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Product updates and classification in the goods nomenclature

Mar 31, 16 • Customs LawNo Comments

It is common practice that companies update their existing products in order to adapt to changing market conditions. Although a product update normally does not change the main characteristics of a product, in some cases, the updated product will – under customs law – fall in a completely new class in the goods nomenclature and hence needs to be declared differently.

Example: Light bulb and LED bulb

Although both products are bulbs that emit light, the classification of a LED is fundamentally different from that of a light bulb. While a light bulb qualifies as an “electric filament lamp” falling under CN code 8539 10000 90 0, the LED bulb is not classified as an electric filament lamp but as an “other electrical machine” falling under CN code 8543 7090 99 0. In case of imports from the USA to the EU for example, these different classifications may result in a rate of 3.7 % for an “other electrical machine” being applicable instead of the customs rate of only 2.7 % that applies to “electric filament lamps”.

Correct classification is important

To avoid problems in import or customs audits, companies that regularly update their products should always take great care to ensure that after an update, their product is still correctly classified under customs law.

Our experts will be pleased to help you classifying your products correctly. We are looking forward to helping you with any customs related issues.

Continue reading:
Customs Tariff: Details Matter
German customs: How to avoid sanctions

Bartosz Dzionsko

Bartosz Dzionsko

Bartosz Dzionsko is a German attorney at law at WINHELLER headquarters in Frankfurt/Main. He specializes in German tax law, criminal tax law, money laundering and German customs law.

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