The Harmonized Commodity Description and Coding System, or Harmonized System, is a means for customs agents to know “what’s in the box” without having to open it or understand what’s written in various foreign languages on the shipping documentation. It’s a system for identifying commodities in trade based on a string of six to eight digits.
The Harmonized System is used by 179 countries covering about 98 percent of world trade for the assessment of customs duties (“border taxes” on imports) and the collection of statistical data.
Under the Harmonized System, products are classified into two categories, 21 sections, and 96 chapters by form and function. For example, 8471.30, is “Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display.”
English translation: laptop computer.
Combined with the product’s origin and value, customs agents use the HS Code to derive the tariff to be assessed.
The string of numbers that customs uses to assess taxes is six to eight digits long. To get even more specific in the collection of statistics, however, countries that use the Harmonized System are permitted to add digits to the HS Code to a total of 10 digits. In the United States, we refer to the full, 10- digit string as the Schedule B Number if it’s for export and the HTS Number if it’s for import.
The Harmonized System was introduced in 1988 and has been adopted by most of the countries worldwide. It has undergone several changes in the classification of products. These changes are called revisions and entered into force in 1996, 2002, 2007, 2012 and 2017.