What are HS Codes?
The Harmonized System (HS) code is a classification system created, developed, and maintained by the World Customs Organization (WCO). A good or a commodity is classified by an HS code, which is internationally recognized in almost every country and commonly used by customs to clear shipments.
With customs and government bodies having a common reference point to enforce regulations based on HS classes, a standard approach to each HS class is established. This creates a more organized importing/exporting structure and provides a guideline for countries implementing new regulations.
The international classification system HS Code maintained by the WCO is often extended or subdivided by national or regional HS codes. For instance, ASEAN countries follow the ASEAN Harmonized Tariff Nomenclature (AHTN), where the first six digits reference the international HS codes, but an additional two digits further break down the sub-headings.
Why Do You Need to Classify Your Products?
The correct HS code for your goods is required for use in legal and commercial documents when engaging in trade. Examples include sales contracts, bills of lading, letters of credit, and certificates of origin. HS codes are also used by customs authorities to apply tariffs and taxes to goods and to keep track of imports and exports.
HS General Rules
The WCO has a comprehensive classification system for HS codes. Goods fall under a section and are further classified into chapters, headings, and sub-headings, each step increasing in specificity. There are 21 sections, 99 chapters, 1,244 headings, and 5,224 sub-headings.
The Anatomy of an HS Code:
First two digits: Chapter
Second two digits: Heading
Final two digits: Sub-heading
Classifying Your Goods
Using the Tradeplan HS Code AI Finder, you can easily and accurately identify the HS code for your goods. For example, the HS code for roasted caffeinated coffee.
International HS codes update cycle
The WCO updates its HS code system every five years to adapt to the evolving needs of the global trade environment. In January 2022, the WCO published the 7th edition of the HS, with slight amendments to the HS code rules. The speed of adoption varies between countries; however, large trading blocs such as the EU updated their systems on January 1, 2022.
Before exporting or importing, ensure that your goods are correctly classified and meet the requirements of the customs authorities (national HS code) along your trade route. This is also important when using the codes in your relevant legal and commercial documentation.
