HS Codes: What Are They Used For and Which One Applies to Your Products?
The Harmonized System for the Description and Coding of Goods, abbreviated as HS Code, is a global standard for describing products that need to be shipped internationally.
As soon as goods cross an international border, they must be declared to customs using one or more HS Codes.
For countries within Europe, the external border of the European Union acts as the customs border, since there is free movement of goods within Europe.
HS Codes help standardize and identify cargo, regardless of the country in which the goods are located.
The HS Code includes 5,000 product groups, divided into 99 chapters and 21 sections.
HS Codes consist of a six-digit code.
HS Codes are supported by clear descriptions, so that there is no confusion worldwide regarding product classification.
HS Codes are legally and logically classified within a structure.
How Is the HS Code Used?
The code is used by multiple international organizations and by over 100 governments for:
Taxation
Trade policy
Monitoring
Freight and transport tariffs
Collection of traffic and trade statistics
Economic research and analysis
More than 98% of all internationally transported goods are classified under the HS Code system.
By using HS Codes:
Total international transport costs are reduced (no need for translators to describe goods)
Customs processing is faster
Example: Pineapples – HS Code 08.04.30
Pineapples fall under Section II, Vegetable Products:
Chapter 08: Edible fruits and nuts
Heading 04: Dates, figs, pineapples, avocados, etc. – fresh or dried
Category 30: Pineapples
In addition to the global HS Code, the European Union has extended the HS Code for import and export purposes:
The HS Code is extended by 2 digits for specific export measures.
This 8-digit code (HS + 2) is known as the Combined Nomenclature (CN Code) and relates to exports.To connect import measures, the EU adds 2 more digits to the CN Code, resulting in the TARIC Code.
The Classification Challenge for Entrepreneurs
The acceptance and versatility of the HS Code as a universal product code and global trade language has made it an indispensable tool in international trade, now embedded in many customs clearance systems worldwide.
However, using the correct HS Code can be challenging, since the interpretation of codes can vary by country and by use case.
Incorrect use of an HS Code can result in:
Incorrect tariffs applied by customs
Higher import costs for the customer
Fines or penalties if seen as misleading or fraudulent use by customs authorities
If in doubt, you can always ask The Freight Hero for help in determining the correct HS Codes for your products.