# Presentation: 164522

## Harmonized System

**By**
**Ree Russell**
**US Commercial Service**

## What is the HS number?

**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.**

**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.**

## 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.

## 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

## HS Sections are usually arranged in order of degree of manufacture

- _Section 1_	*Raw material*, a cow
- _Section 2_	*Semi manufactured*, such 			as rawhide
- _Section 3_	*Finished product*, like a 				handbag or leather shoes

## 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_

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##      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:
- Durable Goods (Chapters 1-71): (301) 763-3259
- Non-Durable Goods (Chapters 72-97): (301) 763-3484
- Don't know: (301) 763-3047
**Census On-line: **_[www.census.gov](http://www.census.gov/foreign-trade)__[/foreign-trade](http://www.census.gov/foreign-trade)_
- - choose Schedule B Search Engine from tool bar
- - or select Search and type in a key word(s) in capital letters
**Remember**: the US-specific number Schedule B is 10 digits long; the first 6 digits is a world recognized HS number

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## 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!

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## 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

## 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**

## Proceed to Add Another 2 numbers

**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**

## 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**

## 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)

## 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!

## HS + 4 = 10 digit Sched B

- We have a “medium output” Generator  – (a full 10 digits and even more descriptive)  =
- 8501.32.6000 --  the U.S’s Schedule B!

## 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.ustreas.gov**
**Select Trade**
**On the right hand side, select Harmonized Tariff Schedule**
**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**

## 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” Census Bureau or US Customs (Treasury/Customs & Border Protection) agencies on your behalf. **

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## Containers and Cases General Rules of Interpretation

- If a container is suitable for repetitive use, it must be classified on its own.
- Example: If you are exporting propane in a tank to Canada, you actually have to classify the propane in its own classification and the tank in its classification, because the tank itself is reusable in Canada.

## Containers and CasesGeneral Rules of Interpretation 

- Full cartons of eggs are classified under eggs, 040700.  Without the eggs, the carton is made of paperboard, 482370.
- A can of Coke falls under beverage, 220210.
- A violin case without the violin is HS 4202xx, but if shipped with the violin inside, it is HS 920210, a stringed musical instrument.

## General Rules of Interpretation

**GRIs form part of the Customs Tariff legislation and have been designed to**
***ensure uniformity***
** ****in classification decisions**
**GRIs are essential for classifying.**

## Harmonized System

**HS numbers are “drivers” of the import duties that foreign importers pay for your product.**
**Foreign Customs authorities determine what your product is by the numerical product code – the Ninja Turtle!  **
**HS numbers also determine US export statistics – you can watch product flows in and out of countries.  CAN BE great for Marketing Managers, but not always!  **

## Finding Export Statistics 

- After determining your HS code, the US Department of Commerce can help you tap into the export statistics by country market.

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Make $ ... 
then let us know about your
EXPORT SUCCESS

Thank You!

**Make $ ... **
**then let us know**** about your**
**EXPORT SUCCESS**
**Thank You!**