Every imported or exported item is assigned a classification code that corresponds to its product type. These numerical codes are used by countries worldwide for statistic- gathering purposes. They also determine which tariffs, if any, will be applied to the product. Additionally, foreign trade regulations require exporters to include the correct classification code on export documentation. • All import and export codes used by the United States are based on the Harmonized System (HS) of the Harmonized Tariff Schedule (HTS). Virtually all countries base their tariff schedules on this system, making it easier to conduct international trade.

• The HS assigns specific six-digit codes for varying classifications of products and commodities. Countries that use the HS are allowed to add longer codes to the first six digits so they can classify their products even further. For example, the United States uses 10-digit codes to classify products.

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The first six digits are the HS number (sometimes also called the HTS number). The HS number is the first six digits of a product’s classification code, regardless of which country is classifying it or how many digits that country adds when creating its own product classification codes.

The last four digits are unique to the United States and classify the product more specifically. The entire 10-digit code is known as a Schedule B code. Schedule B codes are administered by the U.S. Census Bureau, and they are important to know when exporting.

Let’s look at how the United States and Japan classify a men’s wool overcoat with a fur- lined hood. In the United States, the Schedule B number is 62; in Japan, where overcoats with fur are distinguished from those without, the number is 6201.11.100. Both numbers start with the same six “harmonized” digits, but Japan adds only three, not the additional four seen in the United States’ Schedule B number. These variations in classification can make a big difference: overcoats with fur are taxed at 12.8 percent, whereas overcoats without are taxed at 9.1 percent. If the Japanese buyer purchases an overcoat without fur but gets charged the duty rate for a coat with fur, the buyer unknowingly pays almost 4 percent more than he or she should have. The more you know about the codes and the duty rates for your products in specific markets, the lower the landed cost price will be, and the more you can save your customer.

Why You need to Know Your Product's Schedule B and HS Codes Exporters need to know their product’s Schedule B and HS codes so they can: • Determine applicable import tariff rates and determine whether a product qualifies for a preferential (lower) tariff under a free trade agreement. • Complete the many required shipping documents, including commercial invoices, certificates of origin, and other documents. • Comply with U.S. Law, where applicable. How to Identify Your Product’s Schedule B Code You need to for each item you plan to export.

Modifying your inventory system—adding a field for each product’s Schedule B code— will simplify your export process because you’ll have ready access to the relevant Schedule B codes when completing requisite export documentation. The Census Bureau offers a free, widely used online Schedule B search tool () that can help you classify your products. The Schedule B search tool is the most commonly used method for classifying products. Simply follow the easy on-screen instructions to find the appropriate code for your product. To learn more about the Schedule B search engine, visit the Census Bureau’s Frequently Asked Questions page (). If after searching online you still can’t find the Schedule B code you need, consult a commodity specialist at the U.S.

Census Bureau Foreign Trade Division. For durable goods (metals, machinery, computers, electronics, and other miscellaneous goods), call (301) 763-3259. For non-durable goods (food, animal, wood, paper, mineral, chemical, and textile goods), call (301) 763-3484. Your local can help you identify the appropriate HS and Schedule B codes, as well as duties and taxes for specific countries. If your product is difficult to classify, the Customs Rulings Online Search System (CROSS) database (available at )can help you find its Schedule B code. CROSS contains official, legally binding rulings from other exporters’ and importers’ requests for Schedule B codes. Use this database to determine whether other exporters or importers requested a ruling on the same or a similar product and, if so, what that ruling was.