What is Tariff Classification

Tariff classification is the process of assigning a product with a specific code under the Harmonized System (HS) or TARIC (for the EU), which is used to determine how the product will be treated by customs ie how much duty is applicable or are there any restrictions to the product.

Why It Matters:
One of the most common challenges businesses face when dealing with customs is incorrect tariff classification. This seemingly small detail can lead to significant issues such as:

• Customs delays that impact shipping timelines.
• Higher duties due to misclassification of products.
• Import/export penalties for failing to comply with tariff regulations.

Having the right tariff codes is crucial for smooth trade operations, and ensuring accuracy can help avoid unexpected costs and disruptions.

Step by Step guide on how to classify your product:

1. Understand the Product’s Features
   Start by gathering all relevant details about the product, such as its material composition, function, and use. This will help in determining its classification accurately.
2. Review the Harmonized System (HS) Codes
   Use the Harmonized System (HS), a globally recognized system for classifying goods. HS codes are usually six digits long, and they group products into categories based on their nature and intended use. Research the correct code by looking at the product’s key attributes.
3. Check the EU TARIC Database
   In the EU, check the TARIC database, which provides the EU's integrated tariff system. This tool can help you identify the appropriate customs tariff for your product. The TARIC database includes duty rates, import/export regulations, and trade policies that may apply.
4. Verify Product-Specific Rules
   Some products might have additional specific rules or exemptions that apply, such as import quotas or safety standards. Make sure you’re aware of these when classifying certain goods (like food, chemicals, or electronics).
5. Consult the Binding Tariff Information (BTI) System
   If you’re unsure about the correct classification or if you regularly deal with complex goods, consider requesting a Binding Tariff Information (BTI) decision from the customs authorities. A BTI gives you legal certainty on how your product should be classified.
6. Double-Check the Classification
   After finding a likely HS code and checking for any special conditions, double-check the classification by comparing similar products or seeking professional advice if you’re still uncertain.
7. Consult with Customs Experts
   If you are unsure or dealing with high-value or complex products, don’t hesitate to consult with a customs broker or compliance expert. They can ensure the product is classified correctly to avoid costly mistakes or delays.

‍How We Can Help:
Here at the International Trade Institute, we specialise in guiding businesses through the complexities of correct tariff classification:

• Product Classification Review: We help businesses accurately classify products by thoroughly reviewing product details and helping to apply the appropriate tariff codes.
• Up-to-Date Regulatory Insights: Our in-house training services ensure your team stays informed about the latest changes in customs regulations, reducing the risk of non-compliance and costly mistakes.
• We include a module of tariff classification in our Diploma in International Trade Compliance

With the right tariff classifications, businesses can streamline their processes, minimize delays, and optimize trade operations.

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