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Author Topic: US Tariff Ruling N297495 = 2.6% mandatory tariff on bitcoin mining hardware  (Read 942 times)
AdValorem
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September 13, 2018, 06:23:10 PM
 #1

https://rulings.cbp.gov/ruling/N297495

The US Customs ruling for Bitcoin miners seems half-baked. They treat mining as though it is not a type of data-processing. 

This HS code classification means that US based miners will have to pay a 2.6% tariff on any miners coming into the US from now on. Period.

Anyone know of anyone who is working to fight this? I'd love to connect.
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NotFuzzyWarm
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September 13, 2018, 07:34:17 PM
Merited by suchmoon (4)
 #2

To quote directly from the Ruling,
Quote
However, as the ENs explain in 84.71 (I), machines which operate only on fixed programs which cannot be modified by the user are excluded from heading 8471, HTSUS, even though the user may be able to choose between a number of fixed programs. Consequently, the merchandise does not meet the requirements of Note 5 (A)(ii), which requires that ADP machines be freely programmable. A freely programmable ADP machine is one for which applications can be written, does not impose artificial limitations upon such applications, and will accept new applications that allow the user to manipulate the data as deemed necessary by the user.

Based on those guidelines and the fact that an ASIC cannot be reprogrammed - and the plethora of ASIC's in them are the heart of the miners in question - I completely agree with the CBP ruling.

For bitcoin to succeed the community must police itself - Joshua Zipkin aka Joshua Alexander leaked AMT A1 miner skype chats
How a miner mfgr SHOULD operate: HaggsFIN trip to Canaan My info useful? Donations welcome! 1Fuzzyk398kDWVjuC5qPX5v6CjSkvbgAbd
-Support Sidehacks miner development. Donations to:   1BURGERAXHH6Yi6LRybRJK7ybEm5m5HwTr
fanatic26_
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September 13, 2018, 08:18:46 PM
 #3

Anyone know of anyone who is working to fight this? I'd love to connect.

I wrote a paper for my company on this when they asked me to attempt to clarify the ruling. However, as was pointed out, by the letter of what they say there is no room to argue. ASICs are not freely programmable.
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September 13, 2018, 09:19:24 PM
 #4

2.6% is more than welcome since August.

Blokforge
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September 14, 2018, 06:05:44 PM
 #5

I wrote a paper for my company on this when they asked me to attempt to clarify the ruling. However, as was pointed out, by the letter of what they say there is no room to argue. ASICs are not freely programmable.

Our attorneys are full force on this.  Not fun times.
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September 14, 2018, 06:36:00 PM
 #6

Our attorneys are full force on this.  Not fun times.

Seems our top broker is looking pretty deep into this too. I'll DM you if there's any news I can share.

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September 14, 2018, 06:37:27 PM
 #7

Our attorneys are full force on this.  Not fun times.
I don't see how your attorneys could argue against it.. GPU rigs, sure they should fall under the exemptions as they are freely programmable.

ASIC-based miners however are much like a cash register or hand-held/desktop calculator. Yes modern ones offer high flexibility in addressing their core functions but in the end they are fixed-purpose data devices and both are charged import duty.

For bitcoin to succeed the community must police itself - Joshua Zipkin aka Joshua Alexander leaked AMT A1 miner skype chats
How a miner mfgr SHOULD operate: HaggsFIN trip to Canaan My info useful? Donations welcome! 1Fuzzyk398kDWVjuC5qPX5v6CjSkvbgAbd
-Support Sidehacks miner development. Donations to:   1BURGERAXHH6Yi6LRybRJK7ybEm5m5HwTr
philipma1957
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September 14, 2018, 07:31:26 PM
 #8

Ah my main man donald breathing life back into gpu mining.

Also note that this is from Chinese gear not Japanese gear.

https://rulings.cbp.gov/ruling/N297495

Quote
N297495: The tariff classification of cryptocurrency mining machines from China
Ruling Date: Jun 8, 2018

Thus GMO gets a boost

As does Triple-1

both Japanese based.

I mine alt coins with https://simplemining.net...
I see BTC as the super highway and alt coins as taxis and trucks needed to move transactions.
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September 14, 2018, 07:39:39 PM
 #9

more references.

https://ustr.gov/sites/default/files/files/Press/Releases/301FRN.pdf

https://www.usitc.gov/publications/docs/tata/hts/bychapter/1501c85.pdf

Blokforge
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September 14, 2018, 07:43:47 PM
 #10

I don't see how your attorneys could argue against it.. GPU rigs, sure they should fall under the exemptions as they are freely programmable.

ASIC-based miners however are much like a cash register or hand-held/desktop calculator. Yes modern ones offer high flexibility in addressing their core functions but in the end they are fixed-purpose data devices and both are charged import duty.

Its not arguing the classification, that is the correct one.  It is the filing and pressure of the exclusion to the 25%.
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September 14, 2018, 08:07:20 PM
 #11

Its not arguing the classification, that is the correct one.  It is the filing and pressure of the exclusion to the 25%.

The 25% one is really tough.  But europe has been doing Vat at 17 to 21% for years.

Bottom line it will be interesting to see how it plays out.

I think China blinks  then does some concessions to US and tariff ends in under 6 months.

For your business it is difficult.   It leaves you with only GMO and and Triple-1 to source  asic miners.

I mine alt coins with https://simplemining.net...
I see BTC as the super highway and alt coins as taxis and trucks needed to move transactions.
Maxumark
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September 14, 2018, 08:18:51 PM
Merited by suchmoon (4)
 #12

https://rulings.cbp.gov/ruling/N297495

The US Customs ruling for Bitcoin miners seems half-baked. They treat mining as though it is not a type of data-processing.  

This HS code classification means that US based miners will have to pay a 2.6% tariff on any miners coming into the US from now on. Period.

Anyone know of anyone who is working to fight this? I'd love to connect.

Not exactly from now on. I just got served a notice of action today for miners I imported in November of 2017 that the now clarified classification will retroactively be applied to all of my imports and this could result in additional fees due.

Since the miners were more costly then the 2.6% is a going to be a lot more per miner.

Angry

Mining LTC and other alts since 2014 when I realized I missed the BTC train.
fanatic26_
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September 14, 2018, 08:52:21 PM
 #13

Not exactly from now on. I just got served a notice of action today for miners I imported in November of 2017 that the now clarified classification will retroactively be applied to all of my imports and this could result in additional fees due.

This is exactly what happened to us. We received a mid 6 figure bill for things we imported before any of this was even a law.
NotFuzzyWarm
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September 14, 2018, 08:54:41 PM
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Not exactly from now on. I just got served a notice of action today for miners I imported in November of 2017 that the now clarified classification will retroactively be applied to all of my imports and this could result in additional fees due.

Since the miners were more costly then the 2.6% is a going to be a lot more per miner.

Angry

Now THAT is something I would fight in court!

I do not see any way that CBP can be justified in retroactively charging additional duty from that far back. There is no way an importer could be aware of them not being charged the correct fee because this ruling only came down last June. If CBP has a problem with the new duty fees vs the old ones - that is their problem.

While I am not a lawyer to me it would be the same as retroactively changing (increasing) the punishment for crimes -- that is definitely not allowed.

Do you think for 1 minute that they will try the same thing and go after companies because Tariffs got raised/enacted? Oh yeah, the automakers, steel users, etc would just LOVE that...

For bitcoin to succeed the community must police itself - Joshua Zipkin aka Joshua Alexander leaked AMT A1 miner skype chats
How a miner mfgr SHOULD operate: HaggsFIN trip to Canaan My info useful? Donations welcome! 1Fuzzyk398kDWVjuC5qPX5v6CjSkvbgAbd
-Support Sidehacks miner development. Donations to:   1BURGERAXHH6Yi6LRybRJK7ybEm5m5HwTr
fanatic26_
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September 14, 2018, 09:06:46 PM
 #15

Its all so screwed up.

I recently purchased 4 z9 minis from bitmain and paid $37 in customs fees.

My coworker purchased 2 z9 minis and UPS charged him a $506 customs fee.

Both out of the same batch and delivered within days of each other.
Maxumark
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September 14, 2018, 09:18:05 PM
 #16

Well it appears to me that the new clarification of the classification of the miners is what is causing the additional import fees.

Even before the new 4/26/2018 to 12/31/2050 for 85437099 clasification, the old one from 7/1/2016 to 4/25/2018 under this 85437099 classification the import duties were the 2.6%

Its that now they are starting to understand what this equipment is and reclassifying it retroactively on new understandings.

-M

Mining LTC and other alts since 2014 when I realized I missed the BTC train.
Maxumark
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September 14, 2018, 09:25:04 PM
 #17

Its all so screwed up.

I recently purchased 4 z9 minis from bitmain and paid $37 in customs fees.

My coworker purchased 2 z9 minis and UPS charged him a $506 customs fee.

Both out of the same batch and delivered within days of each other.

Yours without PSUs?

His with PSUs?

Without PSUs = a Component = 2.6%

WIth PSUs = a complete unit and a different classification and a 20% fee?

Mining LTC and other alts since 2014 when I realized I missed the BTC train.
Blokforge
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September 14, 2018, 09:58:38 PM
 #18

Now THAT is something I would fight in court!

I do not see any way that CBP can be justified in retroactively charging additional duty from that far back. There is no way an importer could be aware of them not being charged the correct fee because this ruling only came down last June. If CBP has a problem with the new duty fees vs the old ones - that is their problem.

While I am not a lawyer to me it would be the same as retroactively changing (increasing) the punishment for crimes -- that is definitely not allowed.

Do you think for 1 minute that they will try the same thing and go after companies because Tariffs got raised/enacted? Oh yeah, the automakers, steel users, etc would just LOVE that...

We have the same retroactive corrections, six figures as well, cant fight in court.  At the end of the day, if you import, its your job to know what hts code to use, and correct the import docs if incorrect.  The ruling is only technically a clarification of a status that already existed.

This is a huge cash grab now for the gov, they will eventually hit every import from bitmain ever.
Blokforge
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September 14, 2018, 10:03:31 PM
 #19

Lesson learned i think is dont write a letter requesting a tariff classification ruling.  I think people have no concept how much that one letter cost the industry.
fanatic26_
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September 14, 2018, 10:23:54 PM
 #20

Yours without PSUs?

His with PSUs?

Without PSUs = a Component = 2.6%

WIth PSUs = a complete unit and a different classification and a 20% fee?

No PSUs for either of us. Nothing at all different other than carrier.
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