Harmonized Codes -Classifying Products

1. Harmonized Codes -Classifying Products International System of Numbering used to Classify Products

2. Classifying your Product • Helps identify potential foreign markets • Helps track activities of competitors • where similar products are being shipped, • quantities shipped, • revenue generated off the shipments. • Helps track foreign import tariffs • Needed to look up tariff rates; determine whether product qualifies for preferential treatment under trade agreement like NAFTA • Needed to complete SED shippers export declaration form, certificate of origin, etc.

3. How Harmonized System Works: HS consists of 22 sections divided into chapters; all products are described by a ten digit number that is broken down by chapter, heading subheading Section 1 Live Animals and Animal Products contains 5 chapters • 03 (Chapter in which commodity is classified) Fish and crustaceans, molluscs and other aquatic invertebrates • Examine all chapters in section before selecting specific chapter. • N.e.s.o.i. ((not elsewhere specified or included) catchall category my cover your product • Read chapter notes for help in classification • 0302 (Heading in chapter) Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304 • 0302.12 (Subheading) Pacific salmon, Atlantic salmon and Danube salmon • First six digits are standardized worldwide • Subheadings are specific • 0302.12.0012 (Commodity code) Chinook (king) salmon • Last four digits may vary from country to country • 0000 means country did not want to classify any further

4. Schedule B vs. HTS • Schedule B is used for exporting products from U.S. • (Managed by U.S. Census Bureau in Dept. of Commerce) • Harmonized Tariff Schedule (HTS) used when importing into the U.S. • (Managed by Office of Tariff Affairs and Trade Agreements in U.S. International Trade Commission) • Used by customs to identify products for application of duties • First six digits of both codes are the sameBut last four digits may and do vary.

5. Hints for Locating Correct Schedule B Code • Go to Schedule B book Harmonized System (HS) and the Schedule Bhttp://www.trade.gov/td/tic/tariff/hs_numbers.htm • Check index for quick way of determining how product is classified • Use search function on internet version • Consult HTS since first 6 digits the same for both and HTS may include other terms • Telephone U.S. Census Bureau of the U.S. Department of Commerce (local) or CITD or local U.S. Customs office • Jagodka Concordance and Lookup http://elearn.mtsac.edu/rjagodka/Classification/Classification.asp • Binding Rulings (Free service of U.S. Customs; used for imports) • Review your product information and make a final determination

6. Standard Industrial Classification Code (SIC) • 4 digit code which describes what a company does, e.g. 7378 is SIC for company “primarily engaged in the maintenance and repair of computers and computer peripheral equipment” • Standard Industrial Classification (SIC) system • http://www.census.gov/epcd/www/sic.html

7. North American Industry Classification System (NAICS) • 6 digit code which has replaced the U.S. Standard Industrial Classification (SIC) system. • Developed jointly by the U.S., Canada, and Mexico • Identifies many new businesses • North American Industry Classification System (NAICS) • http://www.census.gov/epcd/www/sic.html

8. Standard International Trade Classification (SITC) • Developed by United Nations for reporting international trade statistics • 3 to 5 digits and many statistics only reported at the 2 to 3 digit level • About 100 countries report import and export trade statistics to UN (See UN COMTRADE data base for imports) • Standard International Trade Classification (SITC) system • http://unstats.un.org/unsd/cr/family2.asp?Cl=14

9. Locating Statistical Trade Resources • Click on http://elcamino.citd.org/trade_info/index.cfm and Go to Trade Resource Directory