Harmonized System Codes, HS codes for short, are used to classify goods for international trade, establish duty rates, and collect trade data. They are 10 digits long and divided into five different sections. The first two digits indicate the chapter in which your product belongs. The next two digits determine the heading, which defines the general category of your product. The last two digits are a statistical suffix that establishes duty rates and is unique to the United States.
The upcoming HS 2024 edition will include a number of amendments to accommodate new sales models and improve data accuracy. For example, it will introduce new HS shipping code categories for placebos and cell therapy products to facilitate their movement across borders. It will also establish special terms for shipments of medical equipment intended for use in outbreaks of infectious disease.
Keeping up with HS code changes is essential for manufacturers who sell internationally. Otherwise, they risk losing sales due to delays in product shipment and inaccurate product information on marketplaces.
What is Your HS number?
As you know by now, HS codes are globally standardized for international trading. However, some countries add their own flair to the system. For example, the USA uses ten digits to classify products; the first six are the HS code, and the last four describe the specific product to be imported.
To determine your HS code, you need to understand your product’s specifications in detail. This is why it’s important to partner with an expert. Traders who improperly classify their goods risk paying top-up duty or tax bills and face border delays or seizures of their goods.
You can use the free HS Schedule B search tool provided by the Census Bureau to find your HTS number. The tool asks you to describe your product and then provides several auto-fill suggestions. You can also choose additional information about your product to narrow down on the right code.
Is the HS Code the Same for All Countries?
The HS code system is managed and monitored by the World Customs Organisation (WCO), which is an intergovernmental body with over 200 member countries. The HS is an internationally-standardized system for classifying traded goods and assessing tariffs.
The WCO updates the HS every five years to ensure that it stays current with international trade trends and rules. The first six digits of the HS are always the same; however, the later digits can change depending on the country.
Careful classification of your products is critical to prevent delays and hefty fees at the border. Wrongly classified goods can also result in a loss of origin status, which could lead to reduced or eliminated import duties.
Incorporate a ten-digit HS code into your commercial invoice and other shipping documents to save time and money at the border. Try IncoDocs to streamline your global trade documentation and get a free trial today. You’ll be glad you did!