Hello,
This has been my experience based on buying a fair number of watches from overseas. One of the big issues is that the needs for the seller country are different than the recipient. The seller generally only cares about relief from the VAT. This is why they just put down “watch” on the export form and total cost which is insufficient.
Here in the US, imports are assessed by the harmonized code and usually this information is not available when the seller ships the watch. By the time this becomes an issue for the recipient, the watch is either on its way to the US or already here.
The harmonized codes help with the watch valuation. For watches, they start with a harmonized code of 9101.XX,XXX .
91
CLOCKS AND WATCHES AND PARTS THEREOF
9101
Wrist-watches, pocket-watches, stop-watches and other watches; with case of precious metal or of metal clad with precious metal
9102
Wrist-watches, pocket-watches, stop-watches and other watches, other than those of heading no. 9101
9103
Clocks; with watch movements, excluding clocks of heading no. 9104
9104
Instrument panel clocks and clocks of a similar type for vehicles, aircraft, spacecraft or vessels
9105
Clocks, other, n.e.c.
9106
Time of day recording apparatus and apparatus for measuring, recording or otherwise indicating intervals of time, with clock, watch movement or synchronous motor
9107
Time switches; with clock, watch movement or synchronous motor
9108
Watch movements; complete and assembled
9109
Clock movements; complete and assembled
9110
Watch or clock movements, complete, unassembled or partly assembled (movement sets); incomplete watch or clock movements, assembled; rough watch or clock movements
9111
Watch cases and parts thereof
9112
Clock cases and cases of a similar type for other goods of this chapter and parts thereof
9113
Watch straps, watch bands, watch bracelets and parts thereof
9114
Clock or watch parts; n.e.c. in chapter 91
From there, watches are generally watches are broken down into components:
- Movement ( code 9108)
- Case ( code 9111)
- Bracelet/strap (code 9113)
The sum of each of these components must equal the total cost of the watch on the invoice. This is where the fun starts. For mechanical watches, the movement is accessed by the number of jewel and charged at a rate per jewel regardless of the cost of the watch. The case and band are charged at a percentage of the declared value. I have had very valuable steel watches and paid a lot less in customs than a gold cased Patek--both from Europe. Why? Because I declared most of the value in the steel watches was in the movement.
Going back to FedEx…FedEx is not customs. I believe they have authority to collect customs fees for the US so that the package is not delayed. From my understanding, they prepay the customs for you and of course bill you later. If there is paperwork missing, I have been able to send prefilled out documents to the seller and ask them to sign and return to me and I forward on to FedEx.
One more thing to add. If you live in California, you may get charged with a use tax based. Here is the paragraph from the board of equalization.
Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.
For these purchases, the buyer is required to pay use tax separately.
They expect you to declare this on your income tax form. It seems that FedEx provides this shipping information to the state of California for packages that have a destination of that state. From there, it is easy for the state to determine who you are by your SSN and you will get a friendly letter that you owe the state of California money. By the way customs fees and use tax fees are not the same and unrelated. California looks at the invoice cost and charges you a flat rate.
This has been my experience so take it for what it is worth. If you are buying items from overseas with any frequency, I think it is important to understand how the process works.
Regards, George
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