The third phase of punitive import duties being imposed upon goods of Chinese origin – published last night - does NOT include original works of art, collectables, antiques, or photographs (HTSUS Chapters 97 and 49). This is good news for our industry and will allow most within the artworld to continue business as normal.
Please note that some contemporary works of art may fall into other categories not specified above.
Many articles of furniture covered under Chapter 69 and 94 of the HTSUS commodities code are on the list of regulated items. Those items include ceramics, lamps, seats, couches, mattresses, chandeliers, etc. In addition to current duty rates you can expect an immediate additional duty of 10 % on such items, possibly jumping to 25 % at the beginning of 2019.
It is important to contact your Dietl International Representative early to discuss and confirm the duty/tax implications of all your imports – especially if goods of Chinese origin are included in your shipments.
1) The punitive import duties are being implemented in 3 stages (Tranches).
The 1st tranche (effective July 6th) - and the 2nd tranche - (effective August 23rd) - do NOT include original works of art, antiques and photographs.
There are no Chapter 49 (photographs), 94 (furniture) or 97 (original art & collectibles & antiques) commodities listed under this Tranche.
2) While Chapter 97 commodities are currently on the list for consideration, we do not know what commodities will end up on the final list or when third Tranche will go into effect.
At the direction of President Trump, the USTR is also reviewing a third list (or tranche) of products imported from China to the U.S. worth an additional $200B. The USTR is considering whether to impose tariffs of 10% or possibly 25% on that list of products. The comment period on that list ends September 6th. There is no indication in any public record of how soon after the end of comment period the final list will be determined and published, and when the additional tariffs will go into effect. At present, importation of art of Chinese origin will not be subject to the 25% tariff until mid to late September.
3) If Chapter 97 remains in the final list of published commodities for the 3rd tranche it will affect ALL works of Chinese Origin, regardless of where they are shipped from. If you decide to move inventory of Chinese origin from Europe to the US, you will still have to pay the 25 % import duty. Thus, you may want to consider returning any inventory you own to the US within the next month.
4) As part of the proposed tariff, the use of a foreign trade zone will not defer the additional 25% tariff on commodities.
"To ensure the effectiveness of the action, any merchandise subject to the increased tariffs admitted into a U.S. foreign trade zone on or after the effective date of the increased tariffs, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, would have to be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and would be subject upon entry for consumption to the additional duty."
Please note the following information is based on current import regulations and dependent upon your individual shipping requirements, all information is subject to change. Please contact Dietl with any questions.
a) TIB - Import under a "Temporary Import Bond". The TIB is good for a period of 1 year and can be renewed in yearly increments up to 3 years.
Anything imported under TIB "MUST" be re-exported. If you fail to re-export any goods covered under TIB, you will pay a penalty of 2x (2 times) the duty amount - which in this case would be 75 % of the value!!!
b) Temporary import using a Carnet ATA. All works have to leave after the exhibition. Carnets are generally good for a period of 1 year - with some exceptions. China allows only 6 months.
c) Pay the import duties upon arrival and apply for a "duty drawback" upon re-export. It will tie up some cash, but you will be able to sell work off the wall. Of course, the 25 % import duty will probably make it difficult to sell any Chinese works to serious collectors going forward.
The drawback is a lengthy process and it can take up to 1 year to receive the refund for 99 % of the duties you paid for the returned property from the date of export.
For detailed costs pertaining to "duty drawback" upon re-export, please contact your Dietl representative.
We will continue to monitor the situation and of course keep you informed the moment we obtain additional relevant information.
NEW YORK and LOS ANGELES, July 31, 2018 ─ ATL Partners (“ATL”) announced today that it has acquired a majority stake in Rock-It Cargo USA LLC, the parent company of Dietl International. Together, Rock-It Cargo and Dietl International are leading providers of mission-critical international freight forwarding solutions to fine arts, live entertainment and music touring, sports, corporate events, industrial power projects, and humanitarian relief end markets. Existing senior management including Dietl International Founder and President Fritz Dietl, and Rock-it Cargo Founder and Chief Executive Officer David Charles Bernstein, will maintain an equity stake in the company. All existing management and staff of Dietl International will continue to provide the high level of service our customers have come to expect.
This partnership will allow Dietl to continue its growth in domestic markets, create opportunity to build on existing relationships with partner agents overseas, and further solidify its place within the U.S. market as one of the most trusted providers of art logistics.
The partnership between Dietl International and Rock-it Cargo began in 2008. Since that time Dietl has expanded its reach to nine offices and over 70 employees within the United States, most recently opening a new branch in Houston, TX. Founded by Fritz Dietl in 1991, what began as a small, twoperson office at JFK airport in New York has become the largest logistics provider in the United States devoted entirely to the special needs and requirements of shipping artwork.
Dietl International is looking forward to partnering with ATL and will continue to provide excellent service to its agent partners world-wide as well as our clientele of collectors, galleries, auction houses and museums.