Binding Rulings

The aim of a Binding Ruling is to provide advance and consistent tariff advice to companies in order to facilitate compliance with Customs requirements.

A Binding Rulings (or advance rulings) gives the option for Customs to issue a decision to a specific importer, trader, broker, or industry representative relating to regulations or laws in force, without the need for the goods to have first been imported.

The most common decision issued by Customs is at present tariff classification, origin and valuation. For example a tariff classification ruling helps importers, exporters and traders obtain the correct tariff classification for goods they plan to import or export. This is an important factor given that the tariff heading of the goods determines the rates of duties as well as application of different legal provisions such as import/export licences, rules of origin and security standards.

The main benefit to the holder of a ruling is that there is legal guarantee that the decision will be applied. Another benefit is that traders can predict their costs prior to import or export. The use of such rulings will also help importers or exporters reduce the Customs clearance formalities for their goods and will consequently expedite the release of goods from Customs control.

A ruling provided by Customs at the request of a trader may be valid for a specified period as stated in the ruling or when circumstances change. Where a new regulation is enacted, or internationally when there is an amendment to the interpretation of the Customs Tariff, the decision ceases to be valid.

Rulings cease to have effect when:

  • information relied on to make a ruling ceases to be correct in all material respects; or
  • change in any of the information or facts on which the ruling was made; or
  • change in the Customs Tariff Act or other applicable law if that date occurs prior to importation or manufacture of the relevant goods; or
  • conditions to which the ruling not met or complied with; or
  • failure to satisfy the requirements of the Commissioner under Section 176E of this Act; or
  • the date of expiry of 3 years from the date that notice of the ruling, or any amendment to that Customs ruling.

The Application Process

The Basic elements of the Rulings procedure can be summarized as follows:

  • The request to Customs must have all the information required (detailed description of the goods, possible inclusion of samples, plans, various documents etc) and must be in writing. Should the request contain incorrect or incomplete information, the ruling based on such information could be revoked. An application of Kina 300 applies for each application.
  • The ruling by Customs must be made in writing within 15 working days of the application. Where a ruling cannot be made within this time Customs must advise the applicant for the reasons and inform the applicant of the expected date the ruling will be made.
  • The ruling is binding on Customs and is valid for a specified period or as stated in the ruling.
  • Only the holder or the trader that requested the ruling can call upon its application, provided that he/she demonstrates that the goods presented and the goods described in the ruling correspond in every respect.
  • The rulings are generally made public to ensure transparency and equal treatment of traders as well as uniform application of Customs laws.