FTZ Management: Knowledge Based Articles - Column 2 Duty Overview
Overview of Column 2 duty processing within the USFTZ module
This article is an overview of how to manage Column 2 duty rates in the USFTZ module.
Background on Column 2 Duty
On April 12th, 2022, CBP announced that shipments entered or withdrawn for consumption on or after April 9, 2022, must have rates of duty set forth in Column 2 of the Harmonized Tariff Schedule of the United States (HTSUS) applied to all products of the Russian Federation and of the Republic of Belarus. To read the announcement mentioned above, refer to CSMS #51575437 - GUIDANCE: Suspending Normal Trade Relations with Russia and Belarus.
The article below details how to manage this change within the USFTZ module.
Admitting Goods into the Foreign Trade Zone with Column 2 Duties
Setting up Column 2 HTSIndexes
In order to apply the Column 2 duties to a receipt into the zone, you will need to setup an HTSIndex specific to the column 2 duty rate. The HTSIndex should comprise the 10-digit HS classification followed by _C2.
To add Column 2 HTSIndexes via the HTS Maintenance screen:
- ClickAdd Record. A pop-up will appear.
- Type the relevant 10-digit HTS code into theHTS Numberbox.
- Click onLoad SPICodes.
- Select theUS COLUMN TWOoption.
- ClickSubmit. You will be re-directed back to the main HTS screen as the pop-up closes, and the HTS data will be pre-populated in the grid:
noteThere are some manual updates that will be needed to the pre-populated data:The HTSIndex will pre-populated ending with _3:- This should be updated to _C2 to represent Column 2.
The SPICode1 and SPICode2 fields will be populated with a 3:- These should be updated to blanks (the 3 should be removed from each box).
- ClickInsertto finalize. This HTSIndex is now ready to be applied to incoming receipts.
Applying Column 2 HTSIndexes to Receipts
ItemMaster
If a ProductNum is single sourced and will always be sourced from a Column 2 country, then the Column 2 HTSIndex can be updated for that particular ProductNum record in the ItemMaster. This should be pulled over to applicable receipts during the Validation workflow if the HTSIndexSource is set to I.
ItemMaster Custom Rules
If a ProductNum is dual-sourced, meaning it can be sourced from both Column 1 and Column 2 countries, receipts for that ProductNum will need to have different HTSIndexes applied depending on the Country of Origin. The best tool to manage this scenario within the USFTZ module is the
Item Master Custom Rules
, which can be found under the Maintenance
menu. New rules should be setup to manage Column 2 receipts, and the rule would be set up with the criteria below:Item Master Custom Rule – Column 2 Rule Guidance | Description |
|---|---|
Match ProductNum | Applicable ProductNum (this is not required, users are able to just match at the HTS level if able, but ProductNum is available as a lower-level match as needed) |
Match Country Of Origin | Column 2 Country |
Match HTSIndex | 10-digit HTS classification |
Match Status Code | N or P (as domestic receipts do not need this change applied) |
Update to HTSIndex | Column 2 HTSIndex (10-digit HTS Classification followed by _C2) |
Update to Status Code | Same as Match Status Code |
Update to HTSNum2 | Blank, as this is not required for Column2 reporting |
For more information, refer to Item Master Custom Rules.
FIFO Mass Update
FIFO Mass Update serves as an additional tool that can be leveraged to update HTSIndexes on transactions to show the Column2 HTSIndex as needed.
For more information, refer to FIFO Mass Update.
Updating Existing Inventory to Reflect Column 2 Duties
Future HS
The Future HS screen can be used to update on-hand inventory layers to show the Column 2 duties, as necessary. The user would update the HTSIndex within the Future HS screen for impacted on-hand layers to the Column 2 HTSIndex (with the _C2 identifier on the end). Taking this action will ensure that at time of removal from the zone, the Column 2 duties will be applied to align with Customs guidance.
note
You will only want to update on-hand inventory once the entry for a zone week with an Entry Begin Date prior to April 9th 2022 is closed out (filed with Customs), as the Column 2 duty rates are only applicable as of April 9th. For any zone weeks with an Entry Begin Date of April 9th or later, you will want to ensure that the inventory is updated to reflect the Column 2 duty rates prior to generating the Entry/7501.
Future HS should be used rather than Edit Inventory Layers, as it will update the entirety of the layer which would include already shipped goods, whereas Future HS will update only the on-hand/remaining inventory.
For more information, refer to Future HS.
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