Classify Your product Before Exporting

Before you begin your market research or exporting venture, you need to determine the proper classification codes for your product and industry.

Also, it’s important to familiarize yourself with the different types of codes and identify your own as these will be required to ship good overseas and used to determine import tariffs.

Classification codes are numerical identification codes assigned to products and industries that are recognized nationally and internationally, depending on the code.

The Harmonized System (HS) is an international nomenclature for the classification of products published by the World Customs Organization (www.wcoomd.org). It allows participating countries to classify traded goods on a common basis for customs purposes.

At the international level, the HS nomenclature is a six-digit code system for classifying goods.

The HS comprises approximately 5,300 article/product descriptions that appear as headings and subheadings, arranged in 99 chapters, grouped in 21 sections that refer to specific product categories (animal products, vegetable products, mineral products, etc).

The six-digit structure can be broken down into three parts:

The first two digits (HS-2) identify the “chapter” the goods are classified in, e.g. 09 = Coffee, Tea, Maté and Spices; each “chapter” is then divided into “headings”, identified by the first four digits (HS-4) of the 6-digit code, e.g. 09.02 = Tea, whether or not flavoured; the six digits together (HS-6) are more specific and identify a “subheading” within its “heading”, e.g. 09.02.03 = Black fermented tea and partly fermented tea,… Up to the HS-6 digit level, all countries classify products in the same way (a few exceptions exist where some countries apply old versions of the HS nomenclature).

Beyond the six-digit level, the classification becomes national and countries are free to introduce national distinctions by adding more digits to make the HS classification of products even more specific. This greater level of specificity is referred to as the National Tariff Line (NTL) level and is used by countries to identify specific products to which a tariff is attributed. For instance, Canada adds another two digits to the HS nomenclature to classify its exports and imports in greater depth, e.g. the code 090230.10 is the code for black tea, packaged as tea bags.