Ecommerce merchants importing or exporting goods internationally should be aware that the HS codes will be changing beginning January 1, 2022.
The Harmonized Commodity Description and Coding System (usually referred to as Harmonized System, HS, or HTS), established by the World Customs Organization (WCO), is a standardized system of tariff schedules for 211 countries across the globe. Every five years the WCO reviews the HS to ensure new technologies are appropriately categorized and any global trade changes are accommodated.
Read the full WCO announcement.
- Over 1,500 HTS codes have been updated in the US tariff schedule.
- While many updates are in chapter 84 (mechanical appliances, parts, etc.) and chapter 85 (Electrical machinery, parts, etc.), given the ever changing technology landscape; many apparel, wood products and chemical tariff codes have been updated as well. Don’t assume your industry isn’t impacted!
- The WCO has made these changes to the harmonized schedule, meaning the entire world is impacted. Make sure to utilize updated tariff schedules for every country you import into.
How to Read HS Codes
The HS is a very comprehensive (though not exhaustive) glossary of descriptions for over 5,000 internationally traded commodity goods and products. The codes are set up to quickly and efficiently identify goods as they can be categorized into types such as animal, vegetable, and mineral products, or manufactured and other highly processed goods.
HS Codes are broken down into product categories, which are then grouped into Sections, which, in turn, are further sub-divided into Chapters. The tariff classification is included as a four-digit number, known as headings, which broadly describe goods, which are divided into subheadings (a six-digit number). These tariff numbers identify the duty rates and trade restrictions as goods pass through customs.
Which HS Codes Are Changing in 2022?
The WCO must adapt any new or updated good and materials within the HS. This includes goods like new technologies (drones, vapes, electric vehicles), medical substances (new drugs, clinical research), as well as any items that may contribute to global issues (chemical weapons, bio material being used to test for viruses), and more.
Some examples of how the 2022 HS amendments have adapted to new innovations and global changes include:
- Electronic waste (e-waste): new headings and subheadings for e-waste was added for greater visibility into controlling the movement of hazardous wastes.
- Smartphones: a new subheading was added for smartphones, and a new chapter note was added to define the scope of this term.
- Drones: there are now specific provisions for “unmanned aerial vehicles” to simplify their classification.
- Vapes: because there are now tobacco products that are inhaled without combustion, there are now updated classification codes for these “novel tobacco and nicotine-based products” and new provisions added.
- Electric vehicles: new subheadings were added for heavy duty vehicles (tractors, trucks) with partial and fully electric motors. (The 2017 HS revision added some hybrid and electric vehicles but not all.)
- 3D printers: there is a new heading for “machines for additive manufacturing”, and subheadings were added that differentiate these machines based on materials (metal, plastic, rubber, ceramics, glass).
- Rapid diagnostic kits: in recognition of the potential danger of deploying tools for rapidly diagnosing infectious diseases, changes were made to the provisions for test kits.
- Clinical trial kits: new provisions were added to include placebos and clinical trial kits to enable classification without releasing placebo ingredients.
- Chemical sand substances: there are new subheadings for chemicals used as chemical weapons, radioactive materials, biological safety cabinets, parts required for the construction of improvised explosive devices, persistent organic pollutants, fentanyl-opioid substances and their derivatives.
Any company shipping goods internationally should review the HS 2022 amendments to ensure they are in compliance with the new codes. For companies importing into the US, there are also modifications to the HTSUS (Harmonized Trade System for the United States). Examine your tariff classification now so that your goods are properly documented starting January 1, 2022, when the new HS amendments go into effect.
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