Updated! - Import duties on art work of Chinese origin
The third phase of punitive import duties being imposed upon goods of Chinese origin – published last night - does NOT include original works of art, collectables, antiques, or photographs (HTSUS Chapters 97 and 49). This is good news for our industry and will allow most within the artworld to continue business as normal.
Please note that some contemporary works of art may fall into other categories not specified above.
Many articles of furniture covered under Chapter 69 and 94 of the HTSUS commodities code are on the list of regulated items. Those items include ceramics, lamps, seats, couches, mattresses, chandeliers, etc. In addition to current duty rates you can expect an immediate additional duty of 10 % on such items, possibly jumping to 25 % at the beginning of 2019.
It is important to contact your Dietl International Representative early to discuss and confirm the duty/tax implications of all your imports – especially if goods of Chinese origin are included in your shipments.
Potential 25% import duties on art work of Chinese origin
Dear Valued Partners,
The new additional import duty of 25% on artwork made in China has been in the news. Following please find some current facts for your information:
1) The punitive import duties are being implemented in 3 stages (Tranches).
The 1st tranche (effective July 6th) - and the 2nd tranche - (effective August 23rd) - do NOT include original works of art, antiques and photographs.
The final list of commodities for Tranche 2 is listed here:
There are no Chapter 49 (photographs), 94 (furniture) or 97 (original art & collectibles & antiques) commodities listed under this Tranche.
2) While Chapter 97 commodities are currently on the list for consideration, we do not know what commodities will end up on the final list or when third Tranche will go into effect.
At the direction of President Trump, the USTR is also reviewing a third list (or tranche) of products imported from China to the U.S. worth an additional $200B. The USTR is considering whether to impose tariffs of 10% or possibly 25% on that list of products. The comment period on that list ends September 6th. There is no indication in any public record of how soon after the end of comment period the final list will be determined and published, and when the additional tariffs will go into effect. At present, importation of art of Chinese origin will not be subject to the 25% tariff until mid to late September.
Proposed Modification of the action pursuant to section 301:
3) If Chapter 97 remains in the final list of published commodities for the 3rd tranche it will affect ALL works of Chinese Origin, regardless of where they are shipped from. If you decide to move inventory of Chinese origin from Europe to the US, you will still have to pay the 25 % import duty. Thus, you may want to consider returning any inventory you own to the US within the next month.
4) As part of the proposed tariff, the use of a foreign trade zone will not defer the additional 25% tariff on commodities.
"To ensure the effectiveness of the action, any merchandise subject to the increased tariffs admitted into a U.S. foreign trade zone on or after the effective date of the increased tariffs, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, would have to be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and would be subject upon entry for consumption to the additional duty."
Potential solutions if chapter 97 is included in the 3rd Tranche:
Please note the following information is based on current import regulations and dependent upon your individual shipping requirements, all information is subject to change. Please contact Dietl with any questions.
a) TIB - Import under a "Temporary Import Bond". The TIB is good for a period of 1 year and can be renewed in yearly increments up to 3 years.
Anything imported under TIB "MUST" be re-exported. If you fail to re-export any goods covered under TIB, you will pay a penalty of 2x (2 times) the duty amount - which in this case would be 75 % of the value!!!
b) Temporary import using a Carnet ATA. All works have to leave after the exhibition. Carnets are generally good for a period of 1 year - with some exceptions. China allows only 6 months.
c) Pay the import duties upon arrival and apply for a "duty drawback" upon re-export. It will tie up some cash, but you will be able to sell work off the wall. Of course, the 25 % import duty will probably make it difficult to sell any Chinese works to serious collectors going forward.
The drawback is a lengthy process and it can take up to 1 year to receive the refund for 99 % of the duties you paid for the returned property from the date of export.
For detailed costs pertaining to "duty drawback" upon re-export, please contact your Dietl representative.
We will continue to monitor the situation and of course keep you informed the moment we obtain additional relevant information.
Rock-It Cargo Secures Investment from ATL Partners to Expand End Markets