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What Is a Commodity Code (HS Code)? | Speed Commerce

What Is a Commodity Code (HS Code)?

3PL Glossary > Commodity Code (HS Code)

What Is a Commodity Code (HS Code)?

A commodity code, also known as the Harmonized System (HS) Code, is an internationally standardized code system used to classify and identify traded products in international commerce. The Harmonized System was developed by the World Customs Organization (WCO) to facilitate the uniform classification of goods for customs purposes and to enhance international trade by streamlining the documentation and customs processes across different countries. The system assigns a unique code to each type of product, providing a standardized and universally accepted method for categorizing goods.

What Are Examples of HS Codes?

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The commodity code or HS Code typically consists of six to ten digits, with each digit representing a specific level of classification. The first six digits are standardized across all countries that use the HS Code, ensuring consistency in the classification of goods globally. Countries may add additional digits to create more detailed subcategories that align with their specific customs and tariff requirements. The HS code covers a wide range of products, including raw materials, manufactured goods, and commodities, and is used by customs authorities, importers, exporters, and other stakeholders involved in international trade.

The HS Code serves several purposes, including facilitating the efficient movement of goods across borders, providing a basis for customs duties and tariffs, and assisting in the compilation of international trade statistics. It also helps customs authorities accurately assess the duties and taxes applicable to imported and exported goods, ensuring compliance with trade regulations and agreements. Businesses involved in international trade need to accurately determine and declare the HS Code for their products to comply with customs regulations and facilitate the smooth flow of goods across borders.

FAQs

Yes and no. The first six digits of the HS Code are standardized globally, ensuring uniformity in classification. However, countries may add additional digits to create more detailed subcategories based on their specific customs and tariff requirements.

Yes. While the first six digits of the HS Code are harmonized globally, countries may introduce additional digits for more detailed classification. As a result, the same product may have different codes in different countries, reflecting variations in classification requirements.

Yes. Many countries provide online databases or tools that businesses can use to search for and find the correct HS Code for their products. These resources help ensure accurate classification and facilitate compliance with customs regulations.

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