Anyone involved in international trade has come across the term “HS Code”. Now whether you are an experienced shipper or taking your first international step, the classification of your goods is something you can’t afford to get wrong. HS codes, short for Harmonized System codes, play a crucial role in the global movement of goods, and any mistakes can be costly (in both time and money).
To keep the process as stress-free as possible, we have collated some of the most common questions we’ve had about HS Codes, to shed some light on what they are, why they’re important and how to use them.
What is an HS Code?
Officially, an HS code, or Harmonized System code, is a standardized numerical code used to classify products when they cross international borders. Essentially that means, it is an internationally recognised way to categorise goods so that when they are shipped, customs can easily understand what they are and what duty rates to apply to them,
Developed and maintained by the World Customs Organization (WCO), the Harmonized System ensures a uniform and consistent classification of goods, making international trade a smoother and more efficient process.
Each HS code is a unique combination of digits, which provides a description of the type of product in question, special characteristics, and its intended use.
Are HS Codes the same for importing and exporting?
Yes, HS codes are the same for both imports and exports, as long as the product in question is the same.
The HS code system is a globally accepted classification standard used by customs authorities worldwide, so the codes remain consistent to ensure goods are classified in the same way, regardless of whether they are entering or leaving a country.
How do I choose the right HS code for my goods?
Selecting the right HS code for your product is a critical step, as misclassification of goods can cause hold-ups or even fines when trying to clear customs. Some ways to find out which code is right for your goods are:
- Online Databases: Most countries offer online databases and search tools on their governmental websites which allow you to search for the appropriate code. You can typically search by the product descriptions or certain keywords. Check out the UK and USA sites here: UK Gov Website | USA HS Codes Website
- Get expert help: If you're unsure about the correct HS code for your product, it’s always best to consult with professionals who deal with customs clearances every day, like customs brokerages or freight forwarders. Logistical partners can assist you in understanding the classifications so you can choose the right code that best matches your product.
- Harmonized System Handbook: The World Customs Organisation (WCO) regularly publishes updated versions of their ‘Harmonized System Handbook’, which offers detailed explanations of each HS code. However, if you’re not up for reading the near 300page document, we’d recommend a different method.
How Many HS Codes Are There?
There are thousands of HS codes, as the system is designed to be comprehensive and clear, classifying virtually all types of goods traded internationally. There are also codes which can mean similar products, highlighting quite niche differences, so it’s important to check you’re categorising your goods the right way.
How Many Digits Are in an HS Code?
An HS code can consist of up to 10 digits. The more digits in the code, the more precise the classification of the product.
The first six digits are uniform across all countries and represent a broad overall category of goods. Additional digits (usually four) are used by individual countries to further specify and classify products according to their national regulations.
Is a Commodity Code the Same as an HS Code?
The term "commodity code" is often used interchangeably with "HS code." Both refer to the same classification system. The term "commodity code" may be more commonly used as a more accessible term, as not everyone may understand what HS stands for in the first instance.
HS codes are the foundation of international trade, providing clarity when businesses look to trade their goods internationally. By offering this standardised classification system it can simplify the process for customs declarations, calculation of any tariffs due, and to map out national trade statistics. With the right HS code, you can ensure that your goods cross borders smoothly and in compliance with the rules and regulations of your trading partners.
Do you have a question about HS Codes which we haven't covered here? Get in touch with our expert team who would be happy to help.
