HS codes for import and export

When you trade internationally there’s a plethora of things to deal with. You are not only working on your foreign customers order and checking if they can pay you. You also need to ensure compliance to international trade regulations. Then, you must pay great attention to details and acquire knowledge about custom tariffs, certificates, licenses and various documents.

 

One such details that you will have surely encountered here and there is the HS Code. For example your importers might have asked you to enter your products’ HS Code on the invoice or certificate of origin, right?

 

But, what is the HS Code for?

 

As in any other regulated and highly complex system, international trade needs certainty of rules and standards. International sellers and buyers must understand each other to trade successfully. They need to communicate using mutually accepted terms, even if their languages are different.

 

If you tell your importers your product is “cut flowers”, they need to understand of which kind and variety. That’s when and why HS codes are used.

 

Not only. Another main reason is you must enter the correct one to apply the right import tariff rate. Any mistake will cause delays, or worse, loss of the goods shipped.

 

In addition, the purpose of the HS Code is to improve the efficiency and effectiveness of each country’s customs authorities. This system enables each country to apply tariffs, monitor trade and carry out economic and statistical analysis at various levels and for different purposes.

 

Why is the HS Code important?

 

The Harmonized Commodity Description and Coding System, or HS Code, was developed by the World Customs Organization (WCO) which defines it as a “multipurpose international product nomenclature”.

 

The HS Code system is important because is universally recognised by more than 200 countries. Complying to it allows the collection of trade statistics, rules of origin, monitoring of goods under control among other important data.

 

So, depending on who you talk to you will hear the HS Codes named as Customs Codes, Harmonized System Codes, Harmonized Tariff Schedule (HTS), Tariff Codes or simply Export/Import Codes. In reality, they all refer to HS codes because there’s no other system in place.

 

Why is the HS Code different per country?

 

The HS Code comprises about 5,000 commodity groups. Each group is identified by a six digit code ensuring a uniform classification of goods to facilitate trade and customs purposes.

 

Although WCO sets the standard, each country may decide to add additional digits for more detailed description of goods.

 

HS Code example of fresh rose cut flowers

 

For example, the Indian Tariff Code (ITC) uses 8 digits while the United States’ HTS-US uses 10 digits. If you are in the US, you can use the HTS for determining the import tariff. Yet, you can use it as a replacement of the Schedule B for classifying goods exported from the United States.

 

How to find a HS Code?

 

As a universal standard system that describes and classifies goods traded internationally. It is composed of 98 Chapters and 21 sections. Each section may contain more chapters.

 

Each chapter identifies the first 2 digits of the HS code, while the next 4 digits identify the heading (2 digits) and the subheading (2 digits). Finally, as mentioned above, you may find that each individual country’s system adds additional digits.

 

When Importers and exporters want to import or export their goods, they need to know the exact customs tariff classification for these goods.

 

This is important because you must mention Harmonized codes on documents too, such as Bill of Lading, shipping documents, etc. If you don’t know the correct code of your product, you can use one of the several online tools we report here below by providing a brief description of the product.

 

Findhs.codes – it is a good tool to find and also provides access to the:

 

  • European Union Customs Tariff Correlation Table
  • Statistical nomenclature of the European Union
  • Harmonized Tariff Schedule of the United States (HTS-US)

 

If you want to calculate the duty on a specific product, you can do so using the duty calculator.

 

There are several good online resources, some are from government departments, others are private firms.

 

Country/RegionAuthority Website
Europeeuropa.eu
Australiaborder.gov.au
Indiadata.gov.in
Canadainternational.gc.ca
USAhts.usitc.gov
USA - Schedule Buscensus.prod.3ceonline.com
Chinaenglish.customs.govcn
Malaysiacustoms.gov.my

 

If it’s import and export trade data you are after, some quality sites like Seair provide this service.

 

How HS Codes and Detailed Shipment Description Help Your Export

 

We mentioned that Harmonized System Codes are important to avoid delays or denial of entry in the foreign country. Yet, an appropriate description of the goods you are sending is important along with having the correct indication of code. A detailed description of goods would include the following:

 

  • No. of items
  • Composition
  • Common and Scientific Name (for some products)
  • Unit cost
  • Total cost

 

Checking which HS Codes to use and ensuring about the description of the goods on the commercial invoice, you avoid any possible delays. If your harmonized code and goods description match and are consistent, you prevent issues custom officers may raise. Also important is to declare the right value about the goods on the shipping documents.

 

If sending samples for testing and evaluation by customers, you may not have to pay any duties. But, ensure you know if your product is exempt and what regulations apply to the destination country. Finally, you may have to supply more copies of the commercial invoice and other documents depending on the country you are shipping from and to.

 

Find Your HS Code and Detail Your Documents

 

Remember, if you trade internationally, you must know the import/export regulations of the country you trade with. Make sure you know the exact HS code for your products. If your country of destination has its own tariff system, check it out.

 

Find the additional digits specifying your product in more detail and put the resulting code on all documents such as the commercial invoice. Ensure this provides all details concerning your products, their quantities and costs. Speak to your forwarder or courier if there are any restrictions to import in the country of destination. Trade successfully, trade smartly.

 

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This article contains general legal information and material for informational purposes only which are not intended and should not be taken as legal advice. Recoupera is not a collection agency and it is not a law firm or a substitute for an attorney or law firm. All informational material provided may not reflect changes in the law. For legal advice, contact a lawyer.

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