HS/HTS codes

HS/HTS codes, also known as Harmonized System (HS) or Harmonized Tariff Schedule (HTS) codes, are a system of standardized international nomenclature used to classify goods for trade. 

 

What are HS Codes?

HS codes consist of six-digit numbers corresponding to thousands of individual items and categories. They allow organizations and countries to accurately identify different types of products for import, export, tariff assessment, and other purposes. Currently, this system is in use in more than 200 countries worldwide.

For example, HS code 8421.31 is used to identify “Intake air filters for internal combustion engines,” while HS code 8536.50 is used to identify “switches.”

 

What are HTS Codes?

Many countries, including the United States, expand the six-digit HS codes into much more detailed ten-digit codes, also known as HTS codes, in order to provide a much more detailed classification, especially for import purposes. 

For example, HS Code 4820.10 refers to the general category for stationery items (Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries, and similar articles).

HTS codes go a step further in the classification of goods:

  • HTS Code 4820.10.20: This narrows down to diaries, notebooks, and similar bound items.
  • HTS Code 4820.10.20.10: Further specificity to diaries and address books.
  • HTS Code 4820.10.20.20: This code is for memorandum pads, letter pads, and similar articles.

The World Customs Organization (WCO) develops and maintains the HS codes, while individual countries adapt these into their own HTS codes for more specific national needs.

 

What are Schedule B Codes?

Schedule B codes are specific to US exports and somewhat similar to HTS codes used to categorize imports. Schedule B codes are based on the HS codes (the first six numbers) but are tailored for US export regulations and are maintained by the US Census Bureau.

Here are the details:

  • Usage: Only used by exporters in the United States.
  • Purpose: Schedule B numbers classify exported goods for tracking and statistical purposes.
  • Format: They are 10-digit codes, similar in structure to HTS codes.

 

What are the Differences Between HS, HTS, and Schedule B Codes?

HTS and Schedule B Codes are both US standard classification systems used for international trade. HTS Codes are intended for imports into the United States, while Schedule B Codes are reserved for US exports. Both systems are based on the Harmonized System (HS), an international product classification standard that is managed by the World Customs Organization (WCO).

HTS Codes are used to determine tariff rates and import regulations. The first six digits of an HTS Code are the same for all countries that use the HS. The United States adds four more digits to the HTS Code to further classify products.

Schedule B Codes are used to report exports to the US Census Bureau. The first six digits of a Schedule B Code are the same as the first six digits of the HTS Code. The US Census Bureau adds four more digits to the Schedule B Code to further classify products.

The following table summarizes the key differences between HS, HTS, and Schedule B Codes:

HS Codes HTS Codes  Schedule B Codes
Number of Digits  6 10 10
Administered by World Customs Organization (WCO) U.S. International Trade Commission (ITC) U.S. Census Bureau
Purpose Classification of products for international trade, facilitating the exchange of goods and services across borders. Determining tariff rates and import regulations in the United States, ensuring fair trade practices, and protecting domestic industries. Reporting exports from the United States, facilitating trade data collection and analysis, and ensuring compliance with export regulations.

 

Frequently Asked Questions Regarding HS/HTS Codes

 

What is the Main Function of HS Codes?

HS Codes, or Harmonized System Codes, are the cornerstone of international trade, providing a standardized language for classifying traded goods. By establishing a common global nomenclature, HS Codes facilitate seamless communication and collaboration among customs authorities, governments, and businesses worldwide. This fosters transparency, harmonizes trade practices, and streamlines the movement of goods across borders.

 

How Does HS Code Classification Work? Deciphering the Numbers and Structure

The HS code is structured logically and hierarchically, with the titles for Sections and Chapters defining general product categories, whereas headings and subheadings offer more detailed descriptions of the items. 

HS codes are categorized into 21 sections according to materials or economic activity, for instance, animal products or machinery. These sections are divided into 96 chapters and further split into 1,228 headings and 5,612 subheadings. 

Please note that sections are not included in the HS code, which begins with the chapter number.

HS codes are arranged in the following way:

  • First Two Digits: Indicate the chapter.
  • Middle Two Digits: Represent the heading.
  • Last Two Digits: Define the subheading.

The Harmonized System (HS) Code, for instance, HS code 6103.10, which represents “men’s or boys’ suits,” is composed of the following elements:

  • First Two Digits (Chapter): Indicate the broad category. For example, ’61’ refers to “Articles of apparel and clothing accessories, knitted or crocheted.”
  • Middle Two Digits (Heading): Define a specific category within the chapter. In this case, ’03’ pertains to “Men’s or boys’ suits, ensembles, jackets, blazers, trousers, etc.”
  • Last Two or Four Digits (Subheading): Provide detailed information about the product. For instance, ’10’ could specify a particular type of men’s or boys’ suits.

Each level (chapter, heading, subheading) refines the classification for customs and trade purposes, standardizing the system internationally.

 

How Often Are the HS Codes Updated?

HS codes, the global standard for product classification in international trade, undergo updates every five years and are overseen by the World Customs Organization (WCO). This schedule allows the system to integrate new commodities and capture technological advancements, ensuring the classification system reflects contemporary trade practices. 

The process of updating the codes takes time and effort. It involves proposals from member countries, discussions, and revisions that address global trade developments’ nuances. These updates are necessary for keeping the classification system relevant and effective for customs authorities, merchants, analysts, and other interested parties across the world.

 

How Do I Find the HS Code for a Product?

To find the exact HS code for your product, you can use the Harmonized System tool presented by the World Customs Organization (WCO). To find the proper HS code, simply search for the product using the search bar.

 

How Do I Find the HTS Code for a Product?

To find the proper HTS code (as well as the HS code), you can simply visit the HTS directory tool provided by the US International Trade Commission (ITC). Describe your product in the search box and hit the search button. In addition, you can search the Customs Rulings Online Search System (CROSS) to find binding rulings on which HTS codes represent which products.

 

Where Can I Find the Schedule B Code for My Product?

The Census Bureau provides a free online tool for Schedule B search. Additionally, the Customs Rulings Online Search System (CROSS) can be consulted for products that are challenging to classify.

 

What is the History of the Harmonized System (HS)?

The Harmonized System (HS) emerged from a necessity for consistent trade classification. Prior to its establishment, countries operated with their own systems, causing inefficiencies. The World Customs Organization (WCO), initially named the Customs Co-operation Council, was established in 1952 to address these challenges. Over the years, the WCO worked on creating a standardized nomenclature, which materialized as the HS and was adopted in 1988. The system has since been updated to keep pace with the evolving nature of international trade, ensuring a common language for goods and facilitating smoother transactions across borders. This system is pivotal for modern trade, providing a structured method to categorize goods globally.

 

How Do You Decipher Your Product’s HTS and Schedule B Code?

In order to decipher an HTS code, you can use the directory provided by the US International Trade Commission (ITC). Simply enter the HTS code in the search box to find the results for your HTS code.

If you are interested in deciphering your Schedule B code, you can do so by visiting the Schedule B code search tool provided by the US Census Bureau on their website.

The Customs Rulings Online Search System  (CROSS) is a valuable tool for products posing classification challenges. The database contains legally binding rulings regarding other exporters’ and importers’ Schedule B code inquiries.

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