Harmonized System

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Harmonized System

• By
• Ree Russell
• US Commercial Service

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What is the HS number?

• A Harmonized System is used because Customs
  officials worldwide dont speak the same
  language.
  
• With everyone using the same songbook, we can
  watch the flow of goods in and out of countries.

• Its like a Social Security Number, uniquely
  explains your product. Helps others who are not
  familiar with your product.
  
• HS is a Product Classification.

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Classifying your Product

• Classify your good on WHAT IT IS, not on its end
  use, nor its destination (like Mexico or
  Malaysia.)
  
• Example A bolt by itself may be a part of a
  machine, but it is first and foremost a bolt, and
  it should be classified as such.
  
• Example Grass seed and fertilizer mix. Classify
  the mixture as being primarily grass seed, if it
  is.
  

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Harmonized System

• The World HS number is 6 digits long
• US schedule B number is 10 digits long
• The whole world only recognizes the first 6
  digits (everybody has the same songbook)
  
• THE MORE NUMBERS,
• THE MORE DESCRIPTIVE

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HS Sections are usually arranged in order of
degree of manufacture

• Section 1 Raw material, a cow
• Section 2 Semi manufactured, such as rawhide
• Section 3 Finished product, like a handbag or
  leather shoes

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What is the HS number?

• Chapter 82
• Tools, Implements, Cutlery, Spoons and Forks, of
  Base Metal
  
• Heading 8208 Knives and cutting blades
• Subheadings 820810 for Metalworking
• 820820 for Woodworking 820830 for Food Industry
  Machines
  
• 820840 for Agricultural, Forestry Machines
  includes a LAWNMOWER BLADE)
  

• The world recognizes the first six digits.
• Notice the US does not further define this
  particular Lawnmower Blade,as the US last four 4
  digits are zeroes.
  
• US Schedule B Number
• 8208400000

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Where to find the HS code

• The Harmonized Tariff Schedule of the US is
  online, but can be purchased at the government
  bookstore
  
• U.S. Department of Commerce Schedule B
  Classification of Exports
  
• CALL your US Commercial Service/Export Assistance
  Center
  
• 704 333 4886 or- our sister agency the U.S.
  Census Bureau
  
• Durable Goods (Chapters 1-71) [phone]
• Non-Durable Goods (Chapters 72-97) (301)
  763-3484
  
• Don't know [phone]
• Census On-line www.census.gov/foreign-trade
• - choose Schedule B Search Engine from tool bar
• - or select Search and type in a key word(s) in
  capital letters
  
• Remember the US-specific number Schedule B is 10
  digits long the first 6 digits is a world
  recognized HS number
  

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The Classification Challenge

• Lets look for classifying a Generator
• Suggested because of the market potential for
  countries that are logistically close to North
  Carolina exporters!
  
• And the product is in Demand in the Caribbean,
  CAFTA countries, and African countries! Thank
  you, Electricity!

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Select 2 Numbers At A Time

• Find your Chapter
• Chapter 1 (Live Animals) to
• Chapter 98 (Special Classifications)
• Chapter 85 is Electrical Machinery and Equipment
  and Parts Thereof
  

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Select the Chapter Heading

• Next 2 numbers is the Chapter Heading.
• Chapter Heading 8501 is Electric motors and
  generators
  
• Look around or further to the 4-digit codes
  ONLY in this area
  
• 8502 - Electric generating sets and rotary
  converters
  
• 8503 - Parts suitable for use solely or
  principally with Machines in 8501 or 8502
  
• 8504 - Transformers

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Proceed to Add Another 2 numbers

• 8501.10 - Motors with a certain wattage output
• 8501.21 Universal AC/DC Motors
• 8501.31 Other DC Motors and DC Generators
  not exceeding 750 W
  
• 8501.32 - Other DC Motors and DC Generators
  of output 750 W but not exceeding 75 kW

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Stay on Track by just Adding 2 numbers at a time.

• 8501.33 - Generators exceeding 75 kW
• (which is 100 hp) but not
  exceeding 375 kW
  
• 8501.34 - Generators exceeding 375 kW
• 8501.40 - Other AC Motors

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If you see .0000 at the end, try to focus on
the 5th and 6th digits only

• HS Code 8501.32 refers to DC Generators of an
  output of 750 W but not exceeding 75 kW just
  like the Generator in the Lowes catalog page
  (see handout)

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Final 7th, 8th, 9th, 10th s

• Represent the HS Statistical Subdivisions
• Full 10 digits (sometimes these last four Final
  numbers are just 0s!
  
• The Statistics can be very Specific
• or still rather Vague!

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HS 4 10 digit Sched B

• So.
• We have a medium output Generator (a full 10
  digits and even more descriptive)
  
• 8501.32.6000 -- the U.Ss Schedule B!

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If youre still awake GRI Explanatory Notes

• Found at the US Customs website, the Explanatory
  Notes go into greater detail concerning General
  Rules of Interpretation.
  
• Go to www.customs.ustreas.gov
• Select Trade
• On the right hand side, select Harmonized Tariff
  Schedule
  
• On right, select Current HTSA Edition by chapter
• Select General Notes, General Rules of
  Interpretation, General Statistical Notes
  
• Click General Rules of Interpretation
• Scroll through to your product area

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General Rules of Interpretation

• Found in the beginning of the Harmonized Tariff
  Schedule, GRIs lay the ground work for Product
  Classification overall, including systems, sets,
  mixtures and composites, repetitive uses, etc.
• If in doubt, call us your Charlotte US
  Commercial Service [phone]. We interface
  w/our sister Census Bureau or US Customs
  (Treasury/Customs Border Protection) agencies
  on your behalf.

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Containers and Cases General Rules of
Interpretation

• If a container is suitable for repetitive use, it
  must be classified on its own.
  
• Example If you are exporting propane in a tank
  to Canada, you actually have to classify the
  propane in its own classification and the tank in
  its classification, because the tank itself is
  reusable in Canada.

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Containers and CasesGeneral Rules of
Interpretation

• Full cartons of eggs are classified under eggs,
  040700. Without the eggs, the carton is made of
  paperboard, 482370.
  
• A can of Coke falls under beverage, 220210.
• A violin case without the violin is HS 4202xx,
  but if shipped with the violin inside, it is HS
  920210, a stringed musical instrument.

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General Rules of Interpretation

• GRIs form part of the Customs Tariff legislation
  and have been designed to
  
• ensure uniformity
• in classification decisions
• GRIs are essential for classifying.

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Harmonized System

• HS numbers are drivers of the import duties
  that foreign importers pay for your product.
  
• Foreign Customs authorities determine what your
  product is by the numerical product code the
  Ninja Turtle!
  
• HS numbers also determine US export statistics
  you can watch product flows in and out of
  countries. CAN BE great for Marketing Managers,
  but not always!

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Finding Export Statistics

• After determining your HS code, the US Department
  of Commerce can help you tap into the export
  statistics by country market.

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• Make
• then let us know about your
• EXPORT SUCCESS
• Thank You!