HS codes, also known as Harmonized System codes, commodity codes, or tariff codes, play an important role in international trade. They are used to identify products so that customs authorities worldwide can charge the correct duties and taxes. These codes are essential for businesses engaged in shipping goods internationally, ensuring smooth and efficient customs processes.
What are HS Codes?
HS stands for Harmonized System, an internationally standardized system of names and numbers developed by the World Customs Organization (WCO) to classify products. The primary purpose of Harmonized System codes is to facilitate international trade by providing a common language for goods classification. This standardized system allows for consistent identification of products across different countries, simplifying the process of calculating customs duties and taxes.
Structure of Harmonized System Codes
Harmonized System codes can be 6, 8, or even 12 digits long, depending on the country you’re shipping to. The length of the code generally reflects the level of detail required by the customs authority in the destination country. The structure of an HS code is hierarchical and follows a logical sequence:
Chapter (2 digits)
The first two digits of a Harmonized System code represent the chapter. There are 99 chapters in the HS system, each covering a broad category of products. For example, Chapter 62 covers articles of apparel and clothing accessories.
Heading (4 digits)
The next two digits provide more specific information about the product within the chapter. For instance, under Chapter 62, the heading 6204 covers women’s or girls’ suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches, and shorts (other than swimwear).
Subheading (6 digits)
The final two digits of the six-digit HS code give even more detailed information about the product. For example, under heading 6204, subheading 6204.49 specifically refers to women’s dresses of other textile materials (not knitted or crocheted).
In some countries, the Harmonized System code may be extended beyond six digits to provide even more detail. These additional digits are used to meet national requirements for statistical and tariff purposes.
Why Do You Need a Harmonized System Code?
Harmonized System codes are mandatory for shipping items into the European Union (EU) from a non-EU country. Additionally, many countries outside of Europe are increasingly requesting Harmonized System codes as part of their customs processes. There are several reasons why HS codes are essential for international shipping.
Correct Customs Charges
HS codes help ensure that the correct customs duties and taxes are applied to the items being shipped. Different types of goods attract different rates of duty, and the Harmonized System code provides the necessary information to determine the correct charge.
Avoiding Delays and Stoppages
If you don’t provide a valid Harmonized System code for every item in your package, you could receive incorrect customs charges, and your package may be delayed in customs or stopped entirely. This can lead to frustration and additional costs for both the sender and the recipient.
Compliance with Regulations
Providing accurate Harmonized System codes is a legal requirement in many countries. Failure to comply with these regulations can result in penalties and fines.
Simplifying Trade
HS codes help standardize and simplify international trade, making it easier for businesses to export and import goods. This standardization reduces the risk of errors and misunderstandings in the customs process.
How to Find HS Codes?
Finding the correct Harmonized System code for your shipment is important for ensuring a smooth customs process. When you ship a parcel through services like SFL Worldwide, you’ll be directed to an HS code lookup tool during the booking process. This tool can help you find the correct codes for your items.
Here’s a step-by-step guide on how to find HS codes:
- Identify the Product: Start by identifying the product you’re shipping. Be specific about the item, including its material, use, and any other relevant details.
- Use an HS Code Lookup Tool: Many websites and online tools are available to help you find the correct HS code. These tools allow you to search by product description, keywords, or category.
- Check Official Resources: The World Customs Organisation provides official resources and databases for finding HS codes. Additionally, many national customs authorities have their own databases and lookup tools.
- Consult with Experts: If you’re unsure about the correct HS code for your product, consider consulting with a customs broker or trade compliance expert. These professionals have the knowledge and experience to help you navigate the complexities of HS codes.
Examples of Harmonized System Codes
To give you a better understanding of how HS codes work, here are some examples of HS codes for different types of products:
- Clothing: There is no generic HS code for clothing. Instead, there are multiple HS codes for clothing, which vary depending on the item of clothing you’re sending, who it’s for, what it’s made of, and what it’s used for. For example:
- 6204.49 Women’s dresses of other textile materials (not knitted or crocheted)
- 6204 = Women’s or girls’ suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches, and shorts (other than swimwear)
- 49 tells customs what material it’s made from.
- 6204.49 Women’s dresses of other textile materials (not knitted or crocheted)
- Food and Drink: HS codes for food and drink products can vary widely depending on the type of food or beverage and its ingredients. For example:
- 1905.90 Bread, pastry, cakes, biscuits, and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper, and similar products.
- 1905 = Bread, pastry, cakes, biscuits, and other bakers’ wares
- 90 provides additional detail about the specific product.
- 1905.90 Bread, pastry, cakes, biscuits, and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper, and similar products.
- Household Items: Household items also have their own HS codes, which can vary based on the type of item and its materials. For example:
- 7013.49 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration, or similar purposes, other than that of heading 7010 or 7018 (other than of lead crystal).
- 7013 = Glassware of a kind used for table, kitchen, toilet, office, indoor decoration, or similar purposes
- 49 indicates the specific type of glassware.
- 7013.49 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration, or similar purposes, other than that of heading 7010 or 7018 (other than of lead crystal).
Common Challenges with HS Codes
While HS codes are essential for international trade, there are some common challenges that businesses and individuals may face when using them:
Complexity and Specificity
HS codes can be complex and highly specific. Finding the correct code for a particular product can be challenging, especially for items that have multiple uses or are made from various materials.
Changes and Updates
The Harmonized System is regularly updated to reflect changes in technology, trade patterns, and industry practices. Keeping up with these changes and ensuring that you’re using the most current codes can be difficult.
Differences Between Countries
While the HS system is standardized internationally, some countries may have additional codes or variations to meet their specific needs. This can create confusion and require additional research to ensure compliance with local regulations.
Penalties for Errors
Incorrectly classifying a product can result in incorrect customs charges, delays, and potential penalties. Ensuring accuracy is important to avoid these issues.
Tips for Using Harmonized System Codes
To help you deal with the complexities of HS codes and ensure a smooth customs process, here are some tips:
- Do Your Research: Take the time to research and understand the HS codes relevant to your products. Use official resources and lookup tools to find accurate information.
- Stay Updated: Keep up with changes and updates to the HS system. Subscribe to newsletters or updates from the World Customs Organisation or your national customs authority.
- Consult Experts: When in doubt, consult with customs brokers, trade compliance experts, or other professionals who can provide guidance and ensure that you’re using the correct Harmonized System codes.
- Double-Check Your Codes: Before shipping, double-check your Harmonized System codes to ensure accuracy. Verify that the codes match the descriptions of your products and are up-to-date.
- Use Online Tools: Take advantage of online Harmonized System code lookup tools provided by shipping companies, customs authorities, and other organizations. These tools can simplify the process and help you find the correct codes quickly.
Conclusion
HS codes are a fundamental part of international trade, providing a standardized system for classifying products and ensuring the correct customs duties and taxes are applied. By understanding what Harmonized System codes are, why they are necessary, and how to find and use them correctly, businesses and individuals can ensure a smoother and more efficient customs process.
While there are challenges associated with HS codes, including their complexity and the need to stay updated, these can be managed with the right approach and resources. By doing thorough research, consulting experts, and utilizing online tools, you can navigate the complexities of Harmonized System codes and avoid common pitfalls.
As technology continues to advance and global trade evolves, the importance of HS codes will only grow. Staying informed and adapting to changes in the Harmonized System will be important for anyone involved in international shipping and trade.
FAQs about HS Codes
What happens if I use the wrong HS code?
Using the wrong HS code can result in incorrect customs charges, delays, or even seizure of your shipment. It’s crucial to verify and use the correct codes.
Can I find HS codes online?
Yes, many online tools and databases, including government websites, provide HS code lookup services to help you find the correct code for your product.
Are HS codes the same in every country?
The first six digits of an HS code are standardized globally, but additional digits may vary by country, reflecting more specific national requirements.
Do I need an HS code for each item in a multi-item shipment?
Yes, each item in your shipment must have its own HS code to ensure accurate customs processing and duty assessment.
How often are HS codes updated?
HS codes are updated approximately every five years by the World Customs Organization to reflect changes in technology and trade practices.
Can I use the same HS code for different materials of the same product?
No, different materials often require different HS codes. Ensure you select the correct code based on the specific material of your product.
Is there a penalty for not using HS codes?
Yes, failure to use HS codes can lead to fines, shipment delays, and increased scrutiny by customs authorities, affecting your overall shipping efficiency.
I’m Tammy Waller, a supply chain and logistics specialist with over 10 years of expertise. I’ve been an author and SFL employee for over 10 years.
As an author, I’ve been able to teach others. I love guiding users through supply chain and logistics operations.
I have substantial experience managing logistics operations, supply chain management, transportation, inventory management, and warehousing in shipping-moving and logistic services. I’ve worked on many worldwide logistics and supply chain projects, honing my abilities in negotiating rates, scheduling shipments, and managing vendors.
