Harmonized System

1. Harmonized System By Ree Russell US Commercial Service

2. What is the HS number? • A Harmonized System is used because Customs officials worldwide don’t speak the same language. • With everyone using the same “songbook,” we can watch the flow of goods in and out of countries. • It’s like a Social Security Number, uniquely explains your product. Helps others who are not familiar with your product. • HS is a Product Classification.

3. Classifying your Product • Classify your good on WHAT IT IS, not on its end use, nor its destination (like Mexico or Malaysia.) • Example: A bolt by itself may be a part of a machine, but it is first and foremost a bolt, and it should be classified as such. • Example: Grass seed and fertilizer mix. Classify the mixture as being primarily grass seed, if it is.

4. Harmonized System • The World HS number is 6 digits long • US schedule B number is 10 digits long • The whole world only recognizes the first 6 digits (everybody has the same songbook) • THE MORE NUMBERS, • THE MORE DESCRIPTIVE

5. HS Sections are usually arranged in order of degree of manufacture • Section 1Raw material, a cow • Section 2Semi manufactured, such as rawhide • Section 3Finished product, like a handbag or leather shoes

6. What is the HS number? • Chapter: 82 • Tools, Implements, Cutlery, Spoons and Forks, of Base Metal • Heading: 8208 Knives and cutting blades • Subheadings: 820810 for Metalworking • 820820 for Woodworking 820830 for Food Industry Machines • 820840 for Agricultural, Forestry Machines: includes a LAWNMOWER BLADE) • The world recognizes the first six digits. • Notice the US does not further define this particular Lawnmower Blade,as the US last four 4 digits are zeroes. • US Schedule B Number: • 8208400000

7. Where to find the HS code: • The Harmonized Tariff Schedule of the US is online, but can be purchased at the government bookstore: • U.S. Department of Commerce Schedule B Classification of Exports • CALL your US Commercial Service/Export Assistance Center • 704 333 4886 –or- our “sister” agency the U.S. Census Bureau, Foreign: Trade Division. • For “Assistance with Classifying Products” OR “Finding a Schedule B Number,” call any of the phone numbers below: (an upgrade from “Durable Goods,” Non-Durable Goods, or “Don’t Know”) • (301) 763-3259; (301) 763-3484; (301) 763-3047 • Census On-line: www.census.gov/trade (NEW! eff. Mar 8, 2010) • - choose Schedule B Search Engine from tool bar • or select Search and type in a key word(s) • Remember: the US-specific number Schedule B is 10 digits long; the first 6 digits is a world recognized HS number

13. The Classification Challenge • Let’s look for classifying a Generator Suggested because of the market potential for countries that are logistically close to North Carolina exporters! And the product is in Demand in the Caribbean, CAFTA countries, and African countries! Thank you, Electricity!

19. Select 2 Numbers At A Time Find your Chapter: Chapter 1 (Live Animals) to Chapter 98 (Special Classifications) Chapter 85 is Electrical Machinery and Equipment and Parts Thereof

20. Select the Chapter Heading Next 2 numbers is the Chapter Heading. Chapter Heading 8501 is Electric motors and generators “Look around” or “further” to the 4-digit codes ONLY in this area: 8502 - Electric generating sets and rotary converters 8503 - Parts suitable for use solely or principally with Machines in 8501 or 8502 8504 - Transformers

21. 8501.10 - Motors with a certain wattage output 8501.21 – “Universal” AC/DC Motors 8501.31 – “Other” DC Motors and DC Generators not exceeding 750 W 8501.32 - “Other” DC Motors and DC Generators of output 750 W but not exceeding 75 kW Proceed to Add Another 2 numbers

22. Stay on Track by just Adding 2 numbers at a time. 8501.33 - Generators exceeding 75 kW (which is 100 hp) but not exceeding 375 kW 8501.34 - Generators exceeding 375 kW 8501.40 - “Other” AC Motors

23. If you see .0000 at the end, try to focus on the 5th and 6th digits only HS Code 8501.32 refers to DC Generators of an output of 750 W but not exceeding 75 kW – just like the Generator in the Lowe’s catalog page (see handout)

24. Final 7th, 8th, 9th, 10th #s • Represent the HS Statistical Subdivisions • Full 10 digits (sometimes these last four “Final” numbers are just “0”s! • The Statistics can be very Specific – • or still rather Vague!

25. HS + 4 = 10 digit Sched B • So…. • We have a “medium output” Generator – (a full 10 digits and even more descriptive) = • 8501.32.6000 -- the U.S’s Schedule B!

43. Other Classification Challenges • The same process for Lawnmower Blades and Generators is applied for additional Audience Requests of EU 201 Class #2 (last week): • Forklifts • Hardwood Living Room Furniture • Scrap Metal, ferrous and non-ferrous • Plywood • Motor Fuel Additive

44. If you’re still awake… GRI Explanatory Notes • Found at the US Customs website, the Explanatory Notes go into greater detail concerning General Rules of Interpretation. • Go to www.customs.gov • Select Trade • On the right hand side, select Harmonized Tariff Schedule of the United States • On right, select Current HTSA Edition by chapter • Select General Notes, General Rules of Interpretation, General Statistical Notes • Click General Rules of Interpretation • Scroll through to your product area

45. General Rules of Interpretation • Found in the beginning of the Harmonized Tariff Schedule, GRIs lay the ground work for Product Classification overall, including systems, sets, mixtures and composites, repetitive uses, etc. • If in doubt, call us: your Charlotte US Commercial Service (704) 333-4886. We interface w/our “sister” Federal agencies like US Customs (now part of US Customs & Border Protection - CBP) on your behalf.