The World Customs Organization (WCO) ninjas need to update the old data with newly classified items and existing product modifications. To make these changes, the WCO undergoes a formal process - updating everything so it fits snugly like a jigsaw piece.
The logistics industry is complex, with many businesses, carriers, suppliers, processes, and regulations working together to keep global supply chains efficient. This complexity can often lead to unhappy customers and unprofitable businesses.
Every year, $19 trillion worth of goods are traded internationally--an enormity facilitated by the HS (Harmonized System) code. This system creates classifications and organizes these trades so that businesses can keep track of their merchandise easily.
Let’s dig deeper.
Amongst all the industry classification systems, Harmonised System (HS) Codes are usually used for goods during exporting. The Harmonised System (HS) is an internationally followed way of classification for traded products. This system uses numbers to label goods which then allows customs officials to easily identify the product, determine the import taxes, as well as collect trade data.
As its name suggests, the International Organization for Standardization's (ISO) main purpose is to identify global standards. With so many things moving across borders, it's essential to be able to tell them apart and ensure compatibility. By accurately placing tariffs on products, customs officials can prevent excessive expenses and keep the trade process running smoothly.
The HS code system was established in the 1980s by the World Customs Organisation (WCO) in order to classify goods on a global scale. The codes are updated twice yearly, with a more significant review every five years to take into account new technologies and trends. 211 countries – including the EU - use this system.
The World Customs Organization (WCO) reviews the Harmonized Commodity Description and Coding System every five years. Also known as just the Harmonized System(HS), these HS codes are what tariffs for more than 200 economies and countries worldwide are based off of.
The WCO constantly analyses HS numbers to make sure they are up-to-date with changes in technology, gives new insight into different types of products, and reflects on any international issues as they develop.
HS 2022, which went into effect on 1st January 2022, is the seventh edition. In 2017, the WCO adopted 351 sets of amendments over a 3-year period to guarantee higher standards for an extensive variety of products and product categories.
The HS code is a six-digit identifier used to represent a particular good being imported or exported. This coding system consists of three parts: Chapter, Heading, and Sub-heading, which work together to describe the good in question.
The HS code is a combination of different aspects, in this instance, it's 7009.10. If a sub-heading isn't important, then 00 will be the last two digits.
The system will be updated in 2022. What does that mean for you and your business?
HS numbers are undergoing a version update on 1st January 2022, to HS 2022 classification. In this article, we will go over the changes and how exporters can remain updated on classifying their products.
The World Customs Organization is set to release HS 2022, which will include 351 amendments to the Harmonized System. These changes will affect a multitude of commodities that are shipped internationally. The primary objectives of the HS 2022 amendments are to adjust to current trade by adding new product categories and addressing global environmental and social issues.
By misclassifying your products, you run the risk of committing fraud and being subjected to fines. You may also be placed on a watchlist, which would make it more difficult to ship goods internationally in the future.
To avoid any potential issues, it's essential to keep up-to-date with the latest HS code changes and ensure that your products are correctly classified. You can do this by subscribing to a classification service or working with a customs broker who will have the most current information.
If you don't update your codes, you could be subject to penalties, including:
It's essential to stay up-to-date with the latest HS code changes to avoid any potential issues. You can do this by subscribing to a classification service or working with a customs broker who will have the most current information.
HS numbers are essential for global trade and need to be included in all export documentation. The HS system is periodically updated to reflect changes in product classification or nomenclature, so it's important to stay current on updates. There are a number of resources available to help you review and update your HS codes as needed.