Choosing the Right HS Code for International Shipping

How HS Codes Shape Global Shipping Dynamics

Written By: Narek Hakobyan

Understanding the intricacies of international shipping requires numerous considerations, and one of the critical factors that can impact your shipments is the Harmonized System (HS) code. Understanding the significance of HS codes in international trade is a critical aspect of ensuring smooth customs clearance, accurate tax and duty assessments, and international regulation compliance. In this blog we will dive into the world of HS codes and how they shape the landscape of international shipping.

What Is an HS Code?

The World Customs Organizations (WCO) developed Harmonized System codes as a standardized numerical method to classify goods for international trade. It creates a common language for specifying products and determining the duties and taxes. HS codes are critical for international trade as it is used by over 200 countries and recognized in 98% of world trade.

Why You Need an HS Code

Failure to include the HS code can lead to significant impacts on customs charges and VAT. Without the HS code, customs officials may struggle to identify the imported product accurately, potentially resulting in incorrect duty and tax rates, leading to overcharges or undercharges. This can cause financial difficulties for both the importer and customs officials. Furthermore, it may require additional information gathering that can delay the customs clearance process.

Finding the Correct HS Code

Finding the correct HS code is essential for international shipping. Here are a few ways you can find it:

• Start with Official Customs Websites or U.S. International Trade Commission (USITC)
• Utilize the World Customs Organization (WCO)
• Consult a Freight Forwarder like Mercury or your country's customs authority when in doubt.

Stay Compliant with New Customs Regulations

Recent changes in Europe have brought about the Import Control System 2 (ICS2), a customs pre-arrival security and safety program initiated by the European Union (EU) for air freight. ICS2 enhances customs risk management and standardizes procedures across EU member states, going into effect on March 1st, 2023. 

These changes emphasize the integral relationship between ICS2 and HS codes. Together, they streamline customs clearance, enhance security, and ensure precise assessments of duties and taxes, facilitating efficient international shipping. Accurate HS code assignments are vital for ICS2 compliance, promoting cost-effective and compliant global trade.

Conclusion

The complexities and challenges of HS codes and international shipping can be challenging. At Mercury, we are here to assist you in finding the correct HS code for your life science shipments. We understand the nuances and potential pitfalls, ensuring your shipments are properly classified, and you don't encounter delays or incorrect fees.

To further your knowledge on the complexities of international trade classifications, review our page on HS, HTS, and Schedule B codes.