SME FAQ: Understanding Export Classification [Updated: Apr 2022]
This quick guide to export classification is part of the Shipa Freight Knowledge Series for small businesses.
Export classification is a way of categorizing products for export using a string of numbers, which are usually called commodity codes or export classification codes. Export classification codes mean that declarations can be completed and duties can be calculated.
If you’ve classified your products correctly, it will tell you if any controls apply to them, and if you need to obtain an export license. If you’re based in the US, you’ll need to know whether your item has an Export Control Classification Number (ECCN), which describes the item and its licensing requirements. There’s further information on the US Department of Commerce’s website.
If you’re based in a different country, check your government’s website for information about export codes and controls. For example, the UK government’s website and the South African government’s website have information about controlled items.
Codes are generally eight to 11 digits long. Most countries use the Harmonized System (HS) for the first six digits of the code, followed by several digits that are country specific. The Harmonized System codes are international codes developed by the World Customs Organization. Over 98% of goods traded internationally are classified using the HS.
To find the right export code for your product, you need to know some details about it, including the materials that it’s made from, the way it’s been manufactured, its purpose and how it functions, and how it’s presented or packaged. For some products - including food and chemicals - you’ll also need more detailed information, like precise ingredients. If your product is made of more than one material, you usually classify the item according to the higher percentage content, but there are some exceptions.
Your government’s website will provide information about the export codes that are used by your country, and may have a search engine to help you find the right code for your product.
If you need to classify lots of goods for export, you can pay a subscription for a trade compliance solution tool, which automatically assigns codes based on a description of the goods you’re exporting.
If you’re exporting products that have been manufactured by someone else, you could ask the manufacturer if they’ve already classified the products. Your freight forwarder may also be able to help you with export codes. However, remember that as the exporter, it’s ultimately your responsibility to choose the right code for your product.
If several items are packaged together, you usually need to classify each item individually. However, if the items can only be used together and won’t work separately, you can usually classify them under a single code. You should choose the code that applies to the most significant item in the set.
Using the wrong export code can mean your goods are denied entry or seized, and you could also face financial penalties and even legal action. Since misclassification can cost a lot of time and money, it’s really important to choose the right code and to double check it before it’s used on your customs paperwork. If you’re in doubt, your government may be able to help you to classify your products, or you could seek expert advice elsewhere.
With codes, classifications and export controls to navigate, selling your products abroad can feel complicated. It’s crucial to choose a reputable freight forwarder that can help you navigate compliance rules and stay on the right side of regulations. Use Shipa Freight to make shipping as straightforward as possible. Fill in a few details to get a quick online quote in minutes, and book and track your shipment simply and easily.
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