HOW TO UNDERSTAND CUSTOMS CLASSIFICATION IN 5 QUESTIONS
The Harmonized System of Customs Classification is an international system of classification of goods. It is used as a basis for customs tariffs and for the collection of trade statistics. It is used in over 200 countries and is maintained and managed by the World Customs Organization.
1 – WHAT IS CUSTOMS CLASSIFICATION?
To ensure compliance and optimize the amount of their customs duties, international trade actors must master their customs classification. Classifying goods is a job that requires knowledge of the fundamentals, skills and know-how.
All goods that cross borders must be subject to a customs declaration. The customs classification is essential for any import or export. This classification code is used to establish the percentage of customs duties applicable to the import of a product.
2 – HOW IS IT ORGANIZED?
A 10-digit number identifies the customs tariff to be filled in during the declaration:
- The first 6 digits of the nomenclature represent the position of the Harmonized System, framed by the World Customs Organization. The Harmonized System is used for the coding of goods on a worldwide scale.
- The 8-digit code, also known as the Combined Nomenclature, was introduced by the European Union. This Combined Nomenclature determines, among other things, the customs duties on imports into the EU and allows the compilation of international trade statistics.
- The 10-digit code indicates the integrated tariff of the European Communities. The 2 digits added to the combined nomenclature (8 digits) determine the European customs and trade regulations (tariff suspensions and preferences or anti-dumping duties) for imports into the European Union.
3 – HOW TO DETERMINE THE CUSTOMS CODE OF A PRODUCT?
First of all, it is necessary to correctly identify your merchandise and then to consult the nomenclature, the denominations and to apply the rules and notes.
For a large number of goods listed by name, the most experienced declarant will be able to determine, more or less quickly, the positioning of the goods.
For the others, it can be more complicated: he can then call upon a consultant, a customs broker or a customs classification tool such as the Customs Bridge solution.
4 – WHAT IS A RISK OF INCORRECT CLASSIFICATION?
It depends on the stakes, the amounts of unpaid duties, the nature of the obligations not respected, the circumstances or the conditions of the offenses. Customs sanctions are graduated and most often result in fines and the payment of duties due to regularize the operation.
In the most serious cases, the goods may, in addition to the fines, be abandoned or confiscated for destruction. In rare cases, the operators concerned may also be sentenced to imprisonment, be banned from practicing, etc. They may also lose their status as traders. They may also lose their Authorized Economic Operator status.
5 – HOW CAN I FIND OUT THE MEASUREMENT ASSOCIATED TO MY PRODUCT?
The applicable measures are mentioned in relation to the positioning in the tariff. They are decided at different levels (EU or Member States). They are of a customs nature: the case of tariff quotas (including duty reductions…).
They also stem from other regulations such as standards: toys, medicines, machinery, petroleum products, etc. Non-compliance can be detrimental to operators, especially in cases involving health, consumer protection ..
