HS codes, Tariff codes, HSN, ECCNs and Schedule B numbers

Businesses involved in cross border trade may find themselves dealing with several different product classification systems, each with different purposes. It is important for traders to classify their products correctly under every nomenclature system to avoid issues at time of import or export.

What are HS codes?

HS codes are maintained by the World Customs Organization and are used globally to identify products to Customs on import and export declarations. HSN is short for harmonized system nomenclature. HS codes are used by authorities in various ways such as to:

1. Determine general duty rates for imports
2. Determine Free Trade Agreement concessionary duty rates
3. Determine licensing requirements for imports and exports
4. Determine licensing requirements for handling and storage of materials

It takes some training before an individual is able to assign a HS code for a product, as WCO rules need to be applied in a standard manner. In many parts of the world, HS codes are referred to as HS Classifications. In the United States of America and some parts of the world, these are sometimes referred to as tariff codes. Countries like Singapore and Hong Kong almost never refer to these as tariff codes, since duty rates for most products in these countries are zero. It is not uncommon to find HS codes mentioned on transport documentation such as a packing list, Bill of Lading or invoice. In theory, HS codes for all products should be harmonized to the first 6 digits all over the world.

In all countries, HS codes come under the jurisdiction of Customs authorities, so if traders need advance classification rulings they will need to apply to the Customs authorities.

What are ECCNs?

ECCN refers to Export Control Classification Number. This is an alphanumeric number referenced in the Commerce Control List, which is used by the United States to determine export licensing controls that come under the jurisdiction of the Department of Commerce which is under the Bureau of Industry and Security (BIS). ECCN numbers are grouped into 10 categories. These 10 categories are then split into 5 general groups of products. ECCNs are predominantly used in the United States but other countries may refer to them to determine corresponding export control or strategic control numbers.

What are Schedule B numbers?

Like ECCN numbers, Schedule B numbers belong to a nomenclature system specific to the United States. These numbers are used for export declarations and the first 6 digits are based on HS code numbers. Schedule B numbers are 10 digits and used to collect trade related statistics by the Bureau of Census.

A final word…

If in doubt, it is always advisable for importers and exporters to reach out to qualified and experienced professionals for help. Some forwarders hire or work with highly skilled Customs agents that can provide clear guidance, so that would be a good place to start for new traders. It is also a good idea to schedule reviews of this data on a regular basis, at least annually – so that changes in legal interpretations affecting these classifications can be applied in a timely manner.