A bag of rice, a pair of silk gloves and a live dog all end up in the same place at the border: a six-digit code. That code comes from the Harmonized Commodity Description and Coding System, known as the HS, which took effect in 1988.
The World Customs Organization, an independent intergovernmental body based in Brussels, maintains it. More than 200 countries and economies use it as the base for customs tariffs and trade statistics. The Convention behind it was adopted in June 1983 and entered into force in January 1988, and 163 parties have signed on, according to the European Commission. The EU and its member states hold one vote between them.
How the codes are built
The HS has 21 sections and 96 chapters. Numbers run 1 to 97, with Chapter 77 held back for future use. Under the chapters sit 1,228 headings and 5,612 subheadings in the 2022 edition, which took effect on 1 January 2022.
Order follows manufacture. Live animals and vegetables come in the early sections, machinery and precision instruments later. Inside Section X, Chapter 47 covers wood pulp and Chapter 49 printed books and newspapers. In Chapter 50, silk, the first heading is silkworm cocoons and finished silk articles come after.
The digits work in pairs. The first two give the chapter, the next two the heading and the last two the subheading. Code 1006.30 is Chapter 10 (cereals), heading 10.06 (rice), subheading 1006.30 (semi-milled or wholly milled rice).
Legal notes at the start of each section and chapter explain how goods should be classified. Anything without its own description falls into a catch-all “other” heading. A live dog is the example: no heading from 01.01 to 01.05 names dogs, so they go under 01.06, other live animals.
Where countries go further
Six digits is the shared part. Parties to the convention agree to build their national schedules on the HS and its legal notes, but they may split codes further and add their own notes. Duties are often set at eight digits, and statistical suffixes can bring the total to ten. Chapters 98 and 99 are reserved for domestic use.
Classification is not always obvious. Many car parts do not fall under heading 87.08, the one for motor vehicle parts. Car seats are classed as furniture under 94.01. In many jurisdictions the trader alone carries the legal responsibility for getting it right, and a wrong code can mean penalties, border delays, seizures or loss of import privileges. Many customs authorities will issue a legally binding ruling in advance.
The WCO revises the HS on a five-year cycle. Revisions have dropped headings for goods with low trade volumes and added new ones for new technology or goods that raise environmental concerns. Amendments become binding two years after the WCO Secretary General notifies parties.
