A tariff is a system of duties imposed by a government to be paid on a particular class of imports or exports. The Harmonized Commodity Description and Coding System was developed and is maintained by the World Customs Organization. Almost 200 countries use the Harmonized System (HS) as a basis for trade. The HS is structured upon a six-digit nomenclature.
Why is the HS Important? Accurate classification of goods is crucial to ensure products are imported correctly into the Country. It is mandatory to properly classify your goods as an importer/exporter of commodities. It is also a suppliers’ responsibility to ensure that products are classified with the correct HS Codes. Duties are the monetary value that is then levied against a particular tariff. Duties applied to imports can range from a couple percent of the invoice cost up into the 20% + depending on the country and commodity.
In the event a company is non-compliant or incorrectly classify a product this can result in monetary penalties, suspension of privileges and goods being held.
Where Strategic Can Help
HS Classifications are often tedious and overlooked or misclassified. Strategic can facilitate consultancy services to classify your products into the correct HS Classification. It is important that proper classification of products is completed by a some who is knowledgeable is the process and product whether that is an employee, broker or classification consultant.