Adding HTS/HS Codes and Country of Origin to your products

HTS-HS Codes

When importing and exporting products you will be exposed to having invoices, proof of insurance, certificates of origin, and HTS/HS codes associated as well. Harmonized Tarrfi schedule (HTS) and Harmonized System (HS) codes are identifiers for each and every product. The codes help authorities to keep track of what goods are entering the country, it enforces the legality of the products, their import taxation, and regulation.

What are HTS/HS codes?

The Harmonized System (HS) classification system was created by World Customs Organization (WCO) in 1952. The purpose of its creation was to make it simpler to identify and track goods globally for import/export. When importing products, it is a requirement to include the HS code with the documentation. If the HS code is not there, delays at the customs office can also occur and may increase additional taxes for the receiver. The HS code is a six-digit combination that represents different product attributes.

  • First two digits: This is the product category, like textiles or electronics.
  • Middle two digits: The Sub-category of the product, like Shirts or Shoes.
  • Last 2 digits: The product's material, such as Cotton or Leather.

These codes are not unique to the product, they are meant to be descriptive of the product. The HTS code incorporates the HS code, and adds 4 more digits for 2 more classifications - they vary from country to country:

  • First additional 2 digits: Subheading Trarrif Heading lines establish duty rates, specific to the USA.
  • Second additional 2 digits: Statistical Suffix - which collects trade data, and is specific to the USA.

What is the country of Origin data?

To determine how the products are processed, the origin of the product must be determined. This is done through the product classification of the HTS/HS code. Much depends on the country of origin, where some if not all the following rules apply:

  • Free trade agreements between countries
  • Import quotas being applied between countries
  • Base duty rates being applied to the imports

If the country of origin data is missing from the shipment, it will incur delays and increased taxes/fines to the recipient of the item. Packaging slips with product descriptions, pricing, and the harmonized system code must be present for customs officers to charge the recipient the correct amount of import duties and taxes.

Adding HTS/HS to your products

Depending on the eCommerce platform that you are using, within the product sections, there are fields that may or may not accommodate entering the HTS/HS. In WooCommerce you can enter the full HTS/HS as a 10-digit code through custom attributes, while Shopify has the 6-digit HS number being accommodated. BigCommerce does not have a dedicated field for the HTS/HS. Additionally, for reporting and HTS search, or HS code lookup of your products, the API might be a better route in doing your report. HTS/HS codes and country of origin information must be present with the packing slip of the product. These are vital for customs to process international shipments. Customs use the HTS/HS to verify if the business has filled out their paperwork correctly, and might audit the package - they use the description and coding system to inspect and ensure that the items are correct, and duties/taxes were applied correctly as well. This is done through the harmonized tariff schedule of the HTS/HS and it is important for the end-user to understand the implications of their orders and how this is applied. All products are no exception, ranging from Coffee/Tea to high-end electronics.

Conclusion

You can chalk it up to bureaucracy, and paperwork that makes your business use up more resources, however, if it is all entered into the product that will be half of the work done. If your eCommerce system then also prints a summary of HTS/HS in the package being shipped, then the customs agents can quickly see what the contents are, and verify that the appropriate duties and taxes are applied. Moreover, there are product restrictions that require customers to have licenses for (such as firearms licenses in the UK) and must have support just to have the items in possession of a business or individual. Even if they are accessories to items listed in a license, it is being questioned by the customs agents. Therefore the transparency of the package must be clear at the arrival of the inbound country. Lastly, businesses can obtain their HTS/HS from the manufacturers, and if your product, you have to create the right classification for your items. This reduces penalty liabilities in your international exports and keeps a good customer experience with the shipments of your products. Feel free to reach out to us at wish@thegenielab.com


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