Benefits of automating HS code assignment

November 30, 2021

To facilitate global trade, the World Customs Organization administers the Harmonized System (HS), which provides a common nomenclature to describe traded goods by names and numbers. The number of digits in a complete HS code varies, but the first six digits are harmonized, meaning that they must be the same in all countries. The following digits are unique to the country to which the goods are exported.

Not using a country's full HS code makes a big difference

First of all, it could expose your company to regulatory violations. Even if the product successfully enters the country once or twice with only the List B code, continued use of an incorrect code could result in a fine or prohibition from exporting to that country in the future. In addition, a quota may be applied to the product in question.

Consider also a second possibility: Failure to use the correct code could result in the shipment being stopped altogether or delayed until it is correctly classified. The repercussions don't end there and can extend to your customer. Delays can turn a happy customer into a dissatisfied one.

Finally: If the proper HS code is not used, Customs will likely classify the product in the "Other" category for duty and tax purposes. The "Other" category usually imposes the highest possible rates. Therefore, you (or your customer) will pay unexpected and excessive duties and taxes.

Using a fully qualified HS code avoids all these problems and gives you the power to predict accurate costs in advance

The HS code system can be very frustrating when first encountered. Fortunately, companies like Crossborderit (CBIT) can help you make sure your codes are correct to facilitate your international shipping.

Simply register with CBIT and ship hassle-free.

Damon Baca

Co-Founder

Crossborderit (CBIT)

www.crossborderit.com/IOSS