What is an HS code? When can you change HS codes?

Mike Court, International Trade Compliance Specialist looks at a common export query concerning HS codes…

Recently I was asked a question by one of the companies we advise on international trade matters:

An overseas client has asked us to put a different customs tariff code on our documentation. Should we do this?

Background:

Most countries in the world are now members of the World Customs Organisation (WCO) and they use the Harmonized System (HS) of tariff classification.  Every single product type has a separate code, one that allows customs to raise or reduce duty paid on the entry of goods to another country. Typically, there are 8 or 10 numbers to a code, but it is only harmonised to the first 6 digit level. Therefore, there could be minor differences after the 6th digit caused by local national variations.

To be compliant, a company should include the UK Tariff code on all documents.  This enables UK export statistics to be captured correctly when goods pass the border. 

Mike’s advice:

If your client wants you to quote a completely different tariff code you should be treat this request with extreme caution, as it may be a sign that the client wishes to mis-declare goods to customs in their country, possibly to pay a lower rate of duty. If you suspect that this is the case, you should decline as you may be considered to be complicit in a criminal act.

However, there are some occasions where, despite the HS, different countries’ customs authorities may disagree on the correct classification for a product, and the client may be a victim of this. While this may be perfectly innocent, it should still be treated with caution, and only go ahead after careful checking, and only if the client can provide external evidence to prove this. 

When a buyer submits an import customs entry after the goods arrive at the destination, it is their responsibility, not yours, to declare the goods correctly and accurately in the destination country, using the correct tariff code for that country. If supplier is not happy to include a revised tariff code on the commercial invoice, the buyer can provide other evidence to their countries customs to substantiate whatever code they wish to use. 

It is important that all tariff codes that are mentioned on the invoice are clearly indicated with their nationality (i.e. UK tariff code).  This will ensure that a forwarder or customs agent does not use a UK code for a US customs entry, or vice versa. If you do decide to include a US code on an invoice (as in the first example above), we would recommend that the UK code is also included, with both codes clearly identified. 

If you do decide to include a US tariff code on an invoice, it is a good idea to make it clear to the consignee that you are including this information at their specific request, and that you take no responsibility for the accuracy of the information. You should definitely keep a record of the correspondence.

You can look up your HS codes using the gov.uk portal HERE

Mike Court advises businesses in all aspects of export trade compliance. Get in touch today to find out how a compliance package from International Trade Matters could help your export business to succeed.

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