CELEBRATING FINE CRAFT

ARTICLES: Exporting Craft to USA


Tuesday, February 27, 2011

Proudly Canadian

When exporting craft into the United States, you should remember that labelling for country of origin can be required. Original works of art are exempted from this provision - however - knowing what is art and what is functional craft is as imprecise in the customs office as it is in the art gallery (see previous post).

The purpose of country of origin labelling requirements is to ensure consumers have an informed choice about where products come from. They can then choose to support, or not, goods from specific countries. As a result, "goods imported from another NAFTA country be marked in a conspicuous place legibly, indelibly, and sufficiently permanently to indicate to the ultimate purchaser the country of origin of the article." (read details...)

This sounds daunting, and sometimes can be. However, there are exemptions:

Additional products are exempt from country of origin marking requirements, but Canada, Mexico and the United States may require that their outermost usual containers be marked to indicate the country of origin of the goods they contain. These include a Canadian, Mexican or U.S. good that:

  • Is incapable of being marked;
  • Cannot be marked prior to exportation to the territory of another NAFTA country without causing injury to the goods;
  • Cannot be marked except at a cost that is substantial in relation to its customs value so as to discourage its exportation;
  • Cannot be marked without materially impairing its function or substantially detracting from its appearance.
  • Is in a container that is marked in a manner that will reasonably indicate the good's origin to the ultimate purchaser.
  • Was imported without the required marking and cannot be marked after its importation except at a cost that would be substantial in relation to its customs value, provided that the failure to mark the good before importation was not for the purpose of avoiding compliance with the requirement.
  • All of this means that if you are sending production ceramics to the United States, it would be very advisable to have "Made in Canada" on the bottom of the pieces - indelibly and fairly permanently. If you are shipping jewellery or other products where a "Made in Canada" inscription would injure the aesthetic of the work - have containers for each piece, and have the "Made in Canada" printed on the container.

That's the defensive part of the equation. But here is another thought. South Park notwithstanding, few Americans have a bad image of Canada. For most, it is positively favourable. Therefore, from a marketing point of view, it can make sense to do more than ensure minimal compliance with the law. The Canadian flag is a good one - embrace it, and turn compliance with US customs regulations into a positive selling point.

It is, at least, worth a thought.

 

February 26, 2011

The "What is Art Debate" - as interpreted by the US Customs and Boarder Protection Service

We recently had the opportunity to attend an excellent workshop on exporting to the United States that was organized by the Canadian Department of Foreign Affairs and International Trade. Over the next few postings, we’ll relay some information of use to Craft people selling or teaching in the United States.

According to Chapter 94 of the Harmonized Tariff Schedule of the United States, "Works of Art" can enter the American market without paying duty. Therefore - if defined as art - handcrafted products would enter the US duty free. If classified as "not art" (i.e. as a functional object), it becomes subject to an array of tariffs. Some makers - depending their raw material - are free regardless. For example, most ceramics products can enter duty free. However, if someone worked in glass, duties can range from 3.2% to 28.7%, depending on the nature of the product. Tariffs on jewellery can run from 3% to 11%.

So we posed the question to the two very helpful American customs agents who were conducting a seminar:

At what point does something that looks like a functional object become art - if it produced for aesthetic appeal rather than for use as a functional object?

In bureaucratic terms, the question is posed as "At what point does Chapter 94 apply, instead of Chapter 71 (jewellery) or chapter 70 (glass and glassware)?"

The answer was - there is no single right answer. You can make a case - and the decision will be up to the customs officer. It is possible, however, to make your case and get a binding answer before shipping. More information about rulings here...

You can submit via the internet a request for a binding ruling. Answers generally come back within 30 days. You then put this binding ruling number on the shippers invoice - it will then be, as it says, binding on the individual customs agent at the border. You can also search past rulings via a very well developed search engine to see what arguments have been successful in the past.

There are a other things worth knowing on this question. On the question of art, customs agents are actually looking to distinguish between the handmade and the mechanically produced. For prints - work "executed by the hand of the artist, irrespective of the process or material" is art. Something produced by a "mechanical or photomechanical process" is printing. In the case of sculptural pieces, both the original and up to 12 reproductions (however produced) are considered art.

If shipping multiples, one way of increasing the chances of your work being considered art is to present each piece as part of a numbered series, finite in volume.