Tracking the e-cigarette trade
The United States Customs and Border Protection Agency (CBP) has taken steps to alleviate statistical challenges that prevented government and industry experts from determining the volume of electronic cigarette imports. The majority of e-cigarette devices sold in the United States and Europe are imported, primarily from China. Yet Customs officials lacked the necessary record keeping tools to separate the inflow of these goods from broad basket categories covering many products such as electronics.
A report from the US Government Accountability Office (GAO) describes how starting in January 2016 the CBP has assigned unique 10-digit statistical reporting numbers to “personal electric or electronic vaporizing devices” and “mixtures for use in personal electric or electronic vaporizing devices”. For example, the Statistical Notes to Chapter 38 Miscellaneous Chemical Products of the Harmonized Tariff Schedule of the United States (2016) specifies that “for the purposes of 3824.90.2840 and 3824.90.9280, mixtures for use in personal electric or electronic vaporizing devices” means a formulated liquid, whether or not containing nicotine, and whether or not packaged for retail sale in cartridges or tanks adaptable to such devices. Personal electric or electronic vaporizing devices electrically heat or atomize liquids or other substances producing a vapor to be inhaled through the mouthpiece. These devices are commonly known as electronic cigarettes, “e-cigarettes”, “e-hookahs”, “e-pipes”, vaporizers or “vaping” systems.”
This removes a major obstacle to tracking the volume of electronic cigarette import volumes and tariff revenue. Prior to 2016 the Harmonized Tariff Schedule of the United States (HTS)—which is used to classify U.S. imports and exports for tariff and other purposes—did not contain statistical reporting numbers specific to e-cigarette devices nor e-liquid . The electronic devices, related components and nicotine containing liquid were imported under HTS statistical reporting numbers for residual or basket categories that cover a range of goods. Consequently, import data for these products were aggregated in diverse baskets with miscellaneous products that were often only tangentially related.
For example, imports of liquid for e-cigarettes, or cartridges containing liquid, were previously classified under Chapter 38 of the HTS: Miscellaneous Chemical Products. For statistical recording purposes at the 10-digit level they were grouped in 3824.90.9290: Other alongside hand sanitizers and compressed gas mixtures. Isolating the volume of imported e-liquid from this heterogeneous bundle was virtually impossible.
Similar difficulties were encountered in tracking imports of e-cigarette devices which were recorded in 8542.70.9650: Other, a broad category under Chapter 85: Electrical Machinery and Equipment that also includes strobe lights and calorie counters. It is not unusual to encounter such statistical hurdles when dealing with new products that did not exist when the reporting numbers were last revised.
The challenges in data collection regarding imported electronic cigarettes and e-liquids were originally highlighted by the GAO in a report submitted to the Congress in 2015. GAO subsequently shared its report with United States Customs and Border Protection and other agencies of the Federal Government.
These measures are expected to facilitate greatly the tracking of import volumes and the associated Customs duty revenue.