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AMA August 22 FAQs

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AMA August 22: FAQs

Find answers to questions asked during our AMA held Friday, August 22.

Thanks to all that joined our AMA held on Friday, August 22. Find the link to recording and slides here.

Due to the overwhelming amount of questions received we’ll update this blog as we tackle them. For specific questions related to your HTS code or CUSMA requirements we recommend contacting additional professionals for guidance. You can find resources linked in the presentation slides and we’ll also add them in this blog for quick reference.

Key Highlights

  • DDU postage (duties unpaid where recipient pays for duties) currently not available on Chit Chats
    • Both Chit Chats International Tracked (to US via PostNL) and Canada Post Tracked Packet US & Expedited Parcel temporarily disabled
  • Starting August 29 – all shipments crossing into the US border will be required to have duties (if applicable) paid – so only way to ship to the US will be with DDP postage
    • Currently available for country of origin China, Hong Kong or Macau
    • All other countries – not yet live on platform – we will notify all clients as soon as it’s available – aiming for Wed, Aug 27

Shipments received that don’t make the cut-off to ship under de minimis

Check cut-off dates here for shipments to cross into the US border under de minimis.

If we receive shipments that don’t make the last de minimis crossing:

  • We will hold shipments and return back to you
  • Please don’t request postage refund until you physically have the package returned back
  • If you wish to still ship these packages – new DDP postage will need to be purchased

What can you do?

To ensure adherance to US Customs Border & Protection (US CBP) regulations and minimize potential disruptions it’s important to prepare, do your research and know your products. Fines and penalties can be imposed by US CBP for misdeclaration.

Our team is working diligently to keep you informed and up to date. However, due to industry-wide changes and new regulatory requirements, we anticipate potential delays. As shipping providers and carriers adjust to these changes, some disruptions in service may occur. We appreciate your patience and understanding during this transition.

RESOURCES
GENERAL

Will the max USD value of the package be changing?

  • At this time no however we are looking into this and provide an update should this change. 

Amazon FBA – is this available to ship?

  • Currently FBA shipments are temporarily suspended and we will not ship these until further notice. We are looking into options to see if we can accommodate these shipments after August 29. We will update our clients and blog if this becomes available.

Am I to assume that the tracking links & stuff for Chit Chats Edge with DDP, it’ll still be through USPS? 

  • That is correct. The final delivery is still handled by USPS. 

Will postage costs change for USPS?

  • There are no current changes to postage costs. Typically USPS will have their annual carrier increases twice a year. Learn more
  • There will be applicable duties determined by 10 digit HTS code, shipment item and merchandise processing fees
    • Merchandise processing fee (MPF) is calculated by U.S. Customs and Border Protection and may change at their discretion. It is a flat fee per shipment (1.35 USD flat fee*)
    • Shipment item fee is the individual item processing fee for broker to process the individual HTS coded items in the shipment (0.15 USD / line item*)
      • Example: You are shipping 1 tshirt, 2 mugs and 3 pins = 3 shipment items
        • Currently there is a maximum of 20 shipment line items per package
  • *These fees are subject to change – we have worked hard to keep these as low as possible as we understand sellers are grappling with having to now also duties on top of postage costs. 
HTS CODES

HS Code vs HTS code – what is the difference?

  • HS (Harmonized System) codes are a globally standardized system for classifying traded products, while HTS (Harmonized Tariff Schedule) codes are a more detailed, country-specific version of the HS code, used for imports into the United States. the 10 digit HTS code will be required when creating DDP shipments on the platform.

Where do I find the “S” for a special code for CUSMA duty-free treatment?

  • Enter your 10 digit HTS code on the US official site here
  • Look for the S annotation under Rates of Duty: Column 1: Special (S)

My HTS Code says the item is Free under Rates of Duty/General but it does not have anything under Rate of Duty/Special is it still CUSMA?

  • No, if there is no note under the ‘Special’ column (S), then the product is not eligible for preferential tariff treatment under CUSMA. Your product may still be subject to the US administration’s IEEPA Tariffs which is determined by the tariff code (i.e. 35% for items originating from Canada). There are some exceptions to this tariff, such as informational materials (books, newspapers, etc.)

I’m new to this. What is the best way to start figuring out my HTS code?

DUTIES/TARIFFS

Will the $80-200 per package or ad valorem starting Aug 29 apply to all packages even if CUSMA eligible and what about “postal will enjoy a temporary no duties” period” as CBP gets procedures ready. However there is contradictory information. There is other info saying – no – there will actually be.

  • Given that our postal services are being disabled, this would not apply for Chit Chats shipments.
  • This $200 charge is only for postal products from agencies that cannot collect duties to remit to CBP, so this would not affect Chit Chats shipments, as all of our US-Bound shipments would require tariffs and duties to be collected in advance.
    • Postal: Canada Post Tracked Packet US & Expedited Parcel
      • Chit Chats will disable this Monday, August 25. Read more
    • Non-postal: Chit Chats Edge, Chit Chats US Select 
      • DDP postage currently available for country of origin China, Hong Kong or Macau – all other countries we are aiming to have it available Wed, Aug 27 and will notify all clients
DDU & DDP

DDP (duties paid) postage options to cross after Aug 29 once de minimis is removed

  • DDP option is currently available for countries of origin China/Macau/Hong Kong
  • DDP for all other countries aiming to have available on platform for Wed, Aug 27
    • We will send an email and update our blog once this is live on our platform. 
      • This option would be through USPS (CC Edge, CC US Select)
    • Mandatory requirements: country of origin, 10 digit HTS code and manufacturer information (without any of this no postage DDP options would be available). This is the only way to ship into the US starting Aug 29.

Will Chit Chats offer a DDU courier option so the end recipient pays? Will you offer any DDU options so the receipient/customer has to be the one that pays for duties, taxes and clearance fees? 

  • We are exploring options as we understand that some sellers prefer to ship with DDU where any potential duties/tariffs are collected at time of delivery from your customer. As of Monday, August 25, DDU options will be unavailable – no timeline if they will be available just yet but we will update all clients if something changes.

So this means that Americans do not pay the tariifs? But all do when we ship to them?

  • When shipping using DDP postage, the seller assumes the cost, but that doesn’t necessarily mean the cost comes out of the seller’s pocket. The tariff fees can be baked into the price of your products when selling, included with your shipping costs, or you can choose to explicitly show estimated tariff fees as a separate line item if your selling platform allows for it. This is completey your choice based on what is best for your business.

What about those of us who are CUSMA compliant and don’t want to pay DDP because we are exempt from duties?

  • If your item meets CUSMA requirements then you will still use a DDP postage option but wouldn’t see any duties applicable (no tariffs) but there would be merchandise processing fee and shipment items fees. Refer to CUSMA certification approval process outlined in CUSMA FAQs section below.

What are the fees? Do I just pay duties? 

  • Correct, we collect duties for your shipments, it is included in the price paid for your shipment along with the postage and other fees. 
  • Duties/Tariffs calculcated based on 10 digit HTS code – refer to what that % would be found on the offical US site.
  • Merchandise processing fee (MPF) is calculated by U.S. Customs and Border Protection and may change at their discretion. It is a flat fee per shipment (1.35 USD flat fee*).
  • Shipment items fee is the individual item processing fee for broker to process the individual HTS coded items in the shipment (0.15 USD / line item*).
    • Example: You are shipping 1 tshirt, 2 mugs and 3 pins = 3 shipment items
    • Currently there is a maximum of 20 shipment line items per package
  • *These fees are subject to change – we have worked hard to keep these as low as possible as we understand sellers are grappling with having to now also duties on top of postage costs. 

if I have 5 products like shirt but each of it is different and has different price – but the producer is the same – do I need to list it separately or I can put 5 shirts and average the price?

  • When creating a shipment on our platform, yes you can create one line with a quantity of 5 and average out the item price, as long as the total declared amount is equal to the total value of the shirts.

I run an eBay store where I sell a wide variety of products, including clothing, electronics, and toys. Across these categories, I offer over 1,000 different items and add new listings/products every single day. Given the volume and diversity of my inventory. What would be the best option for me?

  • Our Delivered Duty Paid (DDP) service is a viable solution only in which you are able to provide manufacturer information. This is a mandatory component in order to have access to our DDP service. We would recommend to keep a list of manufacturer information based on your inventory. 

If I ship through Canada Post on my own are they still duty free as of right now until the border is ready for them?

  • Canada Post has not given specific direction, it would be at your discretion to use their services outside of Chit Chats. As of right now, shipments through Canada Post are not necessarily duty free, but duties/tariffs would be charged to the recipient upon delivery.

What options will be disabled?

  • We will disable the Canada Post Tracked Packet US & Expedited Parcel (DDU postage options to US) on Monday, August 25. Various ecommerce platforms (eBay, Etsy) have also done the same for Canada Post, along with other Postal Services (ie Australia Post, Royal Mail) due to similar concerns.

Do you know of any DDP solution for Vancouver Island?

  • With Chit Chats you can access DDP solutions. Since we do not have a Chit Chats location on the island you just need to get your shipments to Chit Chats – you can use SmartDrop or mail in your shipments. Learn more
CUSMA

I saw Etsy is suggesting we ship with Chit Chats or Shipstation instead of Canada Post because you guys have pre-paid tariff systems coming into place. My question is if we fall under CUSMA, Etsy doesn’t give us customer phone numbers so how do we fill that info in?  Wondering if you know since they’re suggesting working with you for shipping!

  • If you are referring to CUSMA certification, only your phone number would be required for certification. 

Is there anything required from the end recipient to get the preferential treatment under CUSMA or can I as the seller complete everything required on my end for no disruption to my customer?

  • There is nothing that the recipient is required to do as this will be approved prior to the shipment crossing the border. Any potential duties and fees will be paid before crossing the border (at time of postage purchase).

Do I need to submit CUSMA certification form electronically and place it on the package? 

  • You will need to send a CUSMA certification once prior to your first shipment.  It will only need to be done once per year – however you will need to resubmit for any additional SKUs/HTS and it would need to go through the approval process again before you can ship those additional SKUs/HTS.
  • It is optional to attach it to the package, though doing so wouldn’t hurt.
  • CUSMA certification form not yet available on Chit Chats platform – aiming for Wed, Aug 27
  • In most cases, if your products are CUSMA-eligible, your products may be able to cross the border duty free, but other fees (Broker conveyance fee, shipment item fees, etc.) would still apply. 
  • We recommend that you start to gather the necessary information so you’re ready once the time to submit the information to us is made available. You can find the details of what information will be required here. 

Can I use a form that I have created or from another carrier like UPS or FedEx for example? The rules for CUSMA do not specify any particular form to be used, only that certain details be provided.

  • If you have used a CUSMA form through another shipping provider you still must submit the necessary information with Chit Chats through our form as we need to obtain approval through our customs broker.
  • Once approved you account will be updated to show preferential duty-free treatment based on the SKU.

How long will the CUSMA certification approval process take?  Will the approval process for CUSMA eligible products delay the shipments to be delivered to the customer?

  • For CUSMA eligibility we anticipate a turnaround of 48 hours however since we are still working on this process we will provide further details once it is ready.
  • Since shipment information will be processed by our broker for approval it is best to ensure that all shipment information is accurate to prevent any delays (i.e. manufacturer information).
  • Approval for each SKU and it will be valid for one year.

Are you expecting one CUSMA form for the declaration period of one year, or one CUSMA form for every order?

  • One form for the year, however if you are looking to ship additional CUSMA SKUS/HTS in your product portfolio you will need to resubmit approval before being able to ship those new products under CUSMA.
  • CUSMA validation is per SKU/item and not per package. 
    • Example: (i.e. handcarved heads, sewn clothing, etc) so then for the CUSMA certification you would submit for each SKU and it would be valid for one year.
  • Every SKU eligible for CUSMA will need approval by broker before being provided duty-preferential/free treatment.
  • SKUs and HTS approval are tied to the unique Chit Chats client.

For every new product or new sku we would need to resubmit the CUSMA form based on those products?

  • That is correct. When you add new products or SKUs that are CUSMA-eligible, you would need to submit a new certification form. You will not need to resubmit the form for existing products until the blanket coverage dates have expired.

For CUSMA, all of the items I sell are handmade and don’t have SKUs. How do we go about creating that?

  • A SKU, or Stock Keeping Unit, is a unique alphanumeric code that businesses use to identify and track their inventory. You will need to create a SKU (unique identifier) if you do not have already.
  • You can choose your own SKUs, and use them on our platform during the shipment creation process. If you have a connected storefront like Etsy or Shopify, you can enter your SKU on your product listings and they will be imported automatically with your shipment items.

SKU number can a book ISBN be used or should it be specific to our company such as inventory number?

  • You can use either number for a SKU as it is specific to your product and selling platform.

Does every colour variation require a unique SKU? Or can one SKU cover all colour options?

  • At this time colour variations will require a unique SKU per colour. Since approval is determined by the product the broker requires to approve all variations to ensure compliance with US Customs.
  • We are determining if this would also apply to different sizes and variations on products – more to follow once we have confirmation from our broker.

For the SKU line items, if we have something in different sizes, but it’s the same item/HTS code, can those all go on one line item? e.g. 3 x t shirts, one XL one S one M, can all 3 still be listed on the same line (assuming we give them one umbrella SKU)?

  • That is correct.

Can we ship a package that has some CUSMA eligible products, plus a few non-eligible items? So we pay for duties on only the non-eligible items?

  • Yes, your shipment can contain a mix of products from different countries of origin, with different HTS Codes, and our platform will calculate the duties accordingly.However you will need to pay the applicable duties/taxes for non-CUSMA shipments.
US COUNTRY OF ORIGIN

For packages that would go DDP but are in fact items that are country of origin USA – how does this get handled.  Just 0% tariff? I thought made in USA had 0 duties? I don’t understand how a tariff can apply to your own country? Why would we be charged the base duty rate for Made in the USA items?

  • CUSMA (Canada–United States–Mexico Agreement) is a free trade agreement that provides preferential duty treatment only for goods originating in one CUSMA country and imported into another.
  • If a product is U.S.-origin and is coming back into the U.S., it’s not an import from another country’s origin and therefore duties would be applicable based on the 10 digit HTS code and its respective base duty rate. Blanket tariffs will not apply. Reference more here
    • *Chit Chats shipments are commercial transactions. Commercial transactions are not a valid form of reason for return, making the 3311 (CBP Form 3311 Declaration for Free Entry of Returned American Products) not applicable to Chit Chats. For any country of origin US items, we charge them on the base duty rate based off HTS schedule and no blanket tariffs apply. 
MANUFACTURER INFORMATION

Do I need manufacturer information? What if I don’t have it? Is manufacturer ID necessary for using DDP? I spoke to a lot of my manufacturers from different countries (China, UK, Sweden, USA.. etc). And many of them have not even heard of manufacturer ID, and are unable to provide me with that information.

  • Manufacturer information is mandatory to ship to the US with DDP. This includes
    • Manufacturer ID (this is automatically generated by Chit Chats)
    • Manufacturer Name (Company or Person)
    • Manufacturer Street Address
    • Manufacturer City
    • Manufacturer Province
    • Manufacturer Country (this will match what is entered in the Country of Origin field)

I see that some vintage items (HTS codes) might be excluded from needing the manufacturer’s information. How can I ship? 

  • To access Chit Chats’ DDP service, we require manufacturer information regardless of the HTS code. Unfortunately there will be no exceptions to this.

So, I have a 3D Printing business based in Canada. When it comes to declaring the manufacturer’s details, I sometimes use filament bought on amazon,  and the filament originates from China, if it’s still formed in Canada, do I still just say it’s made in Canada?

  • Correct, since the actual manufacturer is the printing in Canada, the country of origin would be considered Canada. This is due to the substantial transformation of the filament (one HTS code) to a printed object (different HTS code) as well as the difference in value from the raw material to the retail value of the finished product.

I handmade my own items in my own home – can I enter my home address as the manufacturer details? 

  • If you handmake and substantially transform your materials in your home studio, you can enter your address as the manufacturer business information.
DECLARED VALUE & COUNTRY OF ORIGIN (COO)

Declared value should be what the retail value is – proof of invoice is ideal as it may be requested to be provided by US Customs. Learn more

Country of origin

To determine the country of origin reference these resources. The item must also physically be labelled with MADE IN COUNTRY that matches what is entered when creating your shipment on Chit Chats.

What is “enough” transformation of a handmade product incorporating items manufactured elsewhere?

So you mentioned that you need to have a label for the country of origin on items being shipped to the US. But if the item I am shipping to the US already has a tag from the product itself that states where the item was created, do I still need to put another tag?

  • If the item already has a MADE in XXX Country label then another label is not required. The country indicated on the label must match what is entered in the shipment details for country of origin as well as the manufacturer country.

Does adding more than 50% of the value in Canada qualify a product originally made in China to have Canada as its country of origin when selling to the U.S.?

  • If you are simply up-charging a Made in China item, that does not change the Origin Country criteria.

Can you suggest the declared value of personalized products?  For example, a $4 blank t-shirt (made in China), personalized/decorated in Canada, sold for $30. Due to CUSMA and the decorated work being done in Canada, should the declared value be $4 or $30? And what would the country of origin be?

And items must be labelled made in xxxx in some way for DDP? Vintage and other items may not have labels or tags.

For items that are substantially transformed in Canada (I think it was the B option in the slides), do we also need to satisfy the origin percentages (RVC) if we are using originating and non-originating pieces to assemble the final product? Also, does the origin of the packaging materials matter (envelopes, stickers, etc.)

  • You would need to satisfy the RVC calculations set out in the CUSMA Rules of Origin, but it would not need to be explicitly declared when submitting the CUSMA certification form. It may be required to present to an authoritative body upon request.