Have you ever wondered how goods are classified, organized, and shipped all over the world? The answer is the Harmonized System (HS), an internationally universal system that assigns a code to each type of product. This classification system is based on the World Customs Organization's (WCO) Harmonized Commodity Description and Coding System (HS). In this guide, we'll be taking a look at the basics of understanding what HTS Code Classification is and how it works.
The HS code is a six-digit alphanumeric code that identifies any product, providing a globally consistent language and standard for trading. The first six digits are the base for the HTS code. The HS code helps ensure that shipments are shipped without any delays or discrepancies.(see example)
The Harmonized Tariff System (HTS) consists of codes ranging from seven to 10 digits and it is country-specific. This code is used to determine the correct product and duty rate for a country as well as any applicable restrictions or requirements. It also helps to determine if the product is subject to quotas, embargoes, or other restrictions and can help in determining the origin of goods. In addition to providing product classification information, the HS code provides statistical and census data to countries. The ten-digit code is also known as a Schedule B number; however, the Schedule B number is used only for U.S. exports and is not the same number that might be used for importing into the U.S. (see example)
The duty rate assigned to a commodity dictates the percentage of the good's value that the importer of record will owe in Customs taxes. Prior to purchasing goods from overseas, it's in the importer's best interest to have a measurement of the amount of duty that will be paid to U.S. Customs annually. The size of the U.S. Customs bond will be determined by the amount of duty paid by the importer each year.
While an understanding of the HTS system is an incredibly useful tool for anyone involved in international trade, Strix is here to provide its expertise in customs regulation and the classification of your imported goods that is required to avoid complications created by misclassification. With Strix, as your trusted partner, you can have peace of mind knowing your cargo is correctly classified and is in good hands.
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