Meisterung der Zollabwicklung für Schuhimporte: Fachkundige Einblicke in Klassifizierung, Zolltarife und Freihandelsabkommen

Navigating the complexities of customs regulations can be a daunting challenge, especially for the footwear industry, where material choices and design decisions can significantly impact duty rates. In this article, we dive into the intricacies of customs classification for shoes, exploring how factors like upper materials, production locations, and free trade agreements influence the overall cost of importing footwear. Through a practical dialogue between Daniel Doerfler, a footwear engineer, and Thomas Woodtli, a customs expert, we uncover strategies to optimize the process and reduce costs, ensuring compliance and efficiency in global trade.

Daniel:

Hi Thomas, thank you for helping me with the release of a customer's shoe. We have already placed an order for 100,000 pairs in China and the factory is preparing for production. To prepare for shipment, we would like to know the customs clearance process and cost. Here are our shoes:

Materials

• Upper: 25% leather, 60% knit material, 10% TPU film & 5% synthetic mesh

• Colors: Grey, brown and black

• Sole: Compressed EVA & rubber

• Lacing system: Plastic eyelets

• Applications: Laminated TPU layer on the upper

Design Features

Upper Construction

• Leather Sections: Reinforced toe cap, heel area, and side panel for added protection and stability.

• Knit Material: Flexible and breathable knit in the midfoot area and tongue for a snug fit and comfort.

• Applications: Laminated TPU layer on the upper for additional protection and a modern look.

Sole

• Outsole: Durable rubber with a grippy profile for excellent traction.

• Midsole: EVA foam for cushioning and shock absorption.

Lacing System

• Eyelets: Plastic eyelets for easy adjustment and secure fit.

Thomas:

“Hello Daniel, happy to help you. The shoe looks great, what kind of shoe is it?”

Daniel:

“Thank you, what a journey this development has been, but we have made it and are very excited to start production.

We have developed an outdoor trekking shoe with multiple functions and an outstanding design with a mix of leather and knit material.

So, I think the easy part is now to bring the shoes to Germany and sell them to make money! Isn't it like that, right?”

Thomas:

“Sounds very intriguing. Are you sure this is the easy part?”

Daniel:

“Ahh yes, I hope so, you have the experience, like I know, how many years you work with all this customs and duty stuff? And now you even use and work with AI, you are actually part of traide AI? Please introduce yourself.”

Thomas:

“Hi, I’m Thomas Woodtli, and I’m currently diving into the world of AI at traide AI in Berlin, where I bring my expertise as a Customs Classification Expert. My journey in customs started back in 2007 with the Swiss Customs, where I learned the ins and outs of Swiss customs laws. From container checks at Zurich Airport to ensuring all those detailed “non-customs” regulations were followed, I got to know customs work from every angle. Over time, I moved into consulting and industry roles, helping companies handle the often-confusing world of customs tariffs, export controls, and trade agreements.

Now at traide AI, I’m blending this experience with AI, supporting our product development team to create tools that make customs compliance a little less painful for everyone. I get to work alongside talented colleagues, acting as a go-to resource on all things customs-related. What’s surprising, though, is just how challenging it can be to make it look easy! With complex, regularly changing regulations, every decision matters, and getting it wrong can be costly.

But that’s the fun part, too—finding new, tech-driven ways to simplify these tough tasks for businesses. Working at traide AI feels like the perfect spot to turn my knowledge into real innovation, and I’m excited to be part of the journey to make global trade a bit more manageable!

So, please also tell us: How did you become a footwear engineer? That sounds quite unique!”

Daniel:

“With more than two decades in the footwear industry, my journey began with a 3.5-year apprenticeship as an Orthopedic Shoemaker in Bavaria, Germany, where I learned the intricate craft of customizing orthopedic shoes and insoles by hand.

In 2009, I expanded my skills at the “Deutsche Schuhfachschule für Design & Technik”, studying shoe design, pattern engineering, quality management, and industrial manufacturing, which laid the groundwork for my career in industrial footwear. Over the years, I held roles in development and manufacturing with brands like HAIX and Nike, where I contributed to the creation of high-performance footwear for firefighting, military, and athletic footwear, collaborating with global teams across Europe and Asia to drive innovation and quality.

In 2023, I founded Footwear Solution to offer consulting services that help designers, brands, factories, and suppliers bring exceptional products to market by navigating the technical and strategic challenges of the footwear industry.

• Back to the shoe, how do we make sure we’re handling the customs process correctly for our trekking shoes?

From what I understand, the first step is getting the shoe properly classified.”

Understanding Customs Classification: Why Material and Design Matter

Thomas:

“Absolutely, Daniel. Correct classification is essential to avoid unexpected costs or delays at customs. With footwear, it’s all about determining the right heading in the customs tariff (also known as “Harmonized System”), based on specific characteristics of the shoe—like the material of the outer surface and sole.

Since your trekking shoe has a mix of leather and knit material, we’ll take a closer look into the correct heading within Chapter 64 of the customs tariff.

Here’s where it gets interesting: the main fabric of the upper shoe determines how the product should be classified.

According to Note 4(a) to Chapter 64, the "upper" material that covers most of the outer surface will play a key role in classification. If the majority is leather, we're looking at the heading 6403 ("Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather"), but if the majority is knit, we're likely to end up in a different heading 6404 ("Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials").

The material of the sole matters too, especially with outdoor shoes, as we need to assess what material dominates the contact with the ground but, of course, I suppose that the sole is predominately made of a rubber composite.

What I am wondering is:

• How would you as a footwear engineer approach ensuring that the design and material choices align with the classification requirements?

• For instance, how do you decide on the proportion of materials used in the upper to make sure it fits within the intended classification?

• And how do you document these material decisions to provide clear evidence if customs authorities need to review it?”

Daniel:

“Well, to be honest during development there is not really high attention to these classification requirements for design and material choices. The goal is to make a shoe follow the design intention and function required by the designer and brand's strategy. As well, satisfy consumer needs by design & fit and at the end of the day, make profit.

Of course, bigger brands take a more in-depth look into this, the higher the quantity, the higher is the benefit if they have less duty cost.

Regarding your question, I'd suggest looking at the development and manufacturing strategy during the concept phase of the project. It depends on where you want to ship the shoes, the product type, quantity, cost, and other requirements. This will help you determine where the shoes can be produced and which factories are suitable and available. This phase could be the first checkpoint about classification requirements, but it depends on the type of shoe you require.

The second step, after deciding on the country and factory of production, is to develop the first prototype based on the customer's requirements. This will help the factory to calculate the estimated price of the shoe by having the first BOM with material prices and consumption details. At this point, it makes sense to look at classification, if the design and material selection can be adjusted to come into a different classification and thus duty rate. For documentations, we will work closely with the factory to compile all the information.”

Duty Rates and Free Trade Agreements: How to Reduce Costs

Daniel:

• “So, there’s quite a bit of detail here already. And what about duties? I’ve heard that free trade agreements can help reduce them—can we use one?”

Thomas:

“I wish! Unfortunately, the EU doesn’t have a free trade agreement with China, so we’ll be paying standard import duties based on the HS code we determine. But by getting the classification exactly right, you’ll avoid any unnecessary duty expenses.

For this type of shoe, duty rates can vary: If leather forms the majority of the outer surface, heading 6403 is applicable and the duty rate is 8%. If knit material is predominant, the trekking shoes are classified in heading 6404 and the duty rate is 16,9%

As you now see: Even a small classification mistake could lead to paying more than needed. It’s one of those areas where experience really is helpful!”

Daniel:

“That makes a big difference, and it leads me to more questions.

• In general, what is the reason that leather has a lower duty rate than knit material?”

Thomas:

“That’s a tricky question, Daniel! Generally, leather products have been around longer and traditionally come with a certain level of durability and value, especially in items like footwear. Many HS headings reflect historical trade priorities or market protection measures. So, I can only guess at this point: Leather often has a lower duty rate as it’s historically considered a “premium” material with established markets, whereas textiles, particularly synthetic ones, are sometimes treated as less traditional, which can result in higher duties."

Daniel:

“Interesting!

• So how do we decide how much of each material to use to get the right classification?

• Is there a specific percentage for leather or knit material to make sure it’s classified correctly?”

Thomas:

“As I mentioned before, classification is governed solely by Note 4(a) to Chapter 64, which states that the material of the upper part, which covers most of the outer surface, is decisive for classification. This Note is part of the Harmonized System (HS) and is therefore applied as binding international law in almost all countries. This means that the main material, i.e. more than 50% of the outer surface covering material, is decisive for classification.”

Daniel

• “And you mentioned before about what material dominates the contact with the ground. Does that also impact the duty on our shoe?”

Thomas

“Good question! The Subheading Note 1 to Chapter 64 is key in determining the subheadings of 6403 and 6404 and lays out what qualifies as ‘sports footwear’ under certain subheadings. It’s pretty specific:

1. Shoes designed for sports with features thorns, staples, clamps, cleats or similar “attachments”—or prepared for them.

2. Shoes made for specific sports like skiing, boxing, cycling, etc., even without those attachments.

Looking at your shoe, it doesn’t have spikes, studs, or anything similar, and it’s not clearly for a specific sport like skiing or boxing. So, it doesn’t fit the definition of ‘sports footwear’ under these subheadings.

That said, even though the classification won’t fall under ‘sports footwear,’ we still need to consider other factors like the material of the upper and sole. While the upper material is the key factor for determining the heading, the sole material can influence the specific duty rate at the subheading level.

Rubber or plastic soles are common and preferred for outdoor and trekking shoes, impacting the duty slightly less than if the sole were leather.

However, the upper is ultimately the key factor here. Just to clarify, I’m specifically referring to duty rates for imports into the EU, as other regions may have different tariff structures and considerations.

Daniel:

“Got it.

• What about documentation? Anything specific we need to prepare?”

Thomas:

“Absolutely! First, we'll need the commercial invoice and packing list, which should detail what's in each shipment and its value. Then you'll need a bill of lading or airway bill, which is basically the shipment's travel ticket. The Certificate of Origin is also important, even though it won't reduce duties because of the lack of an EU-China free trade agreement. It still helps document where the goods come from, which is sometimes required for customs records. It's also useful for determining whether anti-dumping duties apply.”

Anti-Dumping Duties in Footwear: What Importers Need to Know

Daniel:

• “Could shoes be subject to anti-dumping duties? What are anti-dumping duties?”

Thomas

“Yes, anti-dumping duties can indeed apply to shoes, though it depends on the specific circumstances and trade agreements in place. Anti-dumping duties are additional tariffs imposed by a country to protect its domestic industry from foreign companies selling goods at prices below fair market value—what’s called “dumping.”

In the EU, anti-dumping measures are often taken if it’s determined that certain products from specific countries are being sold at unfairly low prices, potentially harming local manufacturers. For example, the EU has previously applied anti-dumping duties to footwear from certain countries. However, at the moment, there are no anti-dumping duties on shoes. This was the case in the past, but currently, we’re primarily focused on standard customs duties for our imports.

That said, it’s always a good idea to keep an eye on any developments regarding anti-dumping measures, as these can impact overall import costs.”

Daniel:

“Thanks, Thomas, that's really helpful! It turns out getting those shoes to Germany isn't quite as straightforward as I thought, and moreover, the duty rates are pretty high.

• Do you think there are alternatives for the future?

• What if we produced the trekking shoes in Vietnam?”

Thomas:

“Great question! Exploring alternative manufacturing countries can indeed impact duty rates significantly. Vietnam, for example, could be a smart move. The EU has a free trade agreement (FTA) with Vietnam, which means that goods meeting certain rules of origin can enter the EU with reduced or even zero tariffs. For your trekking shoes, this could make a big difference in overall cost.”

Daniel:

“That’s interesting!

• So, what does it mean for the classification and the process if we produce the shoes in Vietnam?”

Thomas:

“The classification itself wouldn’t change since it’s based on the shoe’s material and construction, but the origin plays a big role in duties. To benefit from the FTA with Vietnam, your shoes would need to meet the specific rules of origin laid out in the agreement.

For both headings, which I mentioned earlier, the rule of origin says:

“Manufacture from materials of any heading, except assemblies of uppers attached to insoles or other sole components of heading 6406.”

Daniel:

“Uh, that sounds tricky!

• So, to benefit from the EU-Vietnam FTA, what do we need to do to meet that rule of origin you mentioned?”

Thomas:

To satisfy that rule of origin, you need to ensure that your manufacturing process in Vietnam covers assembling the shoes in a way that the most significant part of the production takes place there. This means you can’t ship semi-finished shoes with attached uppers to Vietnam and just add soles there; the substantial transformation must occur in Vietnam.

Daniel:

• “Where the raw material comes from doesn’t impact anything, only the production of the shoe?”

Thomas:

“That’s right, for these specific shoes classified in headings 6403 and 6404. When it comes to free trade agreements and these shoes, it’s not the origin of the raw materials themselves, but rather where and how the final product is manufactured that matters.

The substantial transformation—meaning the key stages of production—must occur in the country with the FTA, in this case, Vietnam, to qualify for reduced tariffs under the EU-Vietnam Free Trade Agreement. This “transformation” is what creates the product’s origin, so as long as the main assembly and finishing steps take place in Vietnam, the raw materials themselves don’t affect the eligibility for preferential treatment."

Daniel:

• Got it. So, what kind of documentation would we need to prove this and take advantage of the tariff benefits?

Documentation and Compliance: Avoiding Costly Mistakes

Thomas:

“If you want to claim reduced or zero tariffs, you'll need a Certificate of Origin called EUR.1. For the EU-Vietnam FTA, the EUR.1 can be issued by the relevant authorities in Vietnam. Alternatively, if the single shipment of shoes doesn't exceed 6000 EUR in value, your Vietnamese supplier can self-certify the origin by printing the declaration of origin in the invoice. This certificate proves that your trekking shoes meet the origin criteria set out in the FTA.”

Daniel:

• “Wow that’s interesting, does this EUR 6000 also count for shipment from China?”

Thomas:

“The 6,000 EUR self-certification limit applies specifically to countries with which the EU has a free trade agreement, like Vietnam. Since the EU doesn’t have an FTA with China, this self-certification rule unfortunately doesn’t apply to shipments from there. For imports from China, you’ll need to go through the standard customs clearance process without the benefit of preferential tariffs.”

Daniel:

• “Is there anything else we should prepare to make sure everything goes smoothly with customs?”

Thomas:

“Absolutely! Alongside the Certificate of Origin, make sure you have a robust Bill of Materials (BOM) and supporting documents that outline where each part of the shoe comes from and how the manufacturing steps meet the rules of origin. Customs authorities may request these to verify the certificate’s authenticity. It’s also essential that the BOM clearly shows the customs tariff number (HS code) and the value of each component. Additionally, keeping records of contracts with your Vietnamese manufacturer, production orders, and any quality checks or certificates tied to the manufacturing process is a smart move.”

Daniel:

“This definitely adds another layer to our supply chain, but the potential savings on duties sound worth it.”

Thomas:

“Exactly. The upfront work of setting up compliant documentation and making sure your process is transparent can pay off in significant duty savings. Plus, it positions your company as a well-prepared importer, which customs authorities appreciate. With proper planning and the right partnerships, taking advantage of FTAs like the one with Vietnam can make your operations more cost-effective.”

Daniel:

“That’s excellent advice, Thomas. Thanks for breaking it down! It turns out there’s quite a bit of strategy involved in moving production to a country with a free trade agreement.

• Just out of curiosity and to conclude—how much would the customs duties in the EU / Germany be if the manufacturing cost in China for each pair of shoes is USD 30?”

Thomas:

“Good question! For an import from China to Germany, with 100,000 pairs and at the normal duty rate of 16.9% as mentioned before, you’d be looking at customs duties of approximately USD 507,000. But if you had manufactured the shoes in Vietnam instead, you could have saved that entire amount thanks to the EU-Vietnam Free Trade Agreement.”

How does traideGo classify the specific shoes?

1. Product understanding:

• Product: outdoor trekking shoe

• Materials: upper made of 60% textile material (PE), 25% leather, 10% TPU film and 5% synthetic mesh. Rubber sole.

• Design features: reinforced toe cap, leather heel and side wall, flexible knitted material in the midfoot area and on the tongue, TPU layer on the upper material, durable rubber sole with a grippy profile, EVA midsole, plastic eyelets.

2. Tariff classification analysis:

• Chapter 64: Footwear, gaiters and the like; parts of such articles.

• Relevant notes: Note 4(a) to Chapter 64: The material making up the upper is the material that constitutes the major part of the external surface, whatever accessories or reinforcements it may contain ([Notes to “Chapter 64 (§ 1, 2, 4)”]).

• Additional Note 1 to Chapter 64: Reinforcements are pieces that cover the outer surface of the upper and give it greater strength ([Additional notes for “Chapter 64 (§ 0, 1)”]).

• Relevant BTI rulings: [DEBTI23839/22-1]: Boots with outer soles of plastic and uppers of textile materials, other than those mentioned in subheadings [6404 1100] to [6404 1910] ([DEBTI23839/22-1]). [DEBTI40930/23-1]: Men's or women's leather uppers with outer soles of plastic, with in-sole length >= 24 cm, not recognizable ([DEBTI40930/23-1]).

3. Tariff number(s):

• Possible tariff number: [64041990] (footwear with outer soles of plastic and uppers of textile materials, other than those mentioned in subheadings [6404 1100] to [6404 1910]).

4. Reason:

• Legal reasoning: GRI 1 and GRI 6: Classification is according to the General Rules for the Interpretation of the Tariff. Note 4(a) to Chapter 64: The upper material is mainly made of textile material (PE), which forms the largest part of the outer surface. Therefore, the upper material is classified as a textile material. Additional Note 1 to Chapter 64: The leather sections (reinforcements) are not decisive for determining the upper material. BTI [DEBTI23839/22-1]: Similar products have been classified under tariff number [64041990], which supports the consistency of classification.

5. Request for additional information:

• No further information needed: The product description is sufficiently detailed.

6. Summary:

• Outcome: The outdoor trekking boot is classified under tariff number [64041990].

• Reasoning: The classification is based on the General Rules for the Interpretation of the Tariff, the Notes and Additional Notes to Chapter 64 and the Binding Tariff Information Decisions.