NEWS
2/17/2022
Increase in Airline storage Fees
Airlines have started to increase storage fees and reduced the amount of free time an import is allowed to sit in storage before collecting fees. The standard free time before storage fees are incurred is now between 24-48 hours.
This means that it’s even more important to notify your Dietl representative at least a week in advance of shipment departure to make sure the clearance is organized, and that trucking has been scheduled for immediate collection.
If shipments arrives on one a Thursday or Friday and is not able to be collected until the weekend, additional fees may apply.
1/27/2022
Change in classification for Chapter 97 Works of Art, Collectors' Pieces and Antiques
Effective January 27th, 2022, US Customs will update the itemized classification for artworks under Chapter 97 in the harmonized tariff code.
Why is this important? Because Dietl will need this information on your customs Invoice in order to process the customs clearance on any Imports entering the U.S.
The new system of classifications' intent is to distinguish the age range of an artwork as being less than, or greater than 100 years old.
For instance:
Paintings/drawing/pastel
In the past, one would declare a painting of any age with the code 9701.100000
• Now, painting greater than 100 years old will be: 9701.210000
• A painting less than 100 years old will be: 9701.910000
Lithographs/engravings
In the past, one would declare an engraving or lithograph of any age with the code 9702.000000
• Now, an engraving or lithograph greater than 100 years old will be: 9702.100000
• An engraving or lithograph less than 100 years old will be: 9702.900000
Sculpture
In the past, one would declare a sculpture of any age with the code 9703.000000
• Now, a sculpture greater than 100 years old will be: 9703.100000
• A sculpture less than 100 years old will be: 9703.900000
Antiques
Antiques (9706.000) will still be classified as an object over 100 years old. The new classification system will in addition record if an antique is less than or greater than 250 years old.
For instance:
In the past, one would declare an antique that was simply older than 100 years as: 9706.000000
• Now, an antique that is greater than 250 years old will be: 9706.100000
• An antique less than 250 years old will be: 9706.900000
This update will not affect the current duties on artworks entering the U.S..
Artworks originating from mainland China are still accessed a 7.5% Duty
Please make sure to state the age range of the artwork in regards to these new classifications on your customs invoice.
You may say less than or more than 100 years old, and for antiques please state less than or more than 250 years old.
If you have any questions, please contact your Dietl representative.
3/16/2021
US Duties on Photography From the UK and Germany Temporarily Suspended
The European Union and the United States agreed on the mutual suspension for four months of the tariffs related to the World Trade Organization (WTO) Aircraft disputes. The suspension will cover all tariffs both on aircraft as well as on non-aircraft products.
The suspension is effective for products of the EU entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time on March 11, 2021 and before 12:01 a.m. Eastern Standard Time on July 11, 2021.
The suspension is effective for products of the UK on imports, or warehouse withdrawals for consumption, on or after 12:01 a.m. Eastern Standard Time on March 4, 2021 and before 12:01 a.m. eastern standard time on July 4, 2021.
Please note the difference in dates for the EU and UK suspensions.
This suspension will temporarily remove the 25% Duty that was applied to contemporary photographs and lithographs from Germany and the United Kingdom that took effect on October 18th, 2019.
HTS Codes:
4911.91.40- Pictures, designs and photographs, excluding lithographs on paper or paperboard, printed not over 20 years at time of importation
4911.91.20- Lithographs on paper or paperboard, not over 0.51 mm in thickness, printed not over 20 years at time of importation
4911.91.30- Lithographs on paper or paperboard, over 0.51 mm in thickness, printed not over 20 years at time of importation
9/1/2020
UPDATED: Exceptions granted on duties for artwork of Chinese origin
Mainland Chinese Artworks
On August 31, 2020, the Office of the United States Trade Representative (“USTR”) announced extensions for certain exclusions from the China 301 List 4 tariffs (the $300 billion trade action) set to expire of September 1, 2020. The extensions will run through December 31, 2020.
Unless extended under the current action or prior actions, exclusions will expire on their previously scheduled expiration date.
The product exclusion extensions announced in this notice will apply as of September 1, 2020, and extend through December 31, 2020
Products included in this extension are:
(85) Paintings, drawings or pastels, each executed entirely by hand (the foregoing other than drawings of heading 4906 and other than hand-painted or hand-decorated manufactured articles), each measuring not more than 300 cm by not more than 2,000 cm (described in statistical reporting number 9701.10.0000)
Products not yet included that we hope to see added soon: Sculpture, Photography, Antiques, Collages, Engravings, Prints and Lithographs.
https://ustr.gov/sites/default/files/enforcement/301Investigations/%24300_Billion_Exclusion_Extensions_August_2020.pdf
Please contact your Dietl representative if you have any questions. We will continue to advise our clients as more information is provided.
7/20/2020
Exceptions granted on duties for artwork of Chinese origin, new Tariffs will be imposed on artworks of Hong Kong origin
Mainland Chinese Artworks
On Friday July 17th, the US Trade Representative’s office provided guidance and authority to CBP to allow Section 301 exclusions to apply to artworks of Chinese origin that were Dutiable at a rate of 7.5% upon entry into the United States.
These exceptions include:
9701.10.0000 Paintings, Drawings and Pastels
9701.90.0000 Collages And Similar Decorative Plaques
9702.00.0000 Original Engravings, Prints And Lithographs
9703.00.0000 Original Sculptures And Statuary, In Any Material
NOT INCLUDED: Photography
Pictures, designs and photographs except for lithographs not over 20 years old classified under 4911.91 are still subject to Section 301 duty
These exceptions are set to expire on September 1st, 2020 as per the Federal Register notice published on 26 June. The US Trade Representative’s office is considering a possible extension for up to 12 months of exclusions granted so far. Dietl recommends that those parties who utilize these exclusions that are to expire on 1 September take advantage of the opportunity to comment to the USTR through the public docket at https://comments.ustr.gov/s/.
Hong Kong Artworks
On July 14th the President of the United States signed an executive order normalizing trade between the U.S. and Hong Kong, removing its preferred status.
Within 15 days of the date of the President’s Executive Order changing the relationship of Hong Kong relative to the US, it is likely that Section 301 and any other trade sanctions including Section 232, anti-dumping and counter-vailing duties that apply to China will apply to Hong Kong as well.
This will mean artworks of Hong Kong origin will be dutiable at a rate of 7.5%, the same as mainland Chinese works of art. We are awaiting an announcement and HTSUS updates from CBP, the US Trade Representative’s office (USTR), the International Trade Commission (ITC) and other agencies regarding these matters. It is highly likely that no public comments will be taken.
It cannot be determined at this time but is highly likely that any Section 301 exclusions granted for artworks of Chinese origin will also be extended to the same types of art of Hong Kong origin.
https://www.whitehouse.gov/presidential-actions/presidents-executive-order-hong-kong-normalization/
Please contact your Dietl representative if you have any questions. We will continue to advise our clients as more information is provided
Fritz Dietl speaks with The Art Newspaper for their article:
As numerous art organisations announce furloughs and lay-offs while a record 6.6 million American workers file for unemployment this week, the art logistics company Dietl has launched a platform to sell works of art by laid-off art technicians.
According to the founder of the company, Fritz Dietl, art handlers are often artists subsidising their practice with income from temporary gigs at fairs, galleries and museums. “We realised that they are extremely vulnerable in the current economic crisis with absolutely no safety net and no chance for any income in the foreseeable future,” Dietl says. “But they are the silent, incredibly talented and necessary force behind-the-scenes—the art world, in normal times, simply cannot function without them.”
4/3/2020
Fritz Dietl speaks with Withers Worldwide for their article:
The Art Market Adjusts: How global art transport and storage businesses are operating during limited mobility :by Diana Wierbicki
One of the major topics of discussions that I have been having over the last month has been about the interruptions to art shipping and access to art viewing rooms. When it comes to art market economics, we are all acutely aware that art shipping is a vital component necessary to complete transactions. In a matter of months, canceled art fairs, auctions, and exhibitions globally have brought many planned art shipments to a pause, leaving no segment of the art industry unaffected. Even though some collectors are still looking to relocate art, the ease of moving art is becoming increasingly difficult as the virus moves across the globe, and this is, unfortunately, affecting private sales as well. While logistic solution businesses are considered essential businesses and allowed to operate, they warn there will be extra time and measures needed for moving and storing art in this environment.
In this Q&A, I spoke with Fritz Dietl, President of Dietl International, a fine art and logistics solutions provider about the impact on art transport and art storage as the movement of art and people pause because of the coronavirus.
The Art Market Adjusts: How global art transport and storage businesses are operating during limited mobility
Diana: Fritz, we have had a number of conversations lately about shipping logistics – about when, how and at what cost. Can you explain how the measures taken globally to slow the spread of COVID-19 have had an impact on art transport?
Fritz: It has absolutely had an impact on many different levels. The combination of canceled art fairs, canceled auctions, canceled gallery shows, and closed museums has basically brought the entire industry to a complete standstill. If you add the lost freight capacity (a lot of airfreight moves in the belly of regular passenger flights) and the increased cost and bottlenecks of the remaining freight space, as well as, confusing government restrictions of what is or is not allowed to move on the streets, you quickly realize that it has become almost impossible to continue business in any form right now.
We have clients who still want to move some art, for whatever reason, but we have to caution everyone to allow extra time and not expect the usual levels of service.
Diana: Have you encountered any of these types of transport hurdles before?
Fritz: We briefly encountered this after 9/11, but that was a local event, and at least the logistics world quickly came back to normal, albeit with new sets of security regulations, which are in effect to this day.
We certainly also felt the recession of 2008, however, that was just a brief loss of confidence in the market, and especially the art market quickly rebounded.
This event certainly feels a lot different from anything we have ever experienced before.
Diana: As the virus has moved across the globe, how does the transportation situation compare in the different regions?
Fritz: Logistics companies are still allowed to operate in the US thus we can still put trucks on the road, but it is becoming increasingly difficult to find fine art truckers still willing to operate under the current circumstances.
Inner European transports have largely stopped for the time being since borders are closed. Thus if we can’t find a direct flight (as mentioned earlier, this is increasingly difficult as well), then we may not be able to move shipments to their final destination until the current restrictions are lifted.
In Asia, we see some signs of life, but with the limited flight capacities continue to be a challenge to service clients in that region as well.
Diana: In addition to art shipping, art storage has also been affected. How is your Delaware Freeport storage facility handling the current situation?
Fritz: We, of course, implemented all the necessary steps to keep our staff safe, including regular cleaning and disinfection of surfaces, as well as limiting access to our facility to all outside personnel. Outside vendors who deliver or pick up property are required to stay outside while our personnel handles the receive/release & safe loading of property.
We have a very small staff working inside our warehouse, and almost all functions in the warehouse can be performed while maintaining proper social distancing. Our crew is equipped with masks, goggles, and latex gloves thus whenever they do have to work closely together, they are still protecting themselves and each other.
All of our office staff are working from home for the time being to further reduce the number of personal interactions in our warehouse.
Diana: Are clients permitted to access their storage units?
Fritz: It is rare that clients personally come to our warehouse in Delaware (though we have regular visits from conservators; photographers & registrars), but with proper notice we will continue to set up and display their property in our viewing rooms. We encourage our clients to let us handle all necessary services in house with our on site team, but if it is critical we will continue to give access to clients, conservators, photographers and registrars with proper social distancing and protective gear protocols in place.
Diana: What advice do you have for collectors and art businesses who may want or need to move or store art during the next several months?
Fritz: 1. Some of the smaller operators may have a hard time surviving this crisis. The cash run rate of many art storage/ handling companies already forced many of them to lay off most of their staff (after only 2 weeks of lost business), so be careful whom you trust with your property. Will the warehouse where you have your valuable collection be able to keep their doors open and their lights on? If you already got notice that the facility is closed and you won’t have any access to your property, then you should at least ask a few pointed questions and get enough assurance that the temporary closure is indeed just temporary.
2. You may be able to negotiate some relief with your storage providers, but keep Point 1 in mind if your storage provider is out of business, you may have a hard time getting your property back. So continue to pay your storage bills and follow Diana’s advice about protecting your art from creditors, just in case.
3. If you need to move art now, don’t expect business as usual. While we can and are still putting trucks on the road (logistics companies are deemed “essential” and allowed to operate even in NY), we may not have access to your property if your warehouse is closed.
Also, expect that movements may be more expensive than usual. We book such few jobs currently that almost every transaction comes with a “full day rate” for truck & crew.
03/12/2020
COVID-19 Continuity Plan
Dietl International has implemented a continuity plan in order to address the health and well-being of our staff and the needs of our clients due to the evolving COVID-19 public health threat.
Starting March 12th, a majority of staff will work from home until further notice. The bulk of our work can be performed and monitored remotely. All key employees have a remote office set up and thus are fully functional. Our office phones, emails, and cell phones will continue to be answered. Requests will be responded to in a timely manner.
Our JFK office will continue to produce shipping documentation and will be staffed in alternating weekly shifts. Due to the large size of the office employees will maintain a safe distance from each other during their shifts. All our offices will be deep cleaned on a regular basis in between shifts.
Our airport supervisors will be dispatched directly from their homes to the cargo terminals.
Dietl's nine regional offices around the country are following the same procedures. Back up contacts and regional support will be organized in case of emergencies on a case by case basis.
Internally, all of our files and information can be accessed by our staff via the cloud and are accessible to management. Each employee's workload and transactions are visible and accessible at any time to maintain business continuity and excellent customer service. Our usual and strict data security protocols are in place and followed.
The biggest challenges we see going forward are supply chain issues - cancelled flights, cancelled trucks, increasing airfreight rates because of limited availability, slower handling at ports and airports because of staff shortages, etc. We are diligently preparing every shipment and maintain open and clear communications with all our clients and vendors to assure the safety and prompt movement of our shipments. We will communicate any issues we anticipate or experience clearly and immediately with your team.
02/04/2020
IMPORTANT INFORMATION ON CORONAVIRUS FLIGHT CANCELLATIONS
Please note that some Cargo and passenger flights have EXPERIENCED delays and service INTERRUPTIONs due to the recent outbreak of the coronAvirus. Airlines continue to reduce capacity as a PRECAUTIONARY measure. If your flight does not ORIGINATE from Asia it may still be affected due to international routing.
Please check with your dietl REPRESENTATIVE for potential delays or flight cancellations on your upcoming shipments
01/27/2020
Update on US and Chinese Trade Negotiations
U.S. Tariffs on Artwork of Chinese Origin will be reduced to 7.5%In accordance with the direction of the President, the U.S. Trade Representative has decided to reduce the rate of additional duty on certain products of China from 15 percent to 7.5 percent on February 14, 2020
https://ustr.gov/sites/default/files/enforcement/301Investigations/Notice_of_Modification-January_2020.pdf
* An artwork of Chinese origin is determined by its production location. If fabricated within mainland China, it will be subject to these tariffs regardless of its current location when imported into the United States.
Please call or write your Dietl representative with any questions.
12/13/2019
Update on US and Chinese Trade Negotiations
On December 13, 2019, the U.S. Trade Representative (USTR) announced a “Phase One” trade agreement between the U.S. and China. Under the agreement, China Section 301 List 4B 15% duties scheduled for December 15, 2019 will not go into effect. A separate Federal Register notice is expected on this issue. The U.S. will also reduce China Section 301 duties from 15% to 7.5% for China-origin merchandise on List 4A. There is no scheduled date for the reduction of the China Section 301 List 4A duty rate to 7.5% and the USTR statement makes no reference to retroactivity for this reduction. The existing 25% duty rate for China Section 301 Lists 1, 2, and 3 will remain unchanged at this time.
We will wait for CBP to provide updates to any changes to the 15 percent Section 301 duties applicable to the products of China covered by List 1 and update our clients accordingly.
12/4/2019
Fritz Dietl speaks with ARTnews for their article: The Art Industry Is Grappling With How to Shrink Its Carbon Footprint. But Will Collectors Do Their Part? ; by Kate Brown
“Dietl is organizing about half the floor at Art Basel Miami Beach, so it’s crunch time when I talk to him. Still, he seems eager to take the time to parse out the details of CO₂ emissions in the art industry. “This is not something talked about a few years ago, and in the art world you’d be hard-pressed to find a climate change denier,” he says. “But this comes down to the bottom line: When we offer green solutions, we need to find cost-effective ones, especially for galleries who are on the edge of profitability.”…
Dietl will be at the fair during the preview days meeting with clients, and greener shipping is going to be one of his talking points, encouraging his clients to get on board for his new carbon credits program, where they can offset their individual shipments and give funds directly to environmental projects. But he says it is harder to woo collectors on the subject, particularly because in the majority of cases once they own a work, the piece does not travel that much. Most of the shipping is to and from the fair, and not much beyond it, so reusable crates and CO₂-neutral considerations may not be the first concern that comes to mind.”
10/14/2019
Fritz Dietl speaks with ARTnews for their article: New U.S. Tariffs Could Hit Some Prints, Photographs from Germany, United Kingdom; by Claire Selvin
“Fritz Dietl, the president of the New York–based fine art shipping company Dietl International, told ARTnews that the new tariff will have “at least as much impact” as recent increases in import tariffs on artworks from China, which were instituted as part of President Trump’s trade war with the country.
“I think a lot of people don’t yet grasp the real impact of this new tariff,” Dietl said. “It caught people completely off-guard … and there’s no way around it.”
Dietl said the tariffs will have significant implications for both U.S. and European art enterprises, and mean a “huge financial gamble” for galleries who will have to pay 25 percent of a work’s value upfront.
“A lot of our clients—and we work all the majors dealers in the U.S.—are very worried, and we are sending alerts out to everybody,” Dietl said. “And a lot of our international clients are very worried as well. The Miami art fair season is upon us, and a lot of these dealers don’t know what to do or bring to the fair at this point.”
10/04/2019
25% Duty on contemporary photos, prints and lithographs from GB and DE
CONTEMPORARY PHOTOGRAPHS AND LITHOGRAPHS FROM GERMANY AND THE UNITED KINGDOM ARE INCLUDED IN THE LIST OF PRODUCTS THAT WILL HAVE DUTIES LEVIED AS PART OF THE GOVERNMENTS LARGE CIVIL AVIATION TRADE DISPUTE WITH THE EUROPEAN UNION. THESE DUTIES WILL OFFICIALLY TAKE EFFECT ON OCTOBER 18TH, 2019.
THE DUTY APPLIES TO PHOTOS THAT ARE LESS THAN 20 YEARS OLD AT THE TIME OF IMPORTATION ("PRINTED WITHIN 20 YEARS AT THE TIME OF IMPORTATION") AND ALL LITHOGRAPHS THAT FALL UNDER THE CUSTOMS CHAPTER 49 CLASSIFICATION.
The duty rate will be 25%
4911.91.40 - Pictures, designs and photographs, excluding lithographs on paper or paperboard, printed not over 20 years at time of importation
4911.91.20 - Lithographs on paper or paperboard, not over 0.51 mm in thickness, printed not over 20 years at time of importation
4911.91.30 - Lithographs on paper or paperboard, over 0.51 mm in thickness, printed not over 20 years at time of importation
* BRITISH OR GERMAN ORIGIN IS DETERMINED BY ITS PRODUCTION LOCATION. PHOTOS AND LITHOS OF GERMAN OR UK ORIGIN (MADE IN THE UK OR DE) FALL WITHIN THE ABOVE STATED GUIDELINES AND WILL BE SUBJECT TO THESE DUTIES WHEN IMPORTED INTO THE UNITED STATES.
*LITHOGRAPHS THAT FALL UNDER THE CLASSIFICATION OF CUSTOMS CHAPTER 9702 ARE NOT SUBJECT TO THIS NEW DUTY.
THE NOTICE OF DETERMINATION AND ACTION HAS BEEN PUBLISHED IN THE FEDERAL REGISTER, A COMPLETE LIST OF PRODUCTS CAN BE FOUND HERE:
Please call or write your Dietl representative with any questions.
8/30/2019
U.S. Tariffs increased from 10% to 15% on artwork of Chinese Origin
For the 10% tariffs on approximately $300 billion worth of Chinese imports that the President announced earlier this month, the tariffs will now be 15%, effective on the already scheduled date of September 1st .
* An artwork of Chinese origin is determined by its production location. If fabricated within mainland China, it will be subject to these tariffs regardless of its current location when imported into the United States.
8/16/2019
Fritz Dietl speaks with the Financial Times for their article: London art market braced for no-deal Brexit tax hikes; by James Pickford
“International collectors and galleries had until recently expected a Brexit withdrawal deal to be struck between the UK and Brussels, giving some continuity over rules in a transitional period. But they admit that looks increasingly shaky as the political rhetoric increasingly points towards a no-deal exit.
Fritz Dietl, president of art shipping company Dietl International, said: ‘Before, everyone assumed this was going to be worked out. Now there’s a lot more concern.’ ”
https://www.ft.com/content/6bb4e06a-c03e-11e9-b350-db00d509634e?accessToken=zwAAAWywGgUYkc9rtOBqwD4R6dOzUNsA1QljTg.MEUCIQDMiPiE6TGRtH4RtEjsJV_t_Ysjl7ugBk1TG-GZ3bILewIgEtj6B9Q5Qif6sXeYyENyF_4nubi4jdf1unQ928NrKKk&sharetype=gift?token=c75d0e1a-1469-40ae-a908-5a3f4a26d817
8/13/2019
U.S. Tariffs confirmed on artwork of Chinese Origin
The United States Trade Representative (USTR) today announced The next steps in the process of imposing a tariff of 10 percent on approximately $300 billion of Chinese imports.
Any artwork of Chinese origin will be subject to a 10% tariff when imported into the United States starting on September 1st. We suggest you take immediate steps to import these works into the United States before that date if you wish to avoid the tariff. Please contact your local Dietl representative to assist in organizing these shipments.
* An artwork of Chinese origin is determined by its production location. If fabricated within mainland China, it will be subject to these tariffs regardless of its current location when imported into the United States.
8/07/2019
Update on US and Chinese Trade Negotiations
On August 1, 2019, President Trump announced in a tweet that additional 10% duties will be imposed on September 1, 2019 on $300 billion in China goods. Although not specifically referenced in President Trump’s tweet, the $300 billion amount is consistent with the China Section 301 List 4 previously proposed by the United States Trade Representative (USTR).
On May 17, 2019, USTR announced the proposed China Section 301 List 4. The list includes 3,805 full or partial HTSUS Subheadings, which cover essentially all China products not subject to prior China Section 301 lists. Included in this is Chapter 97; WORKS OF ART, COLLECTORS' PIECES AND ANTIQUEs. it is possible some HTS provisions will be removed or limited based on public comments and the public hearings that were held in mid-June on the proposed China Section 301 List 4.
USTR has not yet provided formal notice through publication in the Federal register of the 10% additional duties on List 4 goods described in the President’s tweet, so the precise implementation of the 10% duty is still not defined. As a result, no final List 4 is available at this time. The U.S. is scheduled to continue trade talks with China in early September, so circumstances could still change.
6/07/2019
Fritz Dietl speaks with Bloomberg News for their article: Ultra-Rich Shop in Secret Showrooms at Super Bowl of Art World; By Katya Kazakina
“Fritz Dietl, whose logistics company shipped enough art to Basel this year to fill three jumbo-jets, recalled the days when dealers visited storage rooms with clients, took an artwork from the crate and showed it leaning against the wall.
“It didn’t cost anything,” he said. “Then the fair got smarter.”…”
https://www.bloomberg.com/news/articles/2019-06-07/ultra-rich-shop-in-secret-showrooms-at-super-bowl-of-art-world
5/29/2019
Client questions answered regarding US and Chinese Trade Negotiations
In response to the news of potential duties on the import of artwork of Chinese origin into the US, we've received requests for clarification from clients in the form of specific scenarios. These will not cover every concern but will address some major issues that may arise if the proposed import duties go into effect.
Some of these scenarios are sure to sound familiar, we've compiled them here with replies for quick reference.
Question 1- Can you confirm that the tariffs in both directions only apply to mainland China? Hong Kong is exempt in both directions, correct?
Answer 1- Shipments into Hong Kong will be unaffected, however, shipments of artworks of Chinese origin into the US – either from HK or from any other 3rd party country – would be subject to duties on entry into the US.
Question 2- Can you confirm that the tariffs only apply to artwork created in mainland China, or the US, and shipping specifically from one of those countries to the other?
Answer 2-Tariffs in the US will only apply to artworks of Chinese origin. Regardless of where they ship from.
Question 3- Shipping an American made artwork from HK to mainland China (As an example, shipping a work that was made in the US and currently in storage in HK.) Will tariffs apply on the import shipment into China?
Answer 3-Yes, because the work is of US origin, it will be subject to a higher rate of duty upon entry into China. Even if it comes through HK or any other country.
Question 4- Shipping a non-American made artwork from the US to mainland China, i.e. a return of a Chinese artwork from the U.S. to mainland China, or a shipment of a foreign made work from the U.S. to mainland China, will tariffs apply?
Answer 4-Whether or not a work of Chinese origin is subject to import duties upon entry into China depends largely on how it was originally exported. If it’s a return of a temporary export it would, in theory, not be liable for import duties. If it’s a new sale, it would be subject to import duties at the standard rate – not the higher rate to be imposed on US goods. Likewise, imports of art manufactured in other countries would be subject to standard rates of duty.
Question 5- Shipping an American made or foreign (non-Chinese) made artwork from mainland China to the US will tariffs apply?
Answer 5-US made goods will still be able to return to the US duty free with a proper declaration (form 3311). Works manufactured in countries other than China would still be subject to the MPF but not to additional duties yet to be imposed by the US.
Question 6- Shipping a mainland China made artwork from the US to anywhere else in the world will tariffs apply?
Answer 6-These shipments will be subject to import duties and taxes in whichever country they are shipped to.
Question 7- Would return shipments to the US of works of Chinese origin be subject to duties even if they return from third party countries?
Answer 7-We are not sure if they will allow any duty-free importation for works returning from "Public Exhibitions". This still needs to be determined.
Question 8- Shipping a mainland China artist’s work from a non-mainland China location to the US. As an example, from London or Zurich to US will tariffs apply?
Answer 8-Because the works were produced in China, they will still be subject to the import duties for Chinese made goods upon entry into the US.
Question 9- If so, could we potentially use another intermediary step to avoid tariffs?
Answer 9-Absolutely NOT!!
Question 10- Will there be permanent vs. temporary imports and exports and how would they work for both countries?
Answer 10-No other changes are foreseen with permanent vs. temporary imports into China.
In the US, when working with galleries and collections, we generally import all shipments permanently (consumption entry) on your behalf, which gives you the most flexibility for your inventory - so going forward you will have to pay the import duties on Chinese made goods.
You will be able to file for duty drawbacks (refunds) for anything you are re-exporting. There are fees involved to file for a duty drawback and the refund process can take as long as 6 months.
Alternatively, you will be able to import Chinese made art work on TIB's (Temporary Import Bond) BUT please keep in mind that ALL works will must be re-exported!
Question 11- How will the tariffs be collected in both countries? How would values be vetted?
Answer 11-As is already the case in China, duties will be assessed as part of the customs import clearance. Likewise, here in the US, duties would be assessed as part of our import clearance process.
You will see an additional line item on your invoices, separate from the MPF, noting the amount of duty on goods of Chinese origin. The exact rate of that duty is not yet published or known. We suspect it will be at least 10 % - but could possibly be as high as 25 %.
For valuation you must consider that all values are generally public knowledge. A lot of information about the value of artwork can quickly be found - even by US Customs inspectors - at the stroke of a fingertip. Thus - it is our recommendation to declare the full purchase value in all customs declarations.
5/14/2019
Updated! - US and Chinese Trade negotiations
In the new round of U.S. and Chinese trade negotiations, additional tariffs have been placed on U.S. goods, including artworks, imported into China at a rate of 25% duty + 13% tax, for a total of 38%. This new rate of duty and taxation will take place starting June 1st, 2019.
Additionally, the U.S. government is in the process of enacting the fourth Tranche in their own process of increasing Duties on Chinese goods. While the previous three Tranches put in place by the U.S. have not included artworks, it is anticipated that the fourth Tranche will include all forms of artwork. An announcement for when this forth Tranche will take effect is forthcoming. We will stay on top of these developments and keep you informed as more information is provided.
From the OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE;
“On August 18, 2017, USTR initiated an investigation into certain acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation (82 FR 40213). During the investigation, the Trade Representative determined that the acts, policies, and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act of 1974, as amended (Trade Act). At the direction of the President, the Trade Representative determined to take actions resulting in the imposition of an additional 25 percent duty on products of China with an annual trade value of approximately $250 billion. The additional duties were imposed in three tranches. Tranche 1 covered 818 tariff subheadings, with an approximate annual trade value of $34 billion. See 83 FR 28710 (June 20, 2018). Tranche 2 covered 279 tariff subheadings, with an approximate annual trade value of $16 billion. See 83 FR 40823 (August 16, 2018). Tranche 3 covered 5733 tariff subheadings, with an approximate annual trade value of $200 billion. See 83 FR 47974 (September 21, 2018); 83 FR 49153 (September 28, 2018); and 84 FR 20459 (May 9, 2019).”
“…at the direction of the President, the Trade Representative proposes to modify the action being taken in this investigation. In particular, in accordance with the direction of the President, the Trade Representative is proposing to modify the action being taken in this investigation by taking further action in the form of an additional ad valorem duty of up to 25 percent on products of China covered in the list of 3,805 full and partial tariff subheadings set out in the Annex to this notice. The proposed product list has an approximate annual trade value of $300 billion. The proposed product list covers essentially all products not currently covered by action in this investigation.”
These include but are not limited to:
HTS Code: 9701.10.00 Paintings, drawings (o/than of 4906) and pastels, executed entirely by hand, whether or not framed
HTS Code: 9701.90.00 Collages and similar decorative plaques, executed entirely by hand, whether or not framed
HTS Code: 9702.00.00 Original engravings, prints and lithographs, whether or not framed
HTS Code: 9703.00.00 Original sculptures and statuary, in any material
HTS Code: 4906.00.00 Hand-drawn original plans and drawings; hand-written texts; photo reproductions on sensitized paper and carbon copies of the foregoing
HTS Code: 4911.91.10 Pictures, designs and photographs, printed over 20 years at time of importation
HTS Code: 4911.91.15 Pictures, designs and photographs printed not over 20 years at time of importation, used in production of articles of heading
HTS Code: 4911.91.40 Pictures, designs and photographs, excluding lithographs on paper or paperboard, printed not over 20 years at time of importation
9/18/18
Updated! - Import duties on art work of Chinese origin
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.
8/23/2018
Potential 25% import duties on art work of Chinese origin
Dear Valued Partners,
The new additional import duty of 25% on artwork made in China has been in the news. Following please find some current facts for your information:
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.
The final list of commodities for Tranche 2 is listed here:
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/ustr-finalizes-second-tranche
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.
USTR site:
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/public-hearings-proposed-section-301
Proposed Modification of the action pursuant to section 301:
https://www.regulations.gov/document?D=USTR-2018-0026-0001
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."
Potential solutions if chapter 97 is included in the 3rd Tranche:
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.
7/31/2018
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