The NOFMA Standard

Discussion in 'Industry News, Training & Organizations' started by Jim McClain, Aug 21, 2006.

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  1. Jim McClain

    Jim McClain TFP Owner/Founder Administrator

    Our website has obtained permission to reprint in whole or in part, The NOFMA Standard, the official newsletter of NOFMA (note: NOFMA has merged with NWFA). We thank Timm Locke, Executive VP and author of many of the articles we will reprint for his kind and generous support. This thread will be closed to replies so that it will contain only the newsletters, but you are welcome to discuss any of these important articles here in the forum by starting a new topic. I will begin this thread with our first article from the newsletter.

    Importers Beware

    In 2005, at least 195,000,000 square feet of wood flooring was imported into the U.S. We say “at least” because that’s about how much was classified under the Harmonized Tariff Schedule:pdf: code 4409.20.25, which carries the descriptor “wood flooring”. The trouble is, that code is supposed to be used only to describe solid wood that is not end matched and is not factory finished. Solid flooring that is end-matched and/or factory finished before it enters the U.S. belongs under a different HTS heading and is subject to a 3.2% tariff.

    At the request of NOFMA members who are interested in seeing that existing tariffs are enforced, NOFMA staff, working through the Hardwood Federation, asked the US Customs Bureau to begin looking into flooring shipments coming into the country that might be misclassified. Customs agreed to start looking and asked the Hardwood Federation to provide a list of foreign manufacturers who we thought might be shipping significant amounts of flooring, a request NOFMA complied with.

    Since then, Customs has apparently been doing its job, because this spring at the NWFA convention a panel of distributors who were presenting a seminar on importing referred to a “new” 3.2% tariff. Of course, there is nothing new about the tariff at all. The only thing new is that Customs is now enforcing it.

    More recently NOFMA has learned of cases involving importers who have been asked to resubmit paperwork for imports they’ve received over the past few years. If the product is found to be misclassified Customs has been imposing tariffs retroactively. Unfortunately, it is the consignee and not the overseas manufacturer who is being held responsible for the misclassification and any subsequent tariffs. While the law allows for punitive fines, to date NOFMA has not yet heard of instances where anything beyond back tariffs is being collected.

    So, if you are dealing in imported flooring, it is in your own best interest to make sure it is classified properly when it comes into the country. Customs, as the enforcement agency, has the last word on these issues.

    And Customs says this: If the wood coming in is solid hardwood and not prefinished, it belongs under heading 4409. If it’s in 4409 and is “continuously shaped along any of its ends” or end-matched, it belongs under 4409.20.0500 and it is subject to 3.2% tariff. If it is not end-matched and it is “wood flooring” it belongs under 4409.20.25 and it is tariff-free.

    If the wood is solid (hardwood or softwood) and prefinished, it belongs under heading 4418 (which happens to be the heading for “Builder’s joinery and carpentry of wood….”). Since this heading has no subheadings that clearly define flooring products, prefinished flooring falls into a catch-all section, 4418.90.4590. Importers are expected to refer to the “Explanatory Notes” addenda to the Harmonized Tariff Schedule, as well as past rulings on specific cases which date back to September 2004 in order to know how to properly classify prefinished imports.

    If you are not absolutely sure you know where the product you are importing should be classified, you should contact Paul Garreto (646-733-3035) and ask. Many who thought they were sure are now learning they owe thousands of dollars in back tariffs.

    Engineered flooring is even more confusing. Until recently, it was generally thought that imported engineered wood flooring falls under heading 4412, which includes “Plywood, veneered panels and similar laminated wood….” and is subject to an 8% tariff. However, NOFMA has recently learned that some products, including engineered flooring, may be moved from 4412 to 4418. This change is due in part to the way the international community defines “parquet panels”. In short, if you are dealing in imported engineered flooring, it is strongly recommended that you contact the US Customs Bureau to double check that the products you are importing are classified correctly.

    NOFMA will continue to work with Customs, the International Trade Commission and the Bureau of Census to address the concerns of domestic wood flooring manufacturers. NOFMA members who would like help understanding the Harmonized Tariff Schedule may contact NWFA/NOFMA at 800.422.4556.
    From The Standard - August 2006

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