Imports and exports between the UK and the EU (including Norway) now need to state the item’s commodity code. These codes are drawn from the globally-recognised, WTO-approved Harmonised Code (HS) system, so the commodity code for a shipment of bricks, for example, is the same whether it comes from Germany, India, or Ghana. HS Codes are ten-digit quick reference strings that tell readers the broad category, specifics, variant, and country of origin of the goods they're describing. Here's how they work:
What Do Commodity Codes Do?
Commodity Codes are attached to every shipping manifest alongside the goods they're representing. They give readers a quick way to identify the qualities of what's being imported/exported and cross-check the crate against what's formally declared.
Descriptions and product names for the marketplace are sometimes subjective or unclear and don't indicate exact qualities. By requiring an unambiguous, HS Code to describe goods, tariffs, taxes, and restrictions (e.g. VAT, duties) can be calculated by HMRC faster and more accurately.
Restrictions on toxic, dangerous, banned, or sensitive materials are also strictly monitored and enforced via HS logging. And the code itself serves as a legally-binding guarantee from the buyer and exporter that they're not misrepresenting their product at market or for customs.
How Does An HS Commodity Code Appear?
An HS commodity code always looks something like this:
0123.45.6789(0) - PRODUCT CATEGORY DESCRIPTION/VOLUME
The ten 0-9 numbers in different sections change based on the precise good described. Letters and words never appear inside HS codes. There are 21 main product categories to pick from (the first two digits) with 96 subcategories also recognised (digits three and four).
Midsection digits five and six show the variant of the product. The final four to five numbers list the country and region of origin. There are now over 5,000 unique codes in regular use under the WTO-HS system, with more being regularly added. You can use the UK government's HS Code lookup tool to find out more about what each designation means.
Where Are Commodity Codes Used?
HS codes appear in paperwork relevant to ports, transfers, customs posts, and warehouse logs worldwide as a quick reference tool and legal guarantee. They're also found in manufacturing and retail spaces - standardising product categorisation saves time and effort.
What Happens If UK Goods Are Exported Or Imported Without Their Commodity Codes?
As of 2021, it is a legal requirement to feature the correct HS Code(s) for your goods on EVERY piece of customs documentation that references the shipment.
The HS Codes need to be clearly listed somewhere on the shipping manifest, customs invoice, any declarations made, and (in some cases) the certification paperwork. Failure to supply the HS Code may result in your goods being delayed for verification, seized, impounded, or returned.
It is also a UK and EU criminal offence to knowingly misrepresent any part of an HS customs code to officials to evade tax, regulations, or tariffs. You may have to pay an excess or fine if your code doesn't exactly match - so make sure to use the right one! We can help you with this if you’re unsure.
How Do I Know If I’ll Need A Licence For Export?
Some goods categories require a licence before you can export them to Sweden, Finland, or Denmark – all EU members – or to Norway, which follows slightly different rules. Enter your commodity code into an online index for the country you're importing from or exporting to. Any special restrictions, the bills you'll pay at customs, and licencing requirements will all be listed.
Help With Customs Codes From NTEX
Confused by it all? Don't worry. NTEX will talk you through how to use codes, how to create customs documentation, and how to integrate codes into your shipping routes and business management. Call or email us today to find out more.
Image source: Unsplash