Harmonized System (HS) Codes
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Harmonized System (HS) codes
HS codes, accepted by the majority of nations around the world, are identification codes given to goods for use in international trade. The HS codes are administered by the World Customs Organization (WCO) and are internationally accepted for use by customs authorities and companies to identify goods.
Key features of HS codes:
- Six digit code to classify the goods
- Defined rules that classify the goods
- Act as a uniform standard for classification of goods worldwide
- Covers 98% of goods in international trade and over 5000 commodities
Why you need your HS codes
The correct HS code for your goods will be required for use in legal and commercial documents when undertaking trade.
Some examples of use are in sales contracts, bills of lading, letters of credit, and certificates of origin.
Some of these legal and commercial documents are needed when applying for trade finance.
HS codes are also used by customs authorities to apply tariffs and taxes to goods and keep track of imports and exports.
HS general rules
The WCO has a comprehensive classification system for HS codes. The goods will fall under a section and follow onto chapters, headings, and sub-headings, each step increasing in specificity.
There are 21 sections, 99 chapters, 1,244 headings, and 5,224 sub-headings.
The anatomy of an HS Code:
- First two digits: Chapter
- Second two digits: Heading
- Final two digits: Sub-heading
Using the WCO Harmonized System webpage you can identify the HS code for your goods with their classification key.
Example: HS code for roasted caffeinated coffee
The HS code for ‘roasted caffeinated coffee’ would be (0901.21).
The importance of HS codes in international trade
The acceptance and versatility of the HS code as a universal economic language and code for goods has made it an indispensable tool for international trade, incorporated into many customs clearance systems around the world.