The proper product classifications are a crucial part of the international shipping process. Without the correct HTS (Harmonized Tariff Schedule) code, freight forwarders can face legal penalties, fines, and have their customer’s entire shipment seized. To help you mitigate risks, we asked DDC's customs brokerage processing experts - who are thoroughly trained and well-versed in this system - for an overview of HTS codes, how they play into customs compliance, and a few handy resources to help you keep freight moving.
Why Harmonized Tariff Schedule Codes and their accuracy matter when crossing customs
An HTS code is a 10-digit import classification required on all shipping documents - such as the Custom Declaration Form and Commercial Invoice. HTS codes, also called HTS numbers, are administered by the U.S. International Trade Commission (ITC) and are specific to the United States. A U.S. importer must use this code properly because commodity duties are assessed based on this classification. What’s more, classifying a product incorrectly can lead to non-compliance penalties, border delays, confiscated cargo, or even a denial of import privileges.
Shipping classifications can get very granular and very specific depending on the product being shipped. HTS codes take their first six digits from the international HS code and then adds an additional four digits for further definition. Adding on nation-specific codes to HS codes is common in many countries.
The first two-number pairing in each HTS code represents the chapter of the good within the HS classification system, which identifies an important layer of information about the cargo being imported. Here are some examples of HTS / HS chapters:
40 ─ Rubber And Articles Thereof
42 ─ Articles Of Leather; Saddlery And Harness; Travel Goods, Handbags And Similar Containers; Articles Of Gut (other Than Silkworm Gut)
48 ─ Paper And Paperboard; Articles Of Paper Pulp, Paper Or Paperboard
50 ─ Silk, Including Yarns And Woven Fabrics Thereof
57 ─ Carpets And Other Textile Floor Coverings
62 ─ Articles Of Apparel And Clothing Accessories, Not Knitted Or Crocheted
63 ─ Made-up Textile Articles Others; Needlecraft Sets; Worn Clothing And Worn Textile Articles; Rags
69 ─ Ceramic Products
70 ─ Glass And Glassware
92 ─ Musical Instruments; Parts And Accessories Thereof
Whether you are a novice or an experienced international forwarder, export.gov also has a plethora of information and guidance on exporting goods to new countries.
In addition to the standard section and chapter codes, U.S. exporters must also use Schedule B codes, which are a 10-digit subset of HTS codes and are used for statistical purposes by the U.S. government to monitor U.S. exports.
- Schedule B codes are maintained by the U.S. Census Bureau instead of the ITC.
- As with HTS codes, the first six digits of a Schedule B code should be the same as an HS number; however, the last four digits may be different even than the HTS code.
What you need to know about HTS codes and customs compliance
Tariffs and duties are normally imposed on imports and exports based on the classification code given to them. According to floship, for a product to get a duty, international freight forwarders need to ensure that there is a classification number assigned to the consignment that is used by the receiving country.
It’s important to understand the variations in codes because a four-digit difference could completely change the classification of the exported goods, and you can’t simply use an HTS or Schedule B number in place of an HS number. Additionally, HTS codes are not static and are constantly changing to allow for new products and technology. Therefore, to avoid fees or a delayed shipment, it’s imperative to ensure that the codes you are using are valid and up to date.
Helpful resource: This convenient HTS code tool provides the most up to date HTS number by simply entering the goods in question.
Due diligence is key in maintaining proper customs compliance. DDC alleviates the stress of dealing with customs officials by accurately identifying tariff and tax declarations for all shipments. We ensure that important fields are correct to avoid any setbacks. Complete this quick webform for more information on Import/Export Rating or other customs brokerage processing services.
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