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A Quick Look at the Harmonized System

The world of international trade can be a complicated one, and that is probably why the World Customs Organization (WCO) developed something called the Harmonized System (HS). Also known as the Harmonized Tariff Schedule (HTS), this system classifies (defines) those goods which are most commonly traded and distributed internationally.  For the most part, these goods can all be assigned their own Clearit hs codes which correspond within the Harmonized Tariff Schedule of the importing country (but the codes are assigned before export).

The Difference Between HS Codes and HTS Codes

Though they are quite similar, there is a definite difference between HS Codes and HTS codes.  Fortunately, this difference is quite simple:  how many digits are in the code?  If it has six digits it is a universal standard HS code.  If it has at least 7 digits (up to 10 digits) then it is an HTS code. Furthermore, the 7th number in an HTS code designates the individual country of import.

Here is an example:  In a US HTS code the first two numbers is known as the “chapter”.  The chapter is the product type.  The second two numbers is known as the heading. The heading adds more product classification (like another adjective). The third two numbers is yet another classifier.  These six numbers, then, is the HS code. The seventh number is the code for the country of import; and more subheadings can be added after this if the code needs more classification.

 Lets take a look at an HTS code: 0901.21.0010

The first pair: 09 is the goods chapter for coffee and tea

The second pair: 01 classifies the coffee as roasted (not still or in husks/skins)

The third pair: 21 classifies the coffee as regular (not decaffeinated)

The fourth pair:  00 means the coffee has no additional duties

The fifth (final) pair:  10 is a statistical suffix classifying the coffee as certified organic

WHY HS/HTS CODES ARE IMPORTANT?

HS/HTS Codes are important, of course, for a few simple reasons.  Primarily, you need these codes because they inform what tariffs or duties you might need to pay on the product that is being traded internationally.  In addition, though, the codes are also a way to track international trade data collected throughout 200 countries around the world.  These codes help determine things like weight, quantity, value, and many other variables in the United States and Canada.

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