Ensuring that goods are aptly classified in the right customs tariff classification on importation is crucial to the smooth flow of international trade.
This brings not only certainty that the correct amount of duties are paid on any goods, but also helps maintain visibility into global trade and ensures that importers and exporters are obeying all the relevant rules for their goods in each territory and comply to the rules of origin content specifications too.
Customs classifications are vital in determining how much import duties and tariffs businesses will be required to pay, as well as helping complete import or export declarations and other essential paperwork. Import duties the world over, are mainly calculated using the classification code, along with the country of origin and the value of the items.
Any goods imported into a country will require a classification code that specifies what the shipment contains. This is usually a six to ten-digit code that informs customs officials of both the general category of the goods and their specific details. This is commonly known as the Harmonised System of classification.
The Harmonised System (HS) is a standardised numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics. The HS is administrated by the World Customs Organization (WCO) and is updated every five years.