does not have good processes or systems to enable you to receive the data required to determine the proper classifications.  

The real answer to your problem, then, is to attempt to meet the engineers halfway.  Become more of an expert on your companies’ products and the other items which the engineers are classifying.  Manufacture chemicals?  Bone up on your basic chemistry.  Manufacture electronic parts?  Learn a bit about processors, resistors, capacitors and the like.  Manufacture heavy machinery?  Learn as much about your products as you need to be able to make a creditable stab at classification.  Once you have done this, work together with the engineers to either a) jointly classify products or b) design a better process, such as a good, product-line specific questionnaire, for the engineers to use.  Not only will the engineer appreciate you making better use of her time, she will be more invested in the process and making it successful.

A key to make this work is not to be a stick in the mud.  Part of the joy of being in the import/export compliance field is learning something new every day.  Treat learning about product as part of your job and attack it with gusto.  No one wants to hear the ‘Oh, I can’t possibly learn (insert subject here)’.  You don’t need to be a technical expert; that’s for the engineer.  But you need to know how to speak the language.  And what you’ll find is that it will help you interact with others in the company who have more product knowledge than you such as salespeople, supply chain and manufacturing personnel.

The best solution, of course, is to have a technical expert within your department, someone who is capable of taking the data available in your systems and assigning accurate codes.  This option is something that the Import/Export Compliance Manager believes all companies with this need should aspire to. 

Lastly, keep in mind that, since you are auditing the engineers’ HTS Codes and ECCNs, you’re still having to learn enough to know whether the codes are incorrect AND are still having to do work for classification.  Why not spend your time with the engineers to get it right the first time and free everyone up for more productive activities?