By Jennifer Chang    Photo：CANVA

In the world of importers, exporters, and international logistics, there exists a seemingly mysterious yet incredibly vital "secret language"—the HS Code. If you work in international trade or logistics but only have a vague understanding of HS Codes, it’s akin to a traveler holding an undeciphered treasure map—captivating yet challenging to navigate. So, what exactly is the HS Code, and why is it so important?

The full name of HS Code is the "Harmonized System Code," which is translated into Chinese as the "International Commodity Classification System" or the "Harmonized Tariff Classification System." It was introduced by the World Customs Organization (WCO) in 1988 and serves as an international standard system for classifying goods. Recognized globally by customs authorities, it provides a unified standard for classifying import and export products, enabling customs to quickly categorize goods, apply corresponding tariffs, and implement various management measures.  In simpler terms, this coding system functions like an identity number for goods worldwide. Imagine this: every day, countless goods are flying, sailing, and being transported across the globe. Managing them by name alone would be impossible—it would be too chaotic to distinguish them. Thus, the HS Code was born, assigning each product a unique set of numbers to establish its identity.

The HS Code is a string of six-digit numbers, representing an internationally recognized classification standard for import and export products by customs. The numbers following the HS Code differ from country to country because, while all countries using the HS Code system apply the same first six digits for product classification, each country can further subdivide beyond these six digits according to their own needs. This subdivision allows each country to customize their customs coding system based on their tariffs, tax rates, trade policies, and statistical requirements. For example, in Taiwan, after the six digits, the government adds the seventh and eighth digits (referred to as the "subheading") for tariff purposes. For trade management and statistical purposes, the ninth and tenth digits (referred to as the "item") are further added. Finally, an eleventh digit, the "computer check code," is included. This system forms the commonly used import and export goods classification numbers (customs codes) in Taiwan, known as the "C.C.C. code."  So, HS Code and Customs Code are not exactly the same! HS Code consists of only 6 digits, while Customs Codes vary in length depending on the country (for example, 10 digits in China and 11 digits in Taiwan).

Without an accurate HS Code, goods may face customs clearance delays or even penalties. Each country sets different tariff standards based on HS Codes. If the code is incorrect, you may overpay tariffs or even violate the law. Moreover, governments rely on HS Codes to compile import and export data, which serves as a basis for economic policy. A wrong code could cost you not only money but also your customers' trust. It’s important to note that the HS Code  is dynamically updated, so staying informed about the latest coding information is crucial to avoid using outdated codes. As professionals engaged in international trade, we should develop a thorough understanding of HS Codes to make them a valuable tool in our work rather than a hindrance.

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