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Understanding Harmonized System Codes for International Trade

Harmonized System (HS) codes facilitate product classification for global trade. Learn how to use HS codes to identify markets, track competitors, manage tariffs, and complete export documentation efficiently.

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Understanding Harmonized System Codes for International Trade

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  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

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