What Is an HS Code?

What Is an HS Code?

An HS code stands for Harmonized System or Harmonized Tariff Schedule. Developed by the World Customs Organization (WCO), the codes are used to classify and define internationally traded goods. In most cases, in order to import or export a product internationally, the traded good must be assigned an HTS code that corresponds with the Harmonized Tariff Schedule of the country of import.

These codes are important because they not only determine the tariff/duty rate of the traded product, but they also keep a record of international trade statistics that are used in nearly 200 countries. For example, the United States Census uses these codes to determine the value, quantities, weights, countries traded with, and more, of every product that the United States imports and exports.

When importing, a normal description of the goods needs to be stated, other than the standard text and in addition to the HS code. This is because Customs wants to be able to physically check the goods on the basis of this description. The HS code given by the supplier often suffices, but there is often uncertainty in the event of e.g. new technologies. Is that new telephone classed as a camera or otherwise? In order to be absolutely certain that the correct HS code is used for import purposes, it is best to ask for Binding Tariff Information (BTI). This applies throughout the EU if it concerns an identical product.

The HS code has 99 Chapters covering 21 Sections. To understand what the code means, we can take 1704.90.10.00 as an example:

This code is used by various international organizations, governments for the purposes of taxes, trade policies, monitoring, the setting of freight and transport tariffs, gathering of transport and trade statistics and economic research and analysis among other uses. It does not matter what mode of transportation you are using.

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