The sourcing, customs, and quality terms that change cost, responsibility, and risk.
Plain-English definitions for product buyers. These summaries are decision support, not customs, legal, brokerage, laboratory, certification, or inspection-agency advice.
100% inspection
Inspection of every unit in the defined lot for the specified checkpoints. It can reduce sampling risk for those checks, but it does not guarantee that every possible defect or hidden failure will be found.
Acceptance quality limit (AQL)
For a continuing series of lots, the quality level used as the limit of a satisfactory process average for an acceptance-sampling plan. AQL is not a promise that a single shipment has that exact defect rate, and it should not be treated as a universal default.
Acceptance sampling
Inspecting a defined sample from an inspection lot and applying a documented acceptance or rejection rule to decide the lot's disposition. The sample size and decision rule must be selected before results are interpreted.
Acceptance / rejection number
The maximum result allowed for acceptance, and the result at which the sampling plan calls for rejection. These numbers depend on the selected sampling standard, lot size, inspection level, AQL, and defect class.
Approved sample / golden sample
The buyer-approved physical or documented reference for appearance, construction, function, packaging, or other agreed attributes. The revision and approval date should be controlled so inspectors do not compare production against an obsolete sample.
Bill of lading
A carrier-issued transport document describing the shipment and its movement. Review names, quantities, routing, and release terms.
Binding ruling
A written decision from U.S. Customs and Border Protection on how the specifically described merchandise will be treated, such as its tariff classification or origin. A request requires complete and accurate product facts; a ruling applies to the merchandise and facts described in it.
Chapter / heading / subheading
The tariff schedule narrows products through a hierarchy. The first two digits identify the chapter, the first four identify the heading, and the first six identify the internationally harmonized subheading; U.S. digits beyond six provide additional tariff and statistical detail.
Chapter 99
A part of the U.S. tariff schedule used for temporary, additional, or special tariff provisions. A product can require both its ordinary classification and an applicable Chapter 99 number, so the General rate shown for the ordinary HTSUS line may not be the complete duty treatment.
Container loading check
An inspection stage that verifies quantities, cartons, markings, container condition, loading method, and shipment records while goods are loaded. It is different from testing product quality before loading.
Corrective action
A documented response to a failure that identifies what must be contained, corrected, reworked, or prevented from recurring, along with an owner, due date, and evidence of completion.
Critical / major / minor defect
Buyer-defined defect classes based on seriousness. Critical defects may involve safety, identity, unusable product, or another shipment blocker; major defects can cause likely functional or marketability failure; minor defects have more limited effect. Definitions must be tailored to the product and agreed before inspection.
Critical-to-quality (CTQ) requirement
A measurable or observable requirement that is especially important to safety, function, fit, customer acceptance, packaging, or another buyer-defined outcome. A CTQ should have a clear check method and pass criterion.
Customs value
The value used as the basis for duty calculations. The correct method depends on the transaction and applicable customs rules.
De minimis
A legal threshold historically used for duty-free treatment of certain low-value shipments under 19 U.S.C. 1321. Duty-free de minimis treatment is currently suspended for covered shipments; low value does not eliminate the need for accurate product information, classification, and the appropriate entry process.
DDP — Delivered Duty Paid
The seller takes responsibility for delivery to the named destination and normally includes import clearance and duties in the stated scope. Confirm who is importer of record and what is excluded.
EXW — Ex Works
The seller makes goods available at its premises. The buyer generally controls pickup, export handling, freight, import clearance, and delivery.
FOB — Free on Board
The seller delivers goods on board at the named port of shipment. The buyer generally controls main freight and downstream costs.
Freight cost basis
Whether a freight number is a total shipment charge, a per-unit amount, included in price, or unclear. Mixing these bases can invalidate a comparison.
General Column 1 rate
The general duty expression shown in Column 1 of the HTSUS for imports from countries receiving normal trade relations treatment. It may be Free, a percentage, a specific amount, or a compound rate, and it does not by itself include every possible Chapter 99, trade-remedy, origin, or special-program provision.
General Rules of Interpretation (GRIs)
The ordered legal rules used to classify goods in the Harmonized System. Classification begins with the wording of the headings and relevant section or chapter notes, then applies the remaining rules when the goods cannot be classified by that first step alone.
Harmonized System (HS) code
The internationally harmonized six-digit classification for traded goods. The first two digits identify the chapter, the first four the heading, and all six the international subheading; individual countries extend those six digits for their own tariff and statistical requirements.
Harmonized Tariff Schedule of the United States (HTSUS) code
The U.S. extension of the six-digit Harmonized System classification. U.S. import declarations generally use the applicable 10-digit statistical reporting number. Treat a supplier-provided code as evidence to verify against the current official schedule or with a licensed customs broker.
Importer of record
The party responsible for the import entry and for exercising reasonable care over the declared classification, value, origin, admissibility, and other entry information. Using a broker does not automatically transfer those responsibilities away from the importer of record.
Informal / formal entry
Different U.S. customs entry processes used according to shipment value, product, transport mode, agency requirements, and other rules. Suspension of duty-free de minimis treatment does not mean every parcel automatically uses the same formal-entry procedure; the appropriate entry type must be determined for the shipment.
Incoterms
Standard trade terms that divide transport responsibility, cost, and risk between buyer and seller. They do not replace a complete contract or define product quality.
Inspection lot
The defined quantity of units presented together for an inspection decision. It should identify the product, SKU or variant, production batch, quantity, and readiness state so the sample actually represents the intended shipment.
Landed cost
The cost of getting inventory to the point where it can be sold or used, including applicable product, packaging, order, freight, brokerage, duty, tariff, inspection, and delivery costs.
MOQ — Minimum order quantity
The smallest order a supplier will accept. MOQ determines cash exposure, inventory depth, and often the available unit-price tier.
Named place or port
The location attached to an Incoterm, such as FOB Ningbo or DDP Los Angeles. An Incoterm without its named place can remain commercially ambiguous.
Pre-shipment inspection (PSI)
A quality-control inspection performed after the defined production lot is sufficiently complete and before shipment. It can verify product, workmanship, quantity, packaging, markings, and buyer-defined tests, but it does not replace required laboratory testing or certification.
During-production inspection
Inspection while manufacturing is still underway. It can identify process or quality drift earlier than a pre-shipment inspection, when rework or corrective action may be less disruptive.
Reinspection
A new inspection performed after rework, replacement, corrective action, or an inconclusive first inspection. The scope should state whether it repeats the complete plan or targets defined failures while still protecting against new issues.
Sample size
The number of units selected from the inspection lot for defined checks. A larger sample can reduce some sampling uncertainty, but the correct size depends on the method, lot, risk, and decision rule—not a generic percentage alone.
Section 301 duties
Additional U.S. duties imposed under Section 301 trade actions on covered products from specified origins, including many China-origin goods. Applicability is determined separately from the ordinary General Column 1 rate and often requires an associated Chapter 99 provision; verify the current treatment before ordering or entering goods.
Statistical suffix
Digits nine and ten of a U.S. 10-digit HTSUS reporting number. They distinguish statistical categories beneath the eight-digit tariff subheading and can depend on facts such as capacity, value, dimensions, construction, or composition.
Tooling / mold cost
A one-time or recurring production charge that should be allocated across the expected usable quantity and tied to ownership, maintenance, and replacement terms.
Prepare for inspection before final payment.
Learn how requirements, sampling, defect classes, evidence, corrective action, and buyer disposition fit together.