All goods have to be classified when they are imported or exported. There are over 10,000 different classifications, and only one heading can be absolutely correct. The classification determines the duty rate that is applied to the value of the goods to work out the amount of duty due. Classification also influences other matters i.e. whether anti-dumping duty might be due, whether the goods require an import licence, whether they are entitled to a reduced or free rate of duty under preferences (see below), etc.

Correct classification is the most important part of customs planning and the area where errors most frequently occur.

Binding tariff information
Under EC legislation, an importer can apply in writing to any EU Customs authority for a written classification decision which will remain valid for six years (provided the decision issued was based on accurate and complete data, and provided there are no subsequent changes making the decision incompatible with EU law). These decisions are known as Binding Tariff Information ("BTI") decisions.

A BTI decision covers only one type of goods, and a separate application is required for each type of goods. The decision only applies to goods imported after the date of issue and is only binding on the named holder of the BTI. Once the decision is issued, it is available on the EU BTI database.

Duty suspensions
Where goods are not available in the Community, or where they are not available within the time limits specified by the customer, the European Commission is empowered under the Treaty of Rome to suspend the duty which would normally be payable on importation of those goods. Since duty is a tariff barrier intended to protect local industry, if there is no local industry to protect it is logical for there to be no customs duty. The European Commission recognises this logic and has set in place a procedure whereby customs duties may be suspended.

Suspensions which have been agreed are identified in the tariff and are generally restricted to extremely exact descriptions of particular goods. These goods are mainly components and tend to be in the electronics and chemicals sector but suspensions are not restricted to these areas and can be granted to any goods.

Obtaining a duty suspension for imported goods is a reasonably simple process although it takes many months to achieve.

Generalised System of Preferences
The EC allows goods from certain less developed countries in the world to be imported duty free or at reduced rates of duty, so as to encourage exports from those countries and to promote international trade. The system is known as the Generalised System of Preferences, or GSP. Reduced duty or duty free importation is limited to certain tariff headings, and in some cases to specified countries.