The Harmonized System
The Harmonized Commodity Description and Coding System (commonly known as "Harmonized System", HS) represents an internationally standardized tariff nomenclature used to classify imported and exported products. The HS is developed and maintained by the World Customs Organization, which counts over 200 member states.
The HS includes around 5,000 commodity groups. Each product group is identified by a 6 digit code, arranged in a legal and logical structure. Over 200 countries use this nomenclature as a basis for their customs tariffs. Some of this countries are: all the member states of the EU, the US, Canada, China, India, Brazil, Australia, Russian, Mexico, Indonesia, Turkey, Saudi Arabia etc. It is estimated that more than 98 % of the products in international trade are classified using the terms of the HS.
Examples HS codes:
060311 Flowers, cut; roses, flowers and buds of a kind suitable for bouquets or ornamental purposes, fresh
170112 Sugars; beet sugar, raw, in solid form, not containing added flavouring or colouring matter
180100 Cocoa beans; whole or broken, raw or roasted
510119 Wool; (other than shorn), greasy (including fleece-washed wool), not carded or combed
681019 Cement, concrete or artificial stone; tiles, flagstones and similar, (excluding building blocks and bricks) whether or not reinforced
250100 Salt (including table salt and denatured salt); pure sodium chloride whether or not in aqueous solution; sea water
The major role of the HS consists in the fact that it contributes to the harmonization of customs and trade procedures. It also facilitates the non-documentary trade data interchange, and helps to reduce costs related to international trade. In addition, the HS is largely used by governments, international organizations and other trade bodies for internal taxes, trade policies, rules of origin, freight tariffs, transport statistics, quota controls and economic research and analysis.
The HS is used for:
- customs tariffs
- rules of origin
- international trade statistics
- internal taxes
- trade negotiations
- transport tariffs
The Harmonized System is regulated by "The International Convention on the Harmonized Commodity Description and Coding System". The official interpretation of the HS is given in the Explanatory Notes, published by the WCO. The explanatory notes include 5 volumes, and are available in English and French.
The maintenance of the HS is a WCO priority. This activity includes measures to ensure uniform interpretation of the HS and its periodic updating, as a result of progresses in technology and changes in trade. The Harmonized System Committee is responsible for the policy examination, decision-making related to classification questions and amendments preparation. The HS is updated by the Committee every 5 – 6 years. Decisions concerning the interpretation and application of the Harmonized System, become effective 2 months after the approval by the HS Committee.
In conclusion, it should be noticed that the Harmonized System is a universal economic language and code for commodities, as well as an indispensable tool for international trade.
