What CBP rulings say about software that assigns HTS codes

In HQ H350722 (January 16, 2026), U.S. Customs and Border Protection (CBP) told an unlicensed foreign company that its AI classification tool would be conducting customs business if it gave HTSUS (US Harmonized Tariff Schedule) subheadings beyond the six-digit level for merchandise that will or may be entered. A tool that stops at six digits is not doing customs business, and general classification information “disconnected from an actual or intended importation,” under a disclaimer that is “meaningfully implemented,” can fall on the permissible side. The ruling does not ban AI classification, does not address importers classifying their own goods, and says nothing about reasonable care.

Vendors, brokers and importers often quote this ruling for more than it says, so this post works from the ruling text itself. The ruling and the statutes cited here were checked against CBP’s CROSS database and the U.S. Code on October 16, 2026.

What question was CBP asked?

CBP was asked whether a platform run by an unlicensed foreign company was conducting customs business without a license. The request was internal advice dated July 23, 2025, from one of CBP’s Centers of Excellence and Expertise (the Automotive and Aerospace Center, based in Detroit), and the Commercial and Trade Facilitation Division at headquarters answered it. The company charged customers a fee for the platform and offered four services: matching importers with third-party customs brokers, an OCR (optical character recognition) tool that pulled entry data from shipping documents, an AI classification tool, and preparing CBP Form 5106 for new importers.

The AI tool’s facts are narrow. A user entered the article’s name, its material and its end use; the tool returned “tiered” suggestions of applicable subheadings. A disclaimer called the system an AI-based beta whose results were “merely an estimation.” The tool was open to importers whether or not they had engaged a broker through the platform.

What counts as customs business?

Customs business is defined in 19 USC 1641(a)(2), repeated in 19 CFR 111.1, as activities involving transactions with CBP concerning the entry and admissibility of merchandise, “its classification and valuation,” the payment of duties and related matters. It excludes “the mere electronic transmission of data received for transmission to Customs.”

Section 1641(b)(1) requires a broker’s license to conduct customs business, with one carve-out: business done “(other than solely on behalf of that person).” That parenthetical is why an importer classifying its own goods needs no license. Intentionally transacting customs business without one carries a penalty of up to $10,000 per transaction (19 USC 1641(b)(6)).

Which earlier rulings did H350722 build on?

H350722 applies a line of headquarters rulings going back to 1999. The table lists those it cites on classification and entry data, each point as H350722 describes it.

Two of these mark the edges for the AI tool. HQ H272798 accepted a database labeled “for general, educational and planning purposes only,” so long as the disclaimer was meaningfully implemented and the company did not direct clients or brokers on how to prepare an entry. HQ H290535 found customs business where a company classified goods its clients had ordered to the eight- and ten-digit level, even though each code was subject to verification by the customer’s compliance team.

What did H350722 hold for each service?

H350722 cleared one service, found customs business in two, and set conditions for the third (the AI tool, covered below). Broker matching was not customs business so long as the company only passed electronic data along as an intermediary, though CBP noted that a broker must execute the customs power of attorney directly with the importer of record (19 CFR 111.36(c)(3)) and that the platform’s chat feature raised client-confidentiality questions under 19 CFR 111.24. The OCR tool was customs business because it picked out what data would appear on an entry, which is preparing part of an entry whether a person or software does the picking. Completing and submitting Form 5106 for someone else was customs business that only a licensed broker may do.

CBP added two Part 111 warnings. A fee from the importer that is tied to the entry a broker files may breach 19 CFR 111.36(b). And 19 CFR 111.3(a) requires customs business to take place inside the U.S. customs territory, which CBP noted this company, operating from abroad, was outside.

Where exactly did CBP draw the line for the AI tool?

CBP drew the AI line at six digits plus a connection to entry. If the tool derives potential subheadings only to the six-digit level, customs business is not being conducted. Past six digits, a broker’s license is “generally required” when the code will or may later end up on an entry, because filing an entry with CBP requires classifying merchandise to the ten-digit level.

Within that rule CBP described two outcomes. Where the tool gives general classification information “disconnected from an actual or intended importation,” it is akin to the HQ H272798 database, provided the disclaimer is meaningfully implemented and the tool runs apart from the platform’s broker-entry portal. Where the tool gives more than six digits to customers who have engaged a broker through the platform, the company is telling customers and brokers how to prepare entry documents, as in HQ H290535. Either way, suggestions past six digits for merchandise that will be entered are treated as customs business.

Then comes the sentence brokers should read slowly: “A tool does not constitute a ‘person'” under 19 CFR 111.1. If tools are used to conduct customs business, the actual classification decision, or any other information needed to make entry, has to be made by a licensed customs broker. In practice, a licensed broker (or another licensed person) has to help specify what the tool’s decision matrix generates (value or classification, for example) and what ends up on the entry filed with CBP.

What did H350722 not decide?

H350722 decided nothing about an importer classifying its own merchandise; its analysis concerns an unlicensed company acting for others. It does not discuss reasonable care, 19 USC 1484 or 19 USC 1592, so it says nothing about who pays when a suggested code is wrong. It neither approves nor prohibits AI tools, and it sets no test for a “meaningfully implemented” disclaimer beyond the facts of HQ H272798.

H350722 is also bounded the way every ruling is. Under 19 CFR 177.9, a ruling applies to the transaction it describes, and no other person should assume its principles will be applied to a different one. We found no later ruling modifying or revoking H350722 as of mid-October 2026; search CROSS for rulings citing it before you rely on any summary.

What changes for tool vendors, brokers and importers?

For tool vendors, H350722 puts four facts at the center: how many digits the output has, whether it is tied to goods that will be entered, whether the tool sits inside the flow that hands data to a broker, and whether a disclaimer matches how the output is used. Vendors and their customers should have customs counsel compare their own setup with the ruling’s facts rather than rely on a summary, including this one.

For brokers, the change is the “tool is not a person” sentence. A brokerage may use OCR or AI to draft entry data, but the licensed broker has to own the output. That is a process design job, and the controls are the ones in governance rules for automated HTS classification: who reviews, what triggers review and what gets recorded.

For importers classifying their own goods, little changes. The license requirement does not reach an importer’s own entries, and the reasonable-care duty under 19 USC 1484 applies to every code you file whether a person, a spreadsheet or software proposed it. That liability question is covered in who is responsible when an AI-assisted HTS code is wrong.

Export classification works differently. Under 15 CFR 732.3(b), an exporter should classify its items against the Commerce Control List and “may do so on your own without BIS assistance,” with a request to the Bureau of Industry and Security (BIS) as an option. The Export Administration Regulations (EAR) have nothing like the broker license.

A checklist for importers using a classification tool

These questions follow the facts CBP weighed and the importer’s own duty of care.

1. Whose goods does the tool classify: your own imports, or goods that will go on someone else’s entry?
2. How many digits does the output carry, and where does it go next: a planning sheet, your item master, or a broker’s entry data?
3. Who reviews the code before it reaches an entry: your licensed broker, your own team, or nobody?
4. Can you see why each code was chosen: heading text, section or chapter notes, the GRI applied and any ruling relied on?
5. Does the same input give the same answer next month, so your records match what you filed?
6. Can you export, per SKU, who signed off, when and on what product facts, if CBP sends a Form CF-28 (Request for Information)?

The last three questions are the ones TariffWolf, a classification research and decision-support platform, is designed around: its deterministic engine gives the same answer to the same question, each 6-digit HS suggestion cites the legal notes, GRIs and CBP or EU rulings behind it, and reviewer, timestamps, sources and reasoning can be exported per SKU. It is not a customs broker, entries are not filed through it, and it does not connect to a filing system; what goes on the entry, including the last four digits of the HTSUS number, is decided by the importer of record or its licensed broker.

Related reading

• EAR99 explained: when an unlisted item still needs a license
• Rely on an existing CBP ruling or request your own?
• Types of HTS classification software and how to choose one
• What CBP expects you to document to show reasonable care on HTS codes

Frequently asked questions

What is CBP ruling HQ H350722?

HQ H350722 is a CBP headquarters ruling dated January 16, 2026, issued as internal advice to a CBP Center of Excellence and Expertise. It examined an unlicensed foreign company’s fee-based platform, found customs business in its OCR tool and its Form 5106 service, and said its AI tool would be doing customs business if it gave suggestions past six digits for merchandise that will or may be entered. Passing data between importers and brokers as an intermediary was not customs business.

Does H350722 make AI classification tools illegal?

No. H350722 said a tool deriving subheadings only to six digits is not doing customs business, and that general classification information disconnected from any actual or intended importation, with a meaningfully implemented disclaimer and kept apart from the broker-entry portal, resembled a database CBP accepted in 2017. The problem was an unlicensed company giving more than six digits for merchandise headed for entry.

Is suggesting a six-digit HS code customs business?

CBP said in H350722 that a tool deriving potential subheadings only to six digits is not conducting customs business, consistent with its Importer Security Filing rulings HQ H045695 and HQ H260075. An entry needs a ten-digit HTSUS number, so six digits alone cannot be filed.

Does H350722 stop importers from using AI on their own products?

H350722 does not address importers classifying their own goods, and 19 USC 1641(b)(1) excludes an importer’s own customs business from the license requirement. The importer still owes reasonable care under 19 USC 1484 for every classification it files, whatever tool produced it.

H350722 tells vendors and brokers which facts CBP looks at, and it leaves the importer’s duty where 19 USC 1484 put it. If your team uses software to propose HTS codes, write down where each code goes after the tool produces it and who signs off before it reaches an entry. If that path runs through someone else’s entry process, take it to a licensed customs broker or trade attorney.

TariffWolf works on the research side of that path: each suggestion is a 6-digit HS code with the notes, GRIs and rulings behind it and an exportable record of who reviewed it, and your team or your broker picks the full HTSUS number and documents the filing decision. The platform overview sets out what it does and does not do, and you can book a call to test it on a few of your own products.

Sources

• CBP ruling HQ H350722 (January 16, 2026), CROSS
• 19 USC 1641, customs brokers
• 19 USC 1484, entry of merchandise
• 19 CFR 177.9, effect of ruling letters
• 15 CFR 732.3, classification under the EAR