How to choose the correct tariff item

International trade is an essential activity for the economic growth of countries, and for it to develop in a fair and orderly manner, it is necessary to establish rules and procedures that allow its correct implementation.

In this sense, one of the most important tools is the Harmonized Commodity Description and Coding System (HS) , which allows for the uniform identification of products traded between different countries.

However, choosing the correct tariff heading can be a complex process, and choosing the wrong classification can lead to violations and penalties.

This article will discuss the importance of selecting the correct tariff heading and provide some tips to avoid violations.

What is the Harmonized Commodity Description and Coding System? 

The Harmonized Commodity Description and Coding System (HS) is an eight-digit international nomenclature, developed by the World Customs Organization (WCO), used to identify goods traded worldwide.

The nomenclature is divided into 21 sections , which in turn are subdivided into chapters, headings and subheadings.

Each of the SA codes is associated with a detailed description of the product , which allows it to be uniquely identified.

HS Objective

The objective of the HS is to facilitate international trade, reduce costs and increase the efficiency of customs processes , through the standardization of tariff classification procedures.

The HS is used for setting tariffs, compiling trade statistics, applying trade defense measures, levying internal taxes, and formulating trade policies. 

The importance of correct tariff classification 

Correct tariff classification is essential for international trade. Selecting the correct tariff heading is important for several reasons: 

1. Tariff determination: The correct tariff classification determines the tariff that must be paid for the product. If tariff classification is done incorrectly, higher or lower tariff payments than appropriate may be incurred. 
2. Application of trade defense measures: Tariff classification is also important for the application of trade defense measures, such as antidumping and safeguard measures. If a product is incorrectly classified, inappropriate trade defense measures may be applied. 
3. Compilation of business statistics: Correct tariff classification is also essential for the collection of trade statistics. If a product is classified incorrectly, erroneous statistical data can be obtained, making political and commercial decision-making difficult. 
4. Compliance with rules and regulations: Correct tariff classification is essential for compliance with the rules and regulations of importing countries. If a product is incorrectly classified, violations and penalties may be incurred. 

How to select the correct tariff heading  

To select the correct tariff item, it is necessary to take into account several factors, including: 

1. Detailed product description: It is important to have a detailed description of the product, including its use, function and composition. In this way, the tariff item that best corresponds to the product can be identified. 
2. Consult the tariff nomenclature: The tariff nomenclature is a document that contains the detailed description of the products and the corresponding tariff items. It is important to consult the tariff nomenclature to verify the tariff classification of the product. 
3. Classification based on use: In some cases, the tariff classification may vary depending on the use given to the product. It is important to consider the intended use of the product when selecting the tariff item. 
4. Specialized adviceIf in doubt, it is advisable to consult tariff classification experts, such as customs brokers or specialized consultants, such as RRYP. 

Tips to avoid violations in the classification of the tariff item 

To avoid violations of tariff classification, it is important to follow some tips: 

1. Check tariff classification before import: It is important to verify the tariff classification before importing the product, to ensure that the correct tariff heading has been selected. 
2. Maintain accurate records: It is important to maintain accurate records of the tariff classification of imported and exported products, to facilitate verification and compliance with rules and regulations. 
3. Update tariff classification: It is important to keep the tariff classification of products updated, in case the description or use of the product changes. 
4. Staff training: It is advisable to train the personnel in charge of tariff classification, so that they are familiar with the rules and procedures of tariff classification. 

To consider

There are several online tools that can be useful for searching trade tariffs. The most common is Acces2Market.

This online tool provides information on tariffs, regulations, and customs procedures for more than 120 countries.

Allows users to search for products by tariff code, product description or keyword.

In fact, among our services, at RRYP we carefully analyze the choice of the tariff heading and all the regulations that it entails for a correct export, so that you can avoid any sanctions and get the most out of your business. 

It is important to note that these tools only provide general information and do not replace consultation of the official tariff nomenclature of each country, nor consultation with tariff classification experts.

That's why at RRYP we also take care of identifying the correct tariff heading and researching the regulations. 

FAQ

Conclusion

In conclusion, selecting the correct tariff heading is essential for international trade, and it is important to take into account various factors to avoid violations and penalties.

Checking tariff classification before importation, maintaining accurate records, updating tariff classification, and training staff are some of the measures that can be taken to prevent tariff classification violations.

The correct application of tariff classification rules and procedures contributes to fair and orderly international trade , and to the economic growth of countries.

If you need help, write to us: contact.

RRYP Global , lawyers specializing in international trade and exports and imports