What is Duty?
A duty is a tax levied by a customs authority on goods as they cross a customs border, most often on import. The applicable rate is found by classifying the goods under the national tariff, which is built on the six-digit WCO Harmonized System and extended nationally (the US HTSUS, the EU Combined Nomenclature and TARIC). Rates can be ad valorem (a percentage of customs value), specific (an amount per unit, such as per kilogram or per litre) or compound (both). The duty base differs by jurisdiction: the EU values goods on transaction value including transport and insurance up to the point of entry into the customs territory, while the US uses transaction value that excludes international freight. Beyond ordinary customs duties, goods can attract trade remedy duties such as anti-dumping and countervailing duties, plus import VAT or excise collected at the border.
Why it matters for forwarders
The importer of record or declarant is legally liable for the duty, even when a forwarder or customs broker lodges the declaration on its behalf. Duty is driven by three data points the forwarder often touches: classification, origin and value. A wrong HS code, a missed preferential origin claim or freight costs left out of an EU customs value can lead to post-clearance demands, interest and penalties long after the cargo is delivered. Forwarders who advance duties for clients carry credit exposure, so many require deposits or direct debit from the importer's own deferment or ACH account. Check whether a binding tariff information decision or binding ruling exists before quoting landed cost, and confirm who pays duty under the Incoterms rule, since only DDP places it on the seller.