Harmonized System (HS) Codes
Harmonized System (HS) Codes
Among industry classification systems, Harmonized System (HS) Codes are commonly used throughout the export process for goods. The Harmonized System is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.
The HS is administrated by the World Customs Organization (WCO) and is updated every five years. It serves as the foundation for the import and export classification systems used in the United States and by many trading partners.
The HS assigns specific six-digit codes for varying classifications and commodities. Countries are allowed to add longer codes to the first six digits for further classification.
The United States uses a 10-digit code to classify products for export, known as a Schedule B number, with the first six digits being the HS number. There is a Schedule B number for every physical product, from paper clips to airplanes. The Schedule B is administered by the U.S. Census Bureau’s Foreign Trade Division.
How You Use the HS Code
You will need both the U.S. Schedule B number and the foreign country’s version of the HS code for your product during the export process. You use it to:
- Classify physical goods for shipment to a foreign country;
- Report shipments in the Automated Export System (AES) when the value is more than $2,500, or the item requires a license.
- Complete required shipping documentation such as shipper’s letter of instructions, commercial invoice or certificate of origin;
- Determine import tariff (duty) rates and figure out if a product qualifies for a preferential tariff under a free trade agreement;
- Conduct market research and obtain trade statistics;
- Comply with U.S. law, where applicable.
How to Identify Your Product’s (U.S.) Schedule B Code
The Census Bureau offers a free, widely used online Schedule B search tool that can help you classify your products. The Schedule B search tool is the most commonly used method for classifying products. The site provides training resources to help you better identify for your Schedule B number, as well as contact information for assistance.
If your product is difficult to classify, the Customs Rulings Online Search System (CROSS) database can help you find its Schedule B code. CROSS contains official, legally binding rulings from other exporters’ and importers’ requests for Schedule B codes. Use this database to determine whether other exporters or importers requested a ruling on the same or a similar product and, if so, what that ruling was.
- Shipping multiple items as a set: For the most part, determining a product’s Schedule B code is straightforward. For example, an unassembled bicycle that is sold in a box containing the bicycle frame, handlebars, pedals, and seat is classified as a bicycle (because the item is sold as one unit) and not as several different components. Some sets, however, are harder to classify. Rule 3 of the General Rules of Interpretation (GRI) of the Harmonized Tariff Schedule addresses composite goods, mixtures, and items that are sold in a set. The GRI has established a three-step process for determining the Schedule B code in such situations; the introduction to the official Schedule B publication contains the relevant passage.
- Textiles/Apparel shipped as a set: The rules that govern Schedule B codes for textiles and apparel sets are unique. Refer to GRI Chapter 50, Note 14 for more information.
How to Identify Your Product’s Foreign HS Code
To determine what the HS Code for your product is in another country, you can use a lookup tool in a foreign tariff database, such as the Customs Info Database.