Understanding Kits, Sets, or Bundles when Shipping Internationally
Creating kits, sets, and bundles is a great way to offer value to your customers and sell more products. But when shipping internationally, specific rules and thresholds need to be met to constitute as a kit, set, or bundle. These rules and thresholds are standardized globally and are defined by U.S. CBP (Customs and Border Protection), WCO (The World Customs Organization), and customs agencies worldwide.
We’ve written this article to help you understand if your goods meet the specific customs definitions and qualify as a set, to offer assistance in adequately classifying your goods if they qualify as a set, and provide a basic illustrative example.
What you need to know when shipping international kits, sets, and bundles.
- Your products need to meet the requirements to classify them as a set so that you can use one HTS code for the kit.
- If your products don’t meet the threshold to be designated as a set, they cannot be shipped internationally as a set. Each item must be listed separately, along with unique HTS codes and unique customs values for each item.
- If you meet the criteria for a set, the classification will then be the material/component that gives the set its essential character. I.e., a pasta kit containing spaghetti, cheese, and sauce could classify as a pasta set rather than its individual ingredients.
*The below information is based on the General Rules of Interpretation (GRIs)
Requirements for a Grouping of Products to be Considered a Set When Shipped Internationally:
There are three requirements for items to be classified as a set for international retail sale outlined in [Explanatory Note “EN” X to GRI 3(b)]:
- Consist of at least two different articles, which are classified in different headings (first four digits of the HTS)
- Consist of products/items when put together meet a particular need or carry out a specific activity
- Are assembled suitably for sale directly to users without repacking
NOTE—If your product grouping does not meet all three requirements, do not proceed further, as it may not be considered a set/kit, and each product needs to be itemized separately.
How Sets are to be Classified for HTS Codes (Outlined in Explanatory Notes “EN” to GRI 3(b)]
Goods consisting of different materials or components and goods within a set for retail sale, which cannot be classified by reference GRI 3(a), are classified as if they consist of the material/components which give them their essential character, i.e., in our simple example of a pasta kit, the HTS code would be pasta.
How to Determine the Essential Character Outlined in [Explanatory Notes “EN” to GRI 3(b)]:
What determines essential character will vary between different goods and may be determined by:
- nature of the material/components.
- bulk, quantity, weight/value. Or;
- by the role of constituent material in relation to the use of the goods.
You can refer to CBP’s Informed Compliance publication on Classification of Sets for further information and rules on the topic.
Application Examples and Classification per Essential Character
Determining whether your goods qualify as a set can be a relatively complicated and convoluted. Other prerequisites outlined in this process are also complex. So, to assist in this, we’re providing a basic example and including an assignment of the HTS per the essential character.
Remember, the goods must meet a particular need or carry out a specific activity—CBP outlines what constitutes a “particular need” or a “specific activity” in the same Classification of Sets publication, pages 11-16. Each component would need to be used together or in conjunction with another for a single purpose or activity and in a manner with a clear intention to be used together.
Example 1 Pasta Kit
A real-world example of a set would be a product grouping containing spaghetti (HTS heading 1902), tomato sauce (HTS heading 2103), and fresh cheese (HTS heading 0406), which is packaged together, labeled, and sold as a “pasta set”. This meets the three criteria to be considered a set:
- Consist of at least two different articles, which are classified in different headings √
- Consist of products/articles put together to meet a particular need or carry out a specific activity √
- Are put up suitably for sale directly to users without repacking √
The essential character of this would then become the pasta, and the US HTS would be 1902.19.4000
Example 2: Promotional marketing packs, sample gift collections, etc.
While there may be at least two different components from different headings, often there is not a clearly defined particular need/activity for the grouping; instead, in this case, a vague application of promotional marketing. These packs are additionally not packaged appropriately for sale directly to users without repacking. Therefore, this example would fall short of meeting the requirements to be classified as a set per customs.
FlavorCloud and Customs Compliance
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