The Harmonized Coding System and Commodity description is generally referred to as the HS. Developed by the World Customs Organization, this is an international product nomenclature that can be used for various purposes, with the most common use being to describe the different types of commodities being shipped overseas.
In general, in order to export or import a product internationally, the goods need to be assigned an HTS code which corresponds with the HTS of the country importing the goods.
The HTS code may also be referred to as an HS code, but the difference between the two lies in the number of digits within the code. An HTS code is determined by individual importing countries and it’s unique after the sixth digit. On the other hand, the HS code consists of 6 digits and it’s a universal standard.
Why the HS and HTS codes matter so much
The codes are very important not only due to the fact that they directly influence the duty rate or tariff of the traded good, but they also help with keeping a record of the international trade stats which are used in almost two hundred countries. For instance, these codes are used by the US Census in order to determine the weights, countries traded, quantities and value (among other factors) of each product that’s being exported and imported by the US.
Breaking down the HTS code
Each character in the HTS code represents a specific nomenclature. The first 2 characters in the code represent the chapter’s name, while the next 2 characters represent the chapter’s section and the next 2 characters represent the sub-section.
Let’s make this easier by providing you with a clear example: if an item carries an HTS code that goes like this ADB12354, then AD represents the chapter’s name, B1 represents the chapter’s section (AD) 23 represents the sub section of B1 and 54 is 23’s subsection.
Therefore, if you’re planning to import goods into the United States, the Schedule B number needs to be clearly written on the Shipper’s Export Declaration and the package as well. A Schedule B number consists of a six digit HS code and an extra four digit code that’s used to further classify the items being imported or exported.
It’s very important that each item is classified properly and that the importer has all the documents required to import the goods. Otherwise, the shipment may be refused by the customs officers.