HS codes are essential for companies operating abroad.
HS stands for ‘Harmonised System’ and indicates the system used to classify globally traded products.
The system is based on assigning goods a standardised numerical code, which is used by customs authorities to calculate duties, taxes and collect statistical data.
How is the classification structured? Why is it useful to know HS codes?
More importantly, how can you easily identify the correct ones for your export business?
We will answer all these questions in our article.
Harmonized System: how it is structured
The Harmonized Commodity Description and Coding System (or more briefly Harmonised System) is governed by a convention drawn up by the World Customs Organisation (WCO), the intergovernmental organisation engaged in the coordination of world customs policies.
The system is updated every 5 years to reflect the evolution of the global market and the goods traded within it.
Recognised by over 200 public authorities, it is used to standardise the identification of the same product traded between different countries through the assignment of a six-digit code.
To these, the authorities of individual countries may add further digits for statistical and analysis purposes.
In the case of the European Union, for example, the Commission annually updates the so-called Combined Nomenclature (CN), which is based on the use of eight digits and used for trade within the Union.
The code assignment is in fact based on the principle of increasing significance.
What does this mean?
The greater the number of digits that make up the code, the greater its specificity in describing the product.
However, it is the first 6 digits that are officially recognised internationally, which is why importers in foreign countries often do not immediately recognise the codes used by exporters.
To date, HS codes are used for more than 5,000 categories of goods, included within 21 different sections.
- Section I (Chapters 1-5, live animals; animal products).
- Section II (Chapters 6-14, vegetable products).
- Section III (Chapters 15, animal, vegetable or microbial fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes).
- Section IV (Chapters 16-24, prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco).
- Section V (Chapters 25-27 mineral products).
- Section VI (Chapters 28-38 products of the chemical or allied industries).
- Section VII (Chapters 39-40, plastics and articles thereof; rubber and articles thereof).
- Section VIII (Chapters 41-43, raw hides and skins, leather, furskins and articles thereof; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut).
- Section IX (Chapters 44-46, wood and articles of wood; wood charcoal; cork and articles of cork; manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork).
- Section X (Chapters 47-49, pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard; paper and paperboard and articles thereof).
- Section XI (Chapters 50-63, textiles and textile articles).
- Section XII (Chapters 64-67, footwear, headgear, umbrellas, sun umbrellas, walking sticks, seat-sticks, whips, riding-crops and parts thereof; prepared feathers and articles made therewith; artificial flowers; articles of human hair).
- Section XIII (Chapters 68-70, articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware).
- Section XIV (Chapters 70, natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin).
- Section XV (Chapters 72-83, base metals and articles of base metal).
- Section XVI (Chapters 84-85, machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles).
- Section XVII (Chapters 86-89, vehicles, aircraft, vessels and associated transport equipment).
- Section XVIII (Chapters 90-92, optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof).
- Section XIX (Chapters 93, arms and ammunition; parts and accessories thereof).
- Section XX (Chapters 94-96, miscellaneous manufactured articles).
- Section XXI (Chapters 97, works of art, collectors’ pieces and antiques).
Choosing the right codes: why it is crucial for your business
As you can guess, using the correct HS codes allows you to avoid problems when exporting.
Correct identification of codes allows you to avoid blocking goods at customs in foreign countries, both EU and non-EU.
This can reduce export times or unplanned costs such as fines.
That is why it is necessary to pay the utmost attention to the correct filling in of all customs documentation, employing experienced staff and using reliable sources to search for information.