IMPORT COMPLIANCE FAQs
What is an HTS Code?
HTS (Harmonized Tariff Schedule) Codes are a system for classifying products and goods being imported into the United States. They are administered by the U.S. International Trade Commission (ITC), and are 10 digits long, with the first six digits corresponding to the international Harmonized System (HS) codes, and the final four digits being U.S.-specific suffix numbers assigning further categorizations to items. These codes can be used to concisely determine what import restrictions and fees are relevant to the product being imported.
Accurately identifying the products and goods you are importing is crucial to being able to assess the relevant duties and fees. This process takes the form of comparing the goods and products against government schedules and lists, where products of different descriptions are assigned unique codes.
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What is an HS Code?
Harmonized System (HS) Codes are six-digit identifiers that have been developed by the World Customs Organization (WCO) for the purposes of facilitating international trade. These codes are used to classify goods and products that are being traded across international borders, and are typically used by most customs authorities around the world. HS codes are also used as the basis for further specialized classification systems used by many countries for international trade, by adding more digits beyond the first six. For example, the United States Harmonized Tariff Schedule and Schedule B codes are both based on the Harmonized System, with both of them using ten digit codes, the first six of which are identical to the corresponding HS code.
What is the best practice when classifying goods for customs?
Classifying imported goods for customs involves looking up the HS/HTS code list (as appropriate) and determining which fits your product the best. Given that HS/HTS code descriptions are more generalized (since they have to cover a wide range of products), there can be ambiguity and room for interpretation involved. It is advisable to always pick HS codes which more specifically line up with your goods, over more general ones (e.g., “phones for cellular networks” is preferable for a smartphone than “wireless communications device”).
Given the potential ambiguity involved in the process, it is always best to document the exact line of reasoning for arriving at a classification decision; this can be used to demonstrate that the minimum standard for reasonable care was exercised, in the event of an audit. Import classification and compliance solutions can help importers properly determine the HTS code for their products.
Are Schedule B and HTS numbers the same?
They are not the same. Schedule B codes are used to classify products and goods for export, more specifically used by the U.S. Census Bureau to track export volumes. The first six digits of Schedule B and HTS numbers are the same for a corresponding product; however, beyond those first six digits, the codes begin varying, and there can be substantial divergences and differences. Given that Schedule B and HTS codes are used for different purposes, importers should always only use the relevant code for their purposes – HTS codes when importing, and Schedule B codes when exporting.
What are explanatory notes?
Explanatory notes are complementary material that are not considered an “integral part” of the Harmonized System (HS) Convention. They nonetheless serve an important (if informal) purpose, since they comprise the official interpretation and scope of HS code classifications by the World Customs Organization. Even so, explanatory notes are not legally binding or enforceable, and should be used by importers to clarify points of ambiguity or doubt, rather than as a sole basis for classifying products.