The Harmonized Commodity Description and Coding System (HS) entered into force in 1988 and is now used by more than 200 states. It replaced the Brussels Tariff Nomenclature. More than 140 states are contracting parties to the HS Convention whereas the rest apply the Harmonized System although they are not parties to the convention.
The Harmonized System is not just the worldwide basis for customs tariffs. Its importance goes well beyond the realm of customs as it provides a commodity coding system that is important not only for customs purposes but also for international economics and commerce statistics.
More than 98% of all cross-border trade in goods is done on the basis of the HS. It is based on 6-digit product codes and is divided into 21 sections and 97 chapters, whereby chapter 77 contains no commodities. It consists of approximately 5,000 product codes, to which a rate of duty can be assigned. The HS is updated every 4 to 6 years. The last update entered into force on 1 January 2012 when the HS 2012 was introduced.
Overview of the make-up of a 4-digit to 6-digit product code:
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