It is imperative that the correct commodity code is selected for goods moving across international borders in the post-Brexit trading environment from January 2021 onwards. It is the legal requirement of the importer of the goods to select the correct classification code for the goods. The correct commodity code is required by customs to ensure that the correct duties are paid on the imported goods. The specific commodity code will inform customs if subsequent checks have to be made on goods at the port, for instance anti-dumping or possible tariff suspension.
The World Customs Organisation (WCO) are the body responsible for setting and editing international commodity codes. The WCO publish and maintain the Harmonised System Explanatory Notes. This is one source where you can find the correct commodity code for your goods. The most common tool used in selecting codes is the (TARif Intégré Communautaire; Integrated Tariff of the European Communities) or TARIC produced by the European Commission. You simply go to their website and browse for the code that best represents your goods. See more here.
Customs duties will apply to imported goods in the UK post-Brexit and the UK will no longer utilises the EUs TARIC to determine duty rates. The UK has introduced a “Trade Tariff Look Up” for traders who wish to find information on commodity codes and import duties applicable in the UK. See more here.
An import commodity code is a 10-digit code. The first 6 digits are from the global harmonised system. These 6-digit codes are common to the same goods throughout the world. Digits 7 and 8 are international identifiers unique to every country.
To identify the correct commodity code, follow these steps.
Select browse button on TARIC – click here.
Select your section and then your chapters
Check the legal notes that go with each commodity code. These notes are renewed every year
Your product must comply with the heading text. Your heading is the first 4 digits in your commodity code
Your product must legally comply with the wording of the heading
Continue to subheading text to try and narrow the search.
Your product must comply with these subheadings
Selecting the correct commodity code can be a straightforward process if the goods you are importing are uncomplicated. If you are importing more complex or goods with several components, then it is more difficult to select the correct commodity code. You will have to consider the “essential character” of the goods when classifying and selecting your code, as certain products will not always fit neatly into the sections and chapters of TARIC.
If you are importing raw materials and alter the goods so as to make a different product for export, then the essential character of the goods may change. This will mean a different commodity code must be provided for the export declaration when you are exporting the goods again.
If you are importing a novel product and you are having great difficulty with the classification of the goods, consult an expert. You may need to consider using the Binding Tariff Information (BTI). For more information on BTI and other commodity code related issues, click here.