The Harmonized System (HS) is a classification system for over 5,000 products used by approximately 200 countries in their harmonized tariff schedules. Each commodity is assigned a unique six-digit classification number, which is used by all countries using HS in their rate cards. The HS is updated every five to six years and can be used for monitoring trends in international trade, creating policies, and monitoring controlled substances. The system was created in the early 1970s to classify international trade in a common way.
A Harmonized System tariff refers to a tariff classified by the Harmonized Commodity Description and Coding Systems, also called the Harmonized System (HS). The HS has categories for over 5,000 products and is used by approximately 200 countries worldwide in their harmonized tariff schedules. The HS governs approximately 98% of all international business interactions. The HS is maintained and updated by the World Customs Organization (WCO), based in Brussels, Belgium.
SA works by classifying all goods that cross an international border. Each commodity classified under the Harmonized System Tariff Code is assigned a unique six-digit classification number. A commodity is usually classified according to its substance or use. The first four numbers are called the header and the next two digits are the subheader. For example, all coffee is assigned the heading number 0901, but decaffeinated coffee has a subheading 22, which makes its fully harmonized system tariff code 0901.22.
This six-digit classification number is used in full and without modification by all countries using HS in their rate cards. While affiliated countries cannot change the basic six digits, they often add two to six digits to the end of the fare number for their own fare system and statistical research purposes. As a result, all participating HS countries are able to share a common naming system, while still keeping track of country-specific customs information.
The Harmonized System tariff classification came into force in the early 1970s. With the increase in international trade and global communications, countries needed a way to classify international trade in a common or harmonized way. HS strives to meet this need for a common catalog of goods with its harmonized system. The HS is updated every five to six years to keep up with technological and business changes.
The Harmonized System tariff can be used by countries and organizations for a variety of purposes. First, HS can be a useful tool for monitoring trends in international trade and customs tariffs. This information can be useful for governments in creating policies that regulate international trade and customs tariff law. For example, it can be useful for conducting business negotiations or drafting trade agreements. HS can also be useful for monitoring controlled substances and their constituents, such as chemicals that may be used to manufacture illicit drugs.
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