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.
*The below information is based on the General Rules of Interpretation (GRIs)
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)]:
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.
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.
What determines essential character will vary between different goods and may be determined by:
You can refer to CBP’s Informed Compliance publication on Classification of Sets for further information and rules on the topic.
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.
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:
The essential character of this would then become the pasta, and the US HTS would be 1902.19.4000
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.
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