Customs Classification: When your commodity code changes without notice....
The EU has changed the commodity code for 100+ products on 1 July 2021. Missed it? These are the consequences and how to make sure you stay up to date.
Customs Classification matters
The customs nomenclature is one of the customs parameters, along with the origin, which impacts customs duties and the regulations applicable to products traded with third countries. It also feeds foreign trade statistics.
Wrong code? Big Problem!
On import, in the event of incorrect tariff classification, the company must reimburse any duties and taxes that may have been evaded and pay a fine. For both import and export, sanctions can be significant when the incorrect classification has made it possible to divert a measure from foreign trade.
It is, therefore, necessary to pay special attention to the customs nomenclature: It is advisable to classify the products according to the classification rules, and… to monitor any possible modifications over time.
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Commodity codes are not static, they change
Because in fact, customs codes are not static, they change:
WCO changes
Customs nomenclatures can thus change Every 5 years, with revisions made by the WCO (the World Customs Organization).
EU customs nomenclature changes every October
Every year when the new EU Customs Tariff is published. With that follows the publication of EU classification regulations on specific products, new explanatory notes, CJEU rulings and more. In fact, the TARIC commodity codes (10-digits) of the EU change on a daily basis. For example, 107 TARIC customs codes were created on July 1, 2021, alone.
Why does the EU change its tariff codes?
The creation of new TARIC codes suggests the establishment of new regulations: anti-dumping duties, safeguard measures, quotas and tariff suspensions, or the EU's desire to monitor foreign trade statistics more closely to consider a tightening of regulations.
What if I miss a classification change and get the commodity code wrong?
The importance of missing out on a change in tariff classification and trying to declare an incorrect code cannot be underestimated. If your code no longer exists, a clearing agent cannot fulfil your instructions to use that code. The agent will then either get you to reclassify the product (delay) or suggest you a code to use (delay) or simply use the next best one at their discretion. This can lead to errors and further delays.
Remember that customs declarations are always issued on behalf of the exporter or importer, who appears respectively in box 2 for export or in box 8 for import declarations.
It is therefore up to the company that is listed on these declarations to get customs classification right.
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How Customs Manager can help
We offer a dedicated customs classification support service, from issuing reasoned opinions on the classification code of your products to the mass classification of catalogues with many SKUs. We assist in submitting Binding Tariff Information or Advanced Tariff Rulings and defend your case against the authorities if needed. We help you claim the overpaid duty back from the authorities and support you when you need to pay back. See here: https://www.customsmanager.org/support
In addition, we offer live and on-demand, self-paced customs classification training to upskill you and find the right commodity code.
More support is available on our dedicated expert blog, where the latest commodity code changes and updates are published along with expert explainer guides and support tools.
We provide a dedicated classification hub that lists the essential rules for effective classification and the latest EU classification decisions:
https://www.customsmanager.org/easy-customs-hs-code-classification
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