If you’re new to the world of international trade, you’re probably overwhelmed with a lot of new words, phrases and information on how to get started. You may even be asking yourself questions like ‘what is the International Harmonized System?’ or ‘Do I need an HTS code for exports?’. In regards to whether an HTS Code is needed for exports, the answer can be clearly explained.
HTS (Harmonized Tariff Schedule) codes are not used for exports. HTS codes are used to import products, while export codes, also known as Schedule B codes are used to export products. Schedule B codes determine tariff classification and are required when filling out trade documents to export goods out of the United States.
Read on to learn more about the key differences between HTS and Schedule B codes, how to use a Schedule B code, and where to find a Schedule B code for a product.
An HTS code, or Harmonized Tariff Schedule code, is a unique 7-to-10-digit code used to classify products for import into a country. HTS codes are primarily used to provide tariff classification and statistical analysis. Customs organizations and agents around the world use these codes for imported products.
The first six digits of an HTS code are derived from the International Harmonized System. The remaining 1-to-4 digits make HTS codes unique and are specific to each individual country.
In the U.S., HTS codes are known as HTSUS codes. These 10-digit codes are assigned by the International Trade Commission (ITC), which provides codes for thousands of different commodities unique to the U.S.
International Harmonized System codes, or HS codes, are developed by the World Customs Organization to create a standardized commodity classification system. HS codes are universally recognized in global trade by 183 countries and territories worldwide.
HS codes form the basis of all import and export commodity codes. These are comprised of six digits that can be broken up into a chapter, heading and subheading.
Export codes, better known as Schedule B codes, are used to classify goods for export to other countries. Schedule B codes are comprised of 10 digits - the first six of which come from the corresponding item’s HS code. The following four digits give an item its identifying Schedule B number, and in some cases, are different from the item’s HTS code. These codes are used to provide tariff classification on exports and to fill out international trade documents.
Schedule B codes are required on shipments valued at more than $2,500 and on shipments requiring a license. Additionally, export codes are used by the U.S. government for statistical purposes to monitor exports.
There are two primary reasons that an export code, or Schedule B code, would be used:
All import and export codes used by the United States find their basis in the International Harmonized System. HTS codes and Schedule B codes are both used by exporters and importers around the world to identify products used in international trade. The difference between the two lies in their intended use.
HTS codes are used to classify import products, while Schedule B codes do the same, but for export items from the U.S. Both codes are used for tariff and product classification.
In the case of U.S. trade, HTSUS codes and Schedule B codes are both comprised of 10-digits and share matching HS codes for corresponding items. However, the next four digits in each number may differ, in turn, creating two unique codes. There are actually more HTSUS codes than there are Schedule B codes, indicating a more in-depth level of classification for HTS codes.
Additionally, HTS codes are assigned by the U.S. International Trade Commission (USITC) while Schedule B codes are assigned by the U.S. Census Bureau.
The most common way to find your Schedule B code is to use a Schedule B search tool. The U.S. Census Bureau has a free online Schedule B search engine that can be used by inputting a descriptive keyword.
Every product is described using three categories:
Once you find a general idea of the product you’re searching for, the tool will provide a list of increasingly specific options for you to select, identifying the product by item, state and type. Each level of classification will narrow down the search results until you find the exact product and corresponding Schedule B code that you need.
For example, if you search for “coffee”, the tool will offer options for “coffee and coffee preparations” or “coffee beans”. If you select coffee beans, you will have to choose between “roasted”, “unroasted”, or “other”. If you select “roasted”, you’ll have the option between “decaffeinated” or “non-decaffeinated”.
Once you select “non-decaffeinated”, the tool will open up a dropdown for two final identifiers: “certified organic” or “other”. Selecting “certified organic” beans indicates that the proper Schedule B code for that product is 0901.21.0010.
Additionally, the tool will also tell you in what quantity the product is measured when being used for export. In this case, our roasted coffee beans are measured in kilograms.
If you’re still having difficulty finding your product’s Schedule B code, you can find additional information and get help by contacting the U.S. Census Bureau Foreign Trade Division. You can also get in touch with a licensed import-export consultant, like ones at USA Customs Clearance.
Like HTS codes, Schedule B codes are broken down into two-digit sections that form chapters, headings and subheadings. The more subheadings that are included, the more specific the classification becomes. Let’s take a look at our coffee example above and break down how to reach each section.
The first two digits of a Schedule B code identify the chapter that the traded product belongs to. In this case, 09 indicates that the chapter that coffee is found under is “Coffee, Tea, Maté and Spices” which can be found under the section on vegetable products.
The third and fourth digits indicate the heading. You can see how the digits 01 further classify our product from coffee, tea, maté and spices, to just coffee - specifically, roasted coffee.
The next two digits form the product’s first subheading, in this case identifying our coffee as non-decaffeinated. Now that you have six digits, you have the product’s full HS number, meaning that the code 0901.21 is universally recognized as roasted, non-decaffeinated coffee worldwide.
The next four digits provide country-specific classification, like tariff rates and information used for statistical analysis. In this case, 0010, identifies our product as certified organic.
|Exporting Organic, Roasted, Non-Decaffeinated Coffee|
|Schedule B Code: 0901.21.0010|
|Section: Vegetable Products|
|09: Coffee, Tea, Maté and Spices|
|0901: Coffee, roasted|
|0901.21: Not decaffeinated|
|0901.21.0010: Certified organic|
Navigating the world of international trade can be complicated and confusing. Whether you make the correct decision can have a real impact on your business. That’s why it’s so important to speak with a licensed customs consultant like the ones at USA Customs Clearance, powered by AFC International.
An import-export consultant can walk you through the entire import or export process. Our consultants take the guesswork out of the situation and ensure that you have the information to make the right decision, every time.
Whether you’re having trouble finding your Schedule B code or figuring out how to export a certain product, our consultants are there to help. Our experts realize that every business and circumstance is unique and requires tailor-made solutions. Reach out to our experts today to schedule a personalized consulting session, or give us a call at (855) 912-0406 and get the import-export help you need.