How to import luxury watches into the U.S.: Customs Duties

The Luxury Well has been importing watches into the U.S. from all around the globe for over 15 years.  In times of global excess inventory, even less seasoned collectors are tempted to make bargain purchases from sellers in other countries.  There has been extensive coverage of the risks of cross border transactions.  However, there is not much information available about the process of importing a luxury watch into the United States.  The Luxury Well offers importing services for clients that seek the ease and security of professional importer on record services.  Here is an overview of what to consider when doing it yourself. 

The amount of import duties a buyer has to pay to U.S. customs depends on the a) value of the watch, b) the specifics of the watch and c) the way the sender is issuing the shipping paperwork.  A large number of imports might not incur any duties if the value is considerably low.  There are personal exemption amounts depending on the specific circumstances of the shipment and country that the shipment is coming from.  These exemptions can range from $100-1,600.  On used personal effects, US customs also has the discretion of waiving duties altogether.

Let’s assume, however, that a client is importing a brand new Grand Seiko that was purchased online from a retailer in Japan.  The duty that is owed on this shipment will be determined by U.S. customs according to chapter 91 of the U.S. Harmonized Tariff Schedule.  That is 36 pages of fine print classifying the various duty rates on just watches and clocks.  The full HTS is over 4,000 pages long.  Chapter 91 differentiates between quartz watches, manual and automatic winding watches, stop watches (chronographs) and others.  But across all the different types, the value of the watch is always broken down into three main parts, the case, the movement and the strap/bracelet.  This breakdown is crucial because with very few exceptions, the movement is usually taxed at a very low fixed rate of $0.80 to $4.50.  The case and strap, however, are typically taxed with a percentage that ranges from 3-8.5%.  That is why it is so important that the sender properly breaks down the value of the watch.

This breakdown is done with a “watch worksheet”.  Shipments that arrive without a watch worksheet will be held in customs until this document is provided.  Unfortunately, even when attached to the initial shipment, anything but the first page of customs documents do often times not get scanned correctly by the carriers and thus U.S. customs is still asking for the watch worksheet causing delay to the import process.

To give an example, let’s assume that a client has purchased a $5,000 Grand Seiko with automatic movement with more than 17 jewels and stainless steel case and bracelet.  In this case, the watch would be subject to customs duties according to HTS 9102.21.90.10 with $1.53 flat (movement), 4.2% duties on the case and 2% duties on the bracelet.  Let’s further assume the sender knows what they are doing, in which case they will have broken down the value for example in $4,200 for the movement, $600 for the case and $200 for the bracelet.  That means that the client will owe $1.53 + $25.20 + $4 = $30.73 in duties.  We did unfortunately see cases where the sender did not know how to properly asses values for the breakdown and on a $25,000 watch with gold case divided the values at 20% for the movement, 70% for the case and 10% for the strap.  The shipment was assessed according to HTS 9102.11.95.10 with 8.5% duties on the case and we found ourselves disputing a $2,000 customs bill.

Shipping couriers typically act as the importer on Record for the recipients and charge an additional fee for their clearance (brokerage) services.  That can range from a flat $29 charge to a percentage on the shipment value.

One area that can get particularly dicey is the import of watches with Alligator straps.  Alligator, Shark skin, sting ray or other skins from endangered species and under certain circumstances watches with dials made of mother of pearl are all subject to an additional authority within USCBP, Fish and Wildlife.  And while U.S. customs might be lenient on clearing a shipment and assessing duties, the fine agents at F&W are taking their job particularly serious.

In order to import a watch with an Alligator strap, you not only need a general import permit issued for one year each by Fish & Wildlife which has to be in place (application can take 1-3 months) and in good standing at the time of import, you also need a specific CITES certificate that goes with the strap on the watch.  This certificate has to match a mirroring certificate on the sender’s side.  When first shipped by the manufacturer, Alligator straps are fitted with a sealed yellow tag that shows an individual CITES number.  The certificates of the shipment have to reflect that number. 

Without a proper CITES certificate, F&W has the authority to seize the entire shipment.  The Luxury Well occasionally deals with cases of incorrectly issued export CITES and in severe circumstances we have to physically send a specialist to the port of entry and convince the F&W agents to only cut and destroy the strap and release the watch head and buckle. F&W agents don’t bother cutting am $800 Alligator strap with a pair of scissors.  As cruel as that might be a sight, it is still better than having the entire shipment seized and destroyed.

In short, on a $200 watch with a rubber strap, clients don’t have to worry about customs duties.  On a $8,000 Grand Seiko with Alligator strap, we would definitely recommend getting professional help for the import process.  Please never hesitate to contact us for your importing needs or if you have any further questions: info@luxurywell.com