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HS Code: what is harmonized code and what is it for?
HS Code: a universal language, known almost worldwide, is a key element for importing and exporting any type of goods.
illustration of Daniele Morganti
If you sell abroad or are planning to do so, or even if you are going to start managing your shipping starting from scratch and are trying to get oriented, you’ll soon learn to communicate using this string of numbers that describe every product that goes through customs.
This code’s purpose is to establish a shared, universal nomenclature. Here we’ll take a closer look at what it’s about, learn how to find it, how to use it and how to understand the information it contains.
Why do goods need to be classified?
Try to imagine the number of goods that goes through customs daily. Also imagine the amount of different countries they come from and the fact that everything that goes through it every day has to be recognized, catalogued, registered and approved for transit, including using documents like the customs bill, to allow free trade between countries.
It is immediately obvious that a shared method is needed to manage such a complex system and let goods circulate globally. This system already exists and is called HS (Harmonized System) code.
The HS code, also known as a commodity code, lets you quickly identify and catalogue all types of goods that enter and leave national borders, most importantly without making mistakes.
The World Customs Organization is the international body responsible for managing this complex import-export mechanism. It secures goods that transit from one country to another, supervises the rights of those who sell them, combats illegal activity and smuggling in order to defend the right to a free market.
Right now, 170 countries around the world, are part of the WCO.
Another fundamental instrument when it comes to international trade is the European Customs Union, which facilitates trade between European Union companies, harmonizes duties from non-EU countries and brings together the 27 countries of the European Union, treating them as a single commercial entity.
What is the Harmonized Code (HS Code)?
As we can easily imagine, there must be an HS Code for every marketable product, an HS code for live animals, for plant, mineral, agricultural and industrial products, a code for textiles, for toys, for art objects, and much more.
Once the goods are identified at customs, through the HS code, customs duties are applied.
By definition, the customs code is a numeric string, with 6 or 10 digits, which uniquely and commonly identifies a certain product internationally. The current convention codifies the goods through the HS Code.
As we will see in more detail below, the first 6 digits of the code describe the items’ international standard of harmonization, and digits from 7 to 10 are part of the nomenclature within the European Customs Union.
What is the HS code for?
The code, as we’ve said, is used to identify products to be traded entering or leaving a country. The HS Code also has other functions:
- to calculate the customs rate to be paid for shipping and receiving goods
- to apply other tax charges, such as VAT or border surcharges
- to find out whether restrictive measures apply to the products you are trading.
Through the HS standard code, companies around the world – including yours! — that want to sell abroad or import goods from other countries, can sell them knowing that the products are protected and that tax obligations have been met.
Another important aspect is the statistical data that the HS Code can help us find because it makes it easier to find out how many pieces of a single product have entered or left a single country in a single day, month or year.
These numbers are essential to calculate the entity, value and impact of a country‘s imports and exports, as well as to monitor consumer habits and changing trends over time.
These specifications give you a general overview, shared internationally, of the movement of goods worldwide. If you want to know the number of imports and exports where you would like to expand your market, you can find out by interpreting data available through the HS Code.
An example of an HS Code
To understand how the Harmonized Code is organized, it’s best to start from a practical example. Let’s say that you’re a maker of handmade wooden toys for children.
The reference code, according to the international standard, is 9503, which is for “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls; other toys; reduced-size “scale” recreational models, working or not; puzzles of all kinds.”
Another example of an HS code relevant to you would be:
- 9503003910 or “Electric trains, incl. tracks, signals and other accessories therefor; reduced-size “scale” model assembly kits” in the specific item that defines them as “wooden, handmade”. If they were made of another material, such as plastic, the item would be 9503003500,
And then there’s
- 9503005510 “Toy musical instruments and apparatus” under the “wooden, handmade” category.
And so forth.
As mentioned, the first 6 digits define the product’s harmonized classification shared between the countries part of the convention; the seventh to tenth digits describe the Combined Nomenclature and the TARIC Code, which are needed within the European Customs Union.
How the HS code changes from country to country
To date, more than 200 countries in the world have adopted the international Harmonized System Convention. As we said, the digits 7-10 are also needed to identify the goods that transit within the European Customs Union.
The final figures may change depending on the country to which you are exporting. This is why the HS code is not always the same. This means you should double-check it with the customer, partner or broker with whom you are trading.
HS Code table: Which products does it apply to?
The Harmonized System applies to all goods that can be bought and sold. You can find its classification in the table below.
|I||Live animals & animal products|
|III||Animal or vegetable fats and oils, etc.; prepared edible fats; animal or vegetable waxes|
|IV||Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes|
|VI||Products of chemical or related industries|
|VII||Plastics and articles thereof; rubber and articles thereof|
|VIII||Raw hides and skins, leather, furskins and articles thereof; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut|
|IX||Wood, wood charcoal and articles of wood; cork and articles of cork; articles of plaiting, of basketwork or of wickerwork|
|X||Pulp of wood or other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard|
|XI||Textiles and textile articles|
|XII||Footwear, headgear, umbrellas, sun umbrellas, walking sticks, seat-sticks, whips, riding-crops and parts thereof; prepared feathers and articles made therewith; artificial flowers; articles of human hair|
|XIII||Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware.|
|XIV||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewelry; coins.|
|XV||Base metals and articles of base metal|
|XVI||Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles.|
|XVII||Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof|
|XIX||Arms and ammunition, parts and accessories thereof|
|XX||Miscellaneous manufactured articles|
|XXI||Objects of art, collectors’ items or antiques|
Each category is associated with a numerical section item, in turn, is expressed in corresponding HS codes. This list is certain to include products you sell – or would like to sell – in your e-commerce business. We’ll see in a bit how to find the HS code corresponding to your relevant items.
On the UK Integrated Online Tariff, site you can access all the tariff information you need for free trade practices, including duties, national taxation, economic measures and the complete nomenclature.
How to find your goods’ HS code
The document about the international codes can be found on the AIDA website with a few simple steps:
- on the top right, click on “Nomenclatures”
- select “TARIC”.
At this point, you can choose whether
- to search by displaying the entire table, in which case you would choose “TARIC Index” and click on the code number corresponding to the product you are looking for. A page opens about that specific customs category with all the versions of the HS codes that apply to it.
- Search by keyword, choosing the “Search by words” option. Continuing the example given before, when you input “toy train”, the 9503 heading will appear: “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls; other toys; reduced-size “scale” recreational models, working or not; puzzles of all kinds.” By clicking on the code number, you will then find all the versions, including the one you are interested in.
As you can see, this document is organized into 21 sections divided into 99 chapters, for a total of over 5,000 types of goods. The nomenclature is regularly updated, which is why we suggest always checking the exact HS Code.
HS Code: What are its parts?
As we said, the harmonized code can be 6 or 10 digits. The first 6 digits are part of the international standard, and the next ones are part of the European Customs Union. Let’s take a closer look at this distinction.
The 6-digit HS code
The first 6 numbers of the code both identify the product in a unique, shared way and also describe the position it has within the nomenclature:
- digits 1 and 2 indicate the chapter
- digits 3 and 4 indicate the position within the chapter
- digit 5 is the subheading
- digit 6 is the subclassification
10-digit HS Code
The 10-digit HS Code has 4 more numbers. This is because:
- the seventh and eighth digits are the Combined Nomenclature which describes the tariff and statistical classifications of the European Customs Union, which consists of about 9,500 headings.
- the ninth and tenth digits refer to the TARIC – Community Integrated Tariff, which includes all the measures and tariffs to be applied to import/export goods of the European Union.
Examples of 10-digit codes are those we considered above for handmade wooden toys, whose string of numbers also includes Combined Nomenclature and TARIC.
Domestic and international shipments: Let isendu help
Now that you understand the importance of the HS Code, and we have seen together how to find it and apply it to goods, you can see easily that you’ll need it every time you set up an international shipment.
Whether you have already expanded your e-commerce business beyond your country, or whether internationalization is among your future projects, using this nomenclature correctly will be key.
Every time you need to ship a product, the HS Code will be sent to your chosen carrier and included in the data needed to generate the accompanying documentation, such as the waybill.
isendu is here to support you in managing national and international shipping. Our platform simplifies ordering and shipping processes, lets you automate your e-commerce shipments, grow your e-commerce business, and gives you valuable data and information for business intelligence.
Connecting all digital sales channels with carrier sites, isendu is an essential tool to save you a great deal of time, create value and grow your online store.