Binding Rulings

Corporate Services Trade Tariff & Trade, Excise & Valuation Binding Rulings

What is a Binding Ruling?

A Binding Ruling (also known as an advance ruling) is a written decision issued by Customs to a specific importer, trader, broker, or industry representative relating to regulations or laws in force – without the need for the goods to have first been imported.

ℹ️ Key Purpose: To provide advance and consistent tariff advice to companies in order to facilitate compliance with Customs requirements.

Types of Binding Rulings

The most common decisions issued by Customs are:

Tariff Classification Helps importers, exporters, and traders obtain the correct tariff classification for goods they plan to import or export.
Origin Determines the country of origin of goods for tariff preference purposes.
Valuation Establishes the correct customs value of goods for duty calculation.

Why do Tariff Classification Matter?

The tariff heading of goods determines:

  •   The rates of duties applicable
  •   Application of different legal provisions such as:
    • Import/export licences
    • Rules of origin
    • Security standards

Benefits of a Binding Ruling

Legal Guarantee There is a legal guarantee that the decision will be applied.
Cost Predictability Traders can predict their costs prior to import or export.
Reduced Formalities Helps importers or exporters reduce Customs clearance formalities.
Expedited Release Consequently expedites the release of goods from Customs control.

Validity and Expiry of Rulings

When Does a Ruling Cease to Have Effect?

A ruling provided by Customs at the request of a trader may be valid for a specified period as stated in the ruling, or when circumstances change. Rulings cease to have effect when:

Grounds for Expiry Description
Information Changes Information relied on to make a ruling ceases to be correct in all material respects.
Factual Changes A change in any of the information or facts on which the ruling was made.
Legal Changes A change in the Customs Tariff Act or other applicable law, if that date occurs prior to importation or manufacture of the relevant goods.
Non-Compliance Conditions to which the ruling is subject are not met or complied with.
Failure to Satisfy Requirements Failure to satisfy the requirements of the Commissioner under Section 176E of the Customs Act.
Time Expiry The date of expiry of 3 years from the date that notice of the ruling (or any amendment to that ruling) was issued.

The Application Process

Step 1: Prepare Your Written Request
  • The request to Customs must be in writing.
  • Must include all necessary information:
    • Detailed description of the goods
    • Possible inclusion of samples, plans, various documents, etc.
  • PGK 300 applies for each application.
⚠️ Warning

Should the request contain incorrect or incomplete information, the ruling based on such information could be revoked.

Step 2: Customs Review and Response
  •   Within 15 working days Customs must make the ruling in writing.
  •   Where a ruling cannot be made within this time (15 days), Customs must:
    • Advise the applicant of the reasons
    • Inform the applicant of the expected date the ruling will be made
Step 3: Receive Your Ruling
  • Binding Effect: The ruling is binding on Customs.
  • Validity Period: Valid for a specified period or as stated in the ruling.
Step 4: Using Your Ruling
Who Can Use It?

Only the holder or the trader that requested the ruling can call upon its application.

Proof Required

The holder must demonstrate that the goods presented and the goods described in the ruling correspond in every respect.

Step 5: Publication

Rulings are generally made public to ensure:

  •   Transparency
  •   Equal treatment of traders
  •   Uniform application of Customs laws

Need more information?

For further information on binding rulings - contact Tariff and Trade Section, PNG Customs Service

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