The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and poli ...

nomenclature Nomenclature (, ) is a system of names or terms, or the rules for forming these terms in a particular field of arts or sciences. The principles of naming vary from the relatively informal naming conventions, conventions of everyday speech to the i ...

is an internationally standardized system of names and numbers to classify traded products. It came into effect in 1988 and has since been developed and maintained by the

World Customs Organization The World Customs Organization (WCO) is an intergovernmental organization headquartered in Brussels, Belgium. The WCO works on customs-related matters including the development of international conventions, instruments, and tools on topics su ...

(WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization based in

Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...

Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...

, with over 200 member countries.

Structure

The HS is organized logically by economic activity or component material. For example, animals and animal products are found in one section of the HS, while machinery and mechanical appliances are found in another. The HS is organized into 21 sections, which are subdivided into 99 chapters. The 99 HS chapters are further subdivided into 1,244 headings and 5224 subheadings. Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in more detail. Generally, HS sections and chapters are arranged in order of a product's degree of manufacture or in terms of its technological complexity. Natural commodities, such as live animals and vegetables, for example, are described in the early sections of the HS, whereas more evolved goods such as machinery and precision instruments are described in later sections. Chapters within the individual sections are also usually organized in order of complexity or degree of manufacture. For example, within Section X (''Pulp of wood or of other fibrous cellulosic material; Recovered (waste and scrap) paper or paperboard; Paper and paperboard and articles thereof''), Chapter 47 provides for ''pulp of wood or of other fibrous cellulosic materials'', whereas Chapter 49 covers ''printed books, newspapers, and other printed matter''. Finally, the headings within individual Chapters follow a similar order. For example, the first heading in Chapter 50 (''Silk'') provides for ''silk worm cocoons'' while articles made of silk are covered by the chapter's later headings. The HS code consists of 6-digits. The first two digits designate the HS Chapter. The second two digits designate the HS heading. The third two digits designate the HS subheading. HS code 1006.30, for example indicates Chapter 10 (''Cereals''), Heading 06 (''Rice''), and Subheading 30 (''Semi-milled or wholly milled rice, whether or not polished or glazed''). HS Hierarchy Structure Rice

In addition to the HS codes and commodity descriptions, each Section and Chapter of the HS is prefaced by Legal Notes, which are designed to clarify the proper classification of goods. To ensure harmonization, the contracting

parties A party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, recreation, or as part of a festival or other commemoration or celebration of a special occasion. A party will often feature ...

to the Convention on the Harmonized Commodity Description and Coding System, have agreed to base their national tariff schedules on the HS nomenclature and Legal Notes. Parties are permitted to subdivide the HS nomenclature beyond 6-digits and add their own Legal Notes according to their own tariff and statistical requirements. Parties often set their customs

duties A duty (from "due" meaning "that which is owing"; fro, deu, did, past participle of ''devoir''; la, debere, debitum, whence "debt") is a commitment or expectation to perform some action in general or if certain circumstances arise. A duty may ...

at the 8-digit "tariff code" level. Statistical suffixes are often added to the 8-digit tariff code for a total of 10 digits. If the number of digits are more than 8, additional digits are called as the national subheading. HS Chapter 77 is reserved for common use by the parties internationally. Chapters 98 and 99 are reserved for national use. Chapter 98 comprises special classification provisions, and chapter 99 contains temporary modifications pursuant to a parties' national directive or legislation. Since its creation, the HS has undergone several revisions - ostensibly, to either eliminate headings and subheadings describing commodities that are no longer traded, or to create headings and subheadings that address technological advancements and environmental concerns. The current version of the HS became effective on 1 January 2017.

Classification

The process of assigning HS codes is known as "HS Classification". All

products Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produ ...

can be classified in the HS by using the ''General Rules for the Interpretation of the Harmonized System'' ("GRI"). HS codes can be determined by a variety of factors including a product's composition, its form and its function. An example of a product classified according to its form would be whole

potatoes The potato is a starchy food, a tuber of the plant ''Solanum tuberosum'' and is a root vegetable native to the Americas. The plant is a perennial in the nightshade family Solanaceae. Wild potato species can be found from the southern United ...

. The classification will also change depending on whether the potatoes are fresh or frozen. Fresh potatoes are classified in position 0701.90, under the Header ''Potatoes, fresh or chilled'', Sub header ''Other'', while frozen potatoes are classified in position 0710.10 under the Header ''Vegetables (uncooked or cooked by steaming or boiling in water), frozen'', Subheader ''Potatoes''. The Harmonized System has six general interpretative rules that must be analyzed in strict order. An example of a product classified according its material composition is a

picture frame A picture frame is a protective and decorative edging for a picture, such as a painting or photograph. It makes displaying the work safer and easier and both sets the picture apart from its surroundings and aesthetically integrates it with them. ...

. Picture frames made of

wood Wood is a porous and fibrous structural tissue found in the stems and roots of trees and other woody plants. It is an organic materiala natural composite of cellulose fibers that are strong in tension and embedded in a matrix of lignin th ...

are classified under subheading 4414.00, which provides for ''Wooden frames for paintings, photographs, mirrors or similar objects''. Picture frames made of

plastic Plastics are a wide range of synthetic or semi-synthetic materials that use polymers as a main ingredient. Their plasticity makes it possible for plastics to be moulded, extruded or pressed into solid objects of various shapes. This adaptab ...

are classified under subheading 3924.90, which provides for ''Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics. Other''. Picture frames made of

glass Glass is a non-crystalline, often transparent, amorphous solid that has widespread practical, technological, and decorative use in, for example, window panes, tableware, and optics. Glass is most often formed by rapid cooling (quenching) of ...

are classified under subheading 7020.00, which provides for ''Other articles of glass''. And so on. An example of a product classified according to its form is personal hygiene

soap Soap is a salt of a fatty acid used in a variety of cleansing and lubricating products. In a domestic setting, soaps are surfactants usually used for washing, bathing, and other types of housekeeping. In industrial settings, soaps are use ...

. When in the form of a bar, cake or moulded shape, such soap is classified under subheading 3401.11, which provides for ''Soap and organic surface-active products and preparations, in the form of bars, cakes, moulded pieces or shapes, and paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent: For toilet use (including medicated products)''. Conversely,

liquid A liquid is a nearly incompressible fluid that conforms to the shape of its container but retains a (nearly) constant volume independent of pressure. As such, it is one of the four fundamental states of matter (the others being solid, gas, a ...

personal hygiene soap is classified under either 3401.20, which provides for ''Soap in other forms'', or 3401.30, which provides for ''Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap''. An example of a product classified according to its function is a

carbon monoxide Carbon monoxide (chemical formula CO) is a colorless, poisonous, odorless, tasteless, flammable gas that is slightly less dense than air. Carbon monoxide consists of one carbon atom and one oxygen atom connected by a triple bond. It is the simple ...

(CO)

detector A sensor is a device that produces an output signal for the purpose of sensing a physical phenomenon. In the broadest definition, a sensor is a device, module, machine, or subsystem that detects events or changes in its environment and sends ...

. If the CO detector captures and displays

gas Gas is one of the four fundamental states of matter (the others being solid, liquid, and plasma). A pure gas may be made up of individual atoms (e.g. a noble gas like neon), elemental molecules made from one type of atom (e.g. oxygen), or ...

measurements, then it is properly classified under subheading 9027.10, which provides for ''Instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus; instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes. Gas or smoke analysis apparatus''. If the CO detector does not capture and display gas measurements, then it is properly classified under subheading 8531.10, which provides for ''Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 85.12 or 85.30. Burglar or fire alarms and similar apparatus''. Although every product and every part of every product is classifiable in the HS, very few are explicitly described in the HS nomenclature. Any product for which there is no explicit description can be classified under a "residual" or "basket" heading or subheading, which provide for ''Other'' goods. Residual codes normally occur last in numerical order under their related headings and subheadings. An example of a product classified under a residual heading is a live

dog The dog (''Canis familiaris'' or ''Canis lupus familiaris'') is a domesticated descendant of the wolf. Also called the domestic dog, it is derived from the extinct Pleistocene wolf, and the modern wolf is the dog's nearest living relative. Do ...

, which must be classified under heading 01.06, which provides for ''Other live animals'' because dogs are not covered by headings 01.01 through 01.05, which explicitly provide for ''live

equine Equinae is a subfamily of the family Equidae, which have lived worldwide (except Indonesia and Australia) from the Hemingfordian stage of the Early Miocene (16 million years ago) onwards. They are thought to be a monophyletic grouping.B. J. Ma ...

'', ''live

bovine Bovines (subfamily Bovinae) comprise a diverse group of 10 genera of medium to large-sized ungulates, including cattle, bison, African buffalo, water buffalos, and the four-horned and spiral-horned antelopes. The evolutionary relationship betwe ...

'', ''live swine'', ''live sheep and goats'', and ''live

poultry Poultry () are domesticated birds kept by humans for their eggs, their meat or their feathers. These birds are most typically members of the superorder Galloanserae (fowl), especially the order Galliformes (which includes chickens, quails, a ...

'', respectively.

Applications

As of 2015, there were 180 countries or territories applying the Harmonized System worldwide, HS code are used by Customs authorities, statistical agencies, and other government regulatory bodies, to monitor and control the import and export of commodities through: * Customs tariffs * Collection of

trade data Trade data, or import and export statistics, consist of statistical data about international trade, typically organized by time period, country, and commodity (using HS codes). Uses Governments, corporations, manufacturers, law firms, trade assoc ...

(

international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy) In most countries, such trade represents a significant ...

statistics) *

Rules of origin Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tari ...

* Collection of internal taxes * Trade negotiations (e.g., the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and e ...

schedules of

concessions) * Transport tariffs and statistics * Monitoring of controlled goods (e.g., wastes,

narcotic The term narcotic (, from ancient Greek ναρκῶ ''narkō'', "to make numb") originally referred medically to any psychoactive compound with numbing or paralyzing properties. In the United States, it has since become associated with opiates ...

chemical weapon A chemical weapon (CW) is a specialized munition that uses chemicals formulated to inflict death or harm on humans. According to the Organisation for the Prohibition of Chemical Weapons (OPCW), this can be any chemical compound intended as a ...

ozone layer The ozone layer or ozone shield is a region of Earth's stratosphere that absorbs most of the Sun's ultraviolet radiation. It contains a high concentration of ozone (O3) in relation to other parts of the atmosphere, although still small in rela ...

depleting substances,

endangered species An endangered species is a species that is very likely to become extinct in the near future, either worldwide or in a particular political jurisdiction. Endangered species may be at risk due to factors such as habitat loss, poaching and inv ...

wildlife trade Wildlife trade refers to the of products that are derived from non-domesticated animals or plants usually extracted from their natural environment or raised under controlled conditions. It can involve the trade of living or dead individuals, ti ...

) * Areas of Customs controls and procedures, including risk assessment, information technology and compliance. Companies use HS codes to calculate the total landed cost of imported products and parts, and to identify selling and sourcing opportunities abroad.

Challenges in classification for companies

HS classification is not always straightforward. Many automotive parts, for example, are not classified under heading 87.08, which provides for ''Parts and accessories of the

motor vehicles A motor vehicle, also known as motorized vehicle or automotive vehicle, is a self-propelled land vehicle, commonly wheeled, that does not operate on Track (rail transport), rails (such as trains or trams) and is used for the transportation of pe ...

of headings 87.01 to 87.05''. Automotive seats are classified as articles of furniture under heading 94.01, which provides for ''Seats (other than those of heading 94.02), whether or not convertible into beds, and parts thereof'', and more specifically under subheading 9401.20, which provides for ''Seats of a kind used for motor vehicles''. In many jurisdictions, traders alone bear the

legal responsibility Responsibility, in the context of the law, may refer to: * Legal obligation * A measure of mental capacity, used in deciding the extent to which a person can be held accountable for a crime; see diminished responsibility. * Specific duties imposed ...

to accurately classify their goods. However, due to a lack of familiarity with the rules of HS Classification traders may inadvertently determine erroneous HS codes for their commodities. Depending on the severity of the infraction, incorrect classification can result in the imposition of non-compliance penalties, border delays or seizures, or denial of import privileges. There are several resources available to traders to assist in properly classifying their goods including: * The Official Explanatory Notes to the Harmonized System, published by the

* *
Explanatory notes to the Combined Nomenclature of the European Union by the European Commission

Customs Rulings Online Search System (CROSS), by U.S. Customs and Border Protection

Binding Tariff Information (BTI), by the European Commission

Informed compliance publications, by U.S. Customs and Border Protection

Classification Guides, by HM Revenue & Customs

Harmonized Tariff Schedule
As the principal US page with updated info about Tariffs.
Integral System of Trade Information (SIICEX)
by the Confederation of Associations of Custom Brokers of the Mexican Republic ( CAAAREM). It provides updated information about tariffs and explanatory notes in order to import and export goods from/to Mexico. It compiles information of many national and international legal regulations. Traders may sometimes resort to usin
HS code determination guides
and other references to classify their traded commodities. These could include local databases published by authorities in other countries. However, such databases are not valid globally. Many Customs authorities around the world allow traders to apply for an advanced HS classification ruling. Such rulings are legally binding in the countries they are issued in and protect the trader from future Customs challenges concerning incorrect classification of their imports and exports.

References

{{reflist

External links

World Bank's list of HS Codes products

EU Combined Nomenclature Search Engine
by European Commission - Eurostat
United Nations Harmonised System

Tariffs by region

Integrated Tariff of the European Union - TARIC

Central Excise Tariff of India
by Department of Customs, Ministry of Revenue

by Customs and Trade, East Africa Community, Governments of Burundi, Rwanda, Kenya, Uganda and the United Republic of Tanzania
Japan Tariff Association – webpage refers to Japan Harmonised System Code Search

Mexico import-export codes (Harmonized Tariff Schedule)
by SIICEX and CAAAREM
UK Tariff Codes Datasets
by Data.Gov.UK
Official Tariff Book of South Africa (South African Revenue Service)
* United States of America :

by

U.S. International Trade Commission The United States International Trade Commission (USITC or I.T.C.) is an agency of the United States federal government that advises the legislature, legislative and executive (government), executive branches on matters of trade. It is an indepe ...

:
U.S. export codes
by

U.S. Census Bureau The United States Census Bureau (USCB), officially the Bureau of the Census, is a principal agency of the U.S. Federal Statistical System, responsible for producing data about the American people and economy. The Census Bureau is part of the ...

Australian Customs & Border Protection Service - Working tariff 2012
Standards Product classifications Chemical numbering schemes World Customs Organization