HS & HTS Codes
If you’re going to import or export, you absolutely must understand the Harmonized System (HS) and Harmonized Tariff Schedule (HTS), and HS Codes, Schedule B and some other classification terms.
When you don’t comprehend and properly apply proper product classifications for international shipping, you can face legal penalties which, if you’re not prepared, can sink your business. You can also have your goods seized, defeating the very purpose of your business.
What Is The International Harmonized System (HS)?
The HS is an internationally accepted system of names and numbers used to classify traded products. It was developed in 1988 and continues to be maintained by the World Customs Organization, which is an independent intergovernmental body.
The World Customs Administration, administers a commodity-classification system that is called the International Harmonized System (HS): the code is used by all countries globally to classify all imported and exported goods.
When you are looking to ship a product overseas, it is a legal requirement that you have a six digit HS code. This doesn’t change whether you are shipping t-shirts or cars, every product must be assigned the HS code.
The code is split into three groups of two, in what some refer to as the HS Code List:
The first two categorize the product, the second two define this classification further and the final set is to specify the product in more detail.
For instance, the first two digits may say that your product is clothing; the second two might say it is trousers and the final two might say it is men’s blue trousers.
Adding Further Description: Schedule B and GHS
This system can be further enhanced depending on the country that is importing or exporting the good.
In the US, products are assigned an additional four digit code, known as the Schedule B number, to classify them further. This four digit code is added to the end of the HS code to make a 10 digit code.
Schedule B numbers are used and administered by the US Commerce Department, Census Bureau, Foreign Trade Division. The data they collect is then used to publish US export statistics.
To check what your Schedule B number is, you can use an HS Code Finder, like this free online search tool. Alternatively you can speak to a fulfillment provider who should be able to provide you with the relevant information.
In addition, in the US, when you are shipping consignments that are valued over $2,500 or the item is required to have a license, then you need to report the schedule B number to the Automated Export System.
Furthermore there is an additional requirement for the shipment of chemical that runs in parallel to the GS system. It’s called the Globally Harmonized System of Classification and Labelling of Chemicals (GHS).