What is an HS Code?
‘HS’ stands for Harmonised System or, in its long form, the ‘Harmonised Commodity Description and Coding System’. Developed in 1988 by the World Customs Organisation (WCO), HS Codes are typically 6- to 10-digit figures that all goods require for international transport. There are thousands of HS Codes, and each code describes specific goods. All customs agencies are able to identify these goods easily using the number associated with the particular commodity.
The code is structured and logical, stemming from the Kyoto Convention of 1974. A useful example to look at is as follows:
Who uses the HS Code?
HS codes are used extensively by over 200 countries that are contracted to the Convention on the Harmonized Commodity Description and Coding System (also known as the ‘HS Convention’). Customs authorities not only use HS codes to identify what goods are being shipped; They also use them to apply relevant customs duties, taxes and regulations. Governments also use HS codes to collect global trade statistics and create tariffs.
Private companies use the same system to monitor goods, develop and advocate trade policies, collect statistics on traffic and transport as well as monitor prices.
Where do I need to use HS Codes in shipping?
When shipping freight, it’s integral that you use the relevant HS Code on each line on your commercial invoice.
Using an HS Code on a commercial invoice ensures that exports make it through customs seamlessly and without delay. That way, importers will receive their goods faster and exporters are paid sooner. Failure to place the HS Code on the commercial invoice could risk the importer paying the incorrect tax. You also may end up paying interest on any back-payments for incorrect classification, and your goods may even be seized.
How do I find the right HS Code for my shipment?
Normally supplier tells you the specific HS code, However, we advise our customers to double-check with us before making relevant shipping documents.
The Consignee or Importer is responsible for determining the HS Code suitable for the country of import. It may be that the shipper defines the HS Code for export, but this is not the most appropriate code for the customs entry on the import. A good customs broker, such as Catalyst Shipping, will be able to advise appropriate HS Codes for your cargo.