Tariff Codes & Classification
When exporting goods to a third country, including countries with which the European Union has a free trade agreement, it is important for exporters to correctly classify the goods being exported/imported.
As the exporter/importer YOU, and NOT your customs agent or broker, freight forwarder or representative are usually legally liable for the classification or incorrect classification of goods.
The correct classification of goods is vital so that
- The correct tariff, duty, & VAT is paid on relevant shipments of goods.
- Customs authorities can correctly risk analyze and if necessary, intervene in the movement
- Any anti-dumping measures can be applied to prevent market distortion
- General restrictions or prohibitions on certain classes of goods ( dangerous goods, chemicals etc)
- Preferential origin status can be correctly applied to certain goods benefiting from international agreements.
- Statistics on trade flows can be gathered correctly ( to maintain accurate quota monitoring and more)
Classification/commodity codes are used throughout the world in international trade.
The 8 digit Commodity code is entered into box 33 of the SAD. There are also occasions where this is a 10 digit code on imports, particularly if there are other reliefs or derogations applied to the product in question. make sure to classify your goods correctly.
Exporters will use the AEP System until 2023. Importers will use the AIS System to declare goods for Import.
The Harmonized System (HS) is run by the World Customs Organisation ( WCO) and was created in 1981
The HS is used by over 200 countries worldwide and covers 98% of international trade. The Harmonised system classifies products/commodities down to a 6 Digit level consisting of:
Chapter (2 digits)
Heading ( expanded to 4 digits)
Subheading ( expanded to 6 digits)
The Combined Nomenclature (CN) is used by the European Union which further expands the classification to the 8 and sometimes 10 digit level ( 10 digits for Imports)
Chapter (2 digits)
Heading (expanded to 4 digits)
Subheading (expanded to 6 digits)
Combined Nomenclature ( expanded to 8 digits)
TARIC Subheading ( Expanded to 10 digits)
The Combined Nomenclature is reviewed every year with sometimes changes and additions to codes from time to time.
There can sometimes be small anomalies between the HS system and the CN with regards to how certain entities and economic operators in different territories have classified their goods. Seek professional and or legal assistance if unsure.
The first place to start when attempting to classify your goods for the first time is the EU TARIC Database.
This is the integrated Tariff Database for the European Union. Measures relating to EU customs tariff rates (importing into EU) anti dumping and preferential information for benefiting countries are contained herein.
There is also information relating to Tariff Quotas and limits, though these can be tricky to navigate initially. Members of the IEA can contact our Business Services Department for initial assistance if needed.
After you have identified a likely classification for your goods, you should refer this to Revenue Classification Unit in Nenagh, if this is your first experience in classifying your goods.
Note: there is no legally binding opinion provided by Revenue at this stage.
For legal certainty on the classification of your goods, you may wish to seek a BTI ( Binding Tariff Decision) There are other considerations to be explored before doing this and it is advisable to seek the services of a professional customs broker as once legal certainty has been assigned, it is binding both on the member states but also on the exporter of the product for a period of 3 years.
Revenue Nenagh 067 63379
Please note this article and it’s content has been created as an aid to preparing for Brexit and/or international trade. It is not intended to be construed as official, legal or advice of any kind. Operators should always check with their local customs Authority for legal or any other obligations under international Trade