Harmonized System (HS) Code
The complexity of product diversification has been increasing over the years. As globalization made its way into global supply chains, there was a need to classify all these categories in a standardized way recognized by administrative bodies and companies around the world. The Harmonized System (HS) Code was designed to label all existing goods with precise details through the HS Code, making it easier to identify products internationally.
What is the Harmonized System (HS) Code?
The Harmonized System (HS) Code is a classification system created, developed, and maintained by the World Customs Organization (WCO). Each product is identified by an HS Code, which is internationally recognized in almost every country and is commonly used in customs for clearing shipments.
Since customs and government agencies now have a common reference point for implementing regulations based on HS categories, they can create a standard for handling each HS category in the same way. This, in turn, creates a more organized import/export structure and provides good guidelines for countries wishing to implement new regulations.
How do you obtain an HS Code for a product?
Each code in the HS system consists of six digits. The first two digits determine the chapter under which the HS Code falls. There are 21 chapters, each providing a general description of the category. The following four digits comprise the heading and subheading within the chapter.
ASEAN countries follow the ASEAN Harmonized Tariff Nomenclature (AHTN) – where the first six digits still refer to the international Harmonized System (HS) Codes, but there are two additional digits at the end that further break down the subheadings. Goods shipped within ASEAN typically use the eight-digit AHTN classification, but the six-digit HS Codes are also considered valid.
Here are some examples of HS Codes for everyday items:
How to Use the Harmonized System (HS) Code?
Companies are encouraged to reference the HS Code in their shipping documents to ensure a standardized method of clearance each time. The shipper is always responsible for providing the HS Code for use.
If you have spent time browsing through the TradeNet portal, you will see that not only are there thousands of different HS Codes, but each product is also categorized into very specific descriptions.
For example, there is a category for men’s shirts made of cotton, another for men’s shirts made of synthetic fibers, and yet another for men’s shirts made from other textiles — and the list goes on, with a total of about 10 different codes for the item “shirt.”
Some goods may, in certain cases, have overlapping codes, where two or more codes apply. In such instances, the shipper only needs to choose one—usually the closest possible match to the actual item.
Customs authorities in almost every country have already established different regulations based on various classifications. When you include an incorrect code, there is a risk of unintended duties and taxes, higher import restrictions, or, in the worst-case scenarios, denial of entry into the destination country.
While it is not mandatory to include the HS Code for your product in any of the documents, it is always recommended to reference it on your invoice to provide a clear and accurate representation of your shipment’s contents, especially if the item you are shipping is technical.
Let’s use the example of “TV parts” as a description on your invoice. Although the product description might seem clear and straightforward, TV parts can be categorized into different categories, and within each category, they can be further divided by the technical aspects of the component. The HS Code is needed to clearly label the exact part you are shipping.
What does Badr International Shipping (BIS) offer?
Badr International Shipping, a leading company in international shipping and customs clearance in Saudi Arabia, handles all types of air parcels and sea containers. Our global network processes these large volumes of shipments, ensuring smooth passage across international borders. Speed is a core focus in our operations, as it not only allows us to satisfy our customers but also paves the way for handling larger quantities of shipments with better transitions.
The challenge falls on our customs teams around the world. In addition to adopting best practices, our clearing agents must be well-versed in customs regulations and HS Code changes so that our network can continue to benefit without worrying about customs uncertainties.
Whether you are importing or exporting, Badr International Shipping provides a comprehensive service covering all the fine details so you don’t have to worry.
To contact our customer service team for any assistance with your shipments, please reach out to us here.
