Harmonized System Codes (HS Code)

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Harmonized System

Definition. The Harmonized System (HS), regarded as the "common language of international trade", is the World Customs Organization’s (WCO) international multipurpose product nomenclature used as the basis for Customs tariffs and the collection of international trade statistics.

Overview. In concept and design, the HS serves as a basis for a variety of purposes. These include Customs tariffs, the collection of international trade statistics, trade policy, the application of rules of origin, the monitoring of controlled goods, the application of quota controls, the levying of internal taxes and freight tariffs, the collection of transport statistics, and economic research and analysis. It consists of a comprehensive classification system in which all commodities can be classified and identified by a 6-digit HS code. The HS is subject to constant review and is updated every four to six years.

The latest version of the HS will enter into force on 1 January 2007. Known as HS 2007, it contains 354 sets of amendments which respond to today's security, commercial and technology developments. These amendments were largely driven by changes in trade patterns and practices, technological progress, the necessity to clarify texts to ensure uniform interpretation, and the need to make provision for specific social and environmental developments and concerns. Given that the HS is also used extensively for statistical purposes nationally and internationally, the 2007 version will impact on this area of activity as certain code numbers have been added, deleted or renumbered as a result of the amendments. It should be emphasised that the amendments to the HS Nomenclature should not affect applied Customs duty rates which, while not a WCO matter, are of concern to the WTO and its Members particularly with respect to tariff concessions. This whole package of amendments will ensure that the HS remains up to date for the years to come despite rapidly changing product features.

Currently used by more than 200 countries and Customs or Economic Unions across the globe, 124 of which are Contracting Parties to the HS Convention, this WCO instrument that regulates almost 98% of world trade is the only global goods nomenclature with a truly international appeal.
The HS is a major contributor towards the synchronization of Customs and international trade procedures and is therefore regarded as a major contributor to international trade facilitation efforts.