Harmonised System

What it means

The Harmonised System is the World Customs Organization's international six-digit goods classification, used almost worldwide. Every product, from coffee to machinery, has a code by which customs authorities determine duty, statistics and other measures.

The system is organised into sections, chapters, headings and subheadings by material and degree of processing. The first two digits indicate the chapter, for example 84 for machinery and mechanical appliances, and further digits narrow it down. It is revised roughly every five years.

The EU extends it into the eight-digit Combined Nomenclature for statistics and the customs tariff, and the ten-digit TARIC code, which adds preferential rates, quotas, anti-dumping duties and import or export restrictions.

How it works in practice

Correct classification is the basis of every customs declaration. The code determines the customs duty, VAT for some goods, licence requirements and eligibility for preferential treatment, so a mistake can mean extra duty, a fine or delayed goods.

When in doubt, a binding tariff information ruling can be requested from customs, valid throughout the EU for several years. It gives legal certainty for repeated imports or exports and helps avoid disputes during customs audits.

Codes are also used beyond customs: in Intrastat returns for intra-EU trade, in rules of origin, in export controls on dual-use goods and in the CBAM mechanism. The sales team should therefore record codes for every product.

What to watch out for

The same product can have different codes depending on material, function or degree of processing, and manufacturers often misclassify. Copying a supplier's code without checking offers no protection; the declarant is responsible for accuracy.

After a revision of the system or changes to the Combined Nomenclature, codes for some goods change. At the turn of each year, companies should check that their code lists and customs data in their systems match the current version.