Study Guide

✓

Introduce you to the body that is responsible for the international nomenclature on which most tariff documents are based

✓

Provide you with an overview of the structure of the international nomenclature

✓

Provide you with an introduction to the classification rules that are contained within the international nomenclature.

Part 1

The Harmonized System

Part 1 provides an overview of the international classification order on which nearly all national or common (in the case of a Customs union) tariff documents are based. It covers the following topics:

■        The Harmonized System

■        History of the nomenclature

■        Development of the Harmonized System

■        Harmonized System (HS) Convention

■        Harmonized System Nomenclature

■        Harmonized System Committee (HSC)

■        Review Sub-Committee (RSC)

■        The Secretariat

■        Harmonized System Explanatory Notes (HSEN)

■        Sixth review

Part

2

The Classification Structure

Part 2 covers the structure of the headings, subheadings and legal notes, which are the components that make up the Harmonized System Nomenclature. Part 2 contains the following topics:

■        Sections and chapters of the nomenclature

■        Heading list

■        Structure of a chapter – Legal notes

■        Structure of a chapter – Headings/subheadings

■         Significance of the dashes

Part

3

The Classification Process

Part 3 explains the classification process. It focuses on the identification of goods and the Interpretation Rules by which goods are classified under the Harmonized System. Part 3 contains the following topics:

■        Identification of Goods

■        Interpretation Rule 1

■        Interpretation Rule 6

■        Interpretation Rules 2 to 5

Part

4

The classification of parts and accessories

Part 4 explains the classification of parts and accessories. It concentrates on distinguishing parts from accessories and on the classification principles and legal note provisions that apply to such goods under the Harmonized System. Part 4 contains the following topics.

Part 4 explains the classification process. It focuses on the identification of goods and the Interpretation Rules by which goods are classified under the Harmonized System. Part 4 contains the following topics:

■   Distinction between Parts and Accessories

■   What is a Part? What is an Accessory?

■   Classification of Parts and Accessories

■   Legal Note Provisions

✓

Describe the purpose, structure, and governance of the Harmonized System

✓

Explain the obligations and rights of Contracting Parties under the HS Convention

✓

Identify the components of the HS Nomenclature and the role of the Explanatory Notes

Component

Description

Chapters (2-digit)

Broad product category. Chapters are generally groupings of similar or related headings.

Headings (3- and 4-digit)

The primary level of classification. Headings group related goods together. The first two digits indicate the chapters.

Subheadings (5- and 6- digit)

Subdivisions of most headings. They give separate treatment or identification to the more commonly traded goods within each heading.

01 International uniformity

Achieve international uniformity in the classification of goods.

02 Trade statistics

Provide for the collection, analysis and comparison of world trade statistics.

03 Common coding system

Provide one international system for coding, describing and classifying goods that can be used by freight forwarders, insurance institutions, transport associations, importers and exporters.

04 Ongoing adaptability

Provide an updated document that can be readily amended to respond to technological and environmental protection developments and changes in international trade patterns.

01 Customs tariff determination

ensuring goods are classified correctly so that duties and taxes are accurately assessed.

02 International trade statistics

providing a consistent global framework for collecting and analyzing trade data used in policymaking and economic planning.

03 Regulatory compliance

supporting the application of trade-related laws, including environmental, health, and phytosanitary controls.

04 Rules of origin

helping determine whether goods qualify for preferential duty rates under trade agreements or meet national anti-dumping requirements.

05 Trade negotiations

offering a standardized reference point for resolving classification disputes and structuring tariff commitments.

06 WTO tariff schedules

forming the basis for countries’ bound tariff commitments under the multilateral trading system.

Example: Misclassification as a major compliance risk

The Auditor General of Canada reported that roughly 20% of goods imported during the 2015–16 fiscal year were misclassified — a reminder that even well-resourced administrations face significant challenges in this area. For logistics providers, these errors have obvious consequences: delays, added costs, and the potential erosion of reputational integrity and client trust.

200+

Countries plus the EU using the HS

98%

of world trade covered

163

Contracting Parties to the HS Convention

01 Brussels Tariff Nomenclature

Established the Brussels Tariff Nomenclature (BTN) as a common framework for the classification of goods.

02 Customs valuation

Set out an international convention concerning the valuation of goods for Customs purposes.

03 Customs Co-operation Council

Established the Customs Co-operation Council (CCC), the organization that would later become the World Customs Organization (WCO).

Based on CCCN

Japanese Customs Tariff

Built using CCCN as its structural basis.

Independent

United States Tariff Schedule

Developed separately from the CCCN framework.

Independent

Standard Transportation Commodity Code

Developed separately from the CCCN framework.

Influential

Standard International Trade Classification (SITC)

Shaped the emerging need for a more harmonized global system.

01 The CCCN

, which provided the structural core of the new nomenclature.

02 The Standard International Trade Classification (SITC)

, which contributed structural and statistical elements.

03 Various national and sector‑specific classification systems

, which provided additional input and practical detail.

Part

What it contains

20 Articles

The procedures for running the Convention.

Annex (the Nomenclature)

Headings and subheadings (goods' descriptions and numerical codes), legal notes, and rules for the classification of goods.

Texts & codes

May not be amended in any way that changes scope or order of headings/subheadings

Domestic law amendments

Permitted only where necessary to give effect to HS. It must not affect scope

Additional subdivisions

Allowed in its domestic tariff for goods that are not given separate status in the HS Nomenclature, but only below the existing HS subheading level (e.g. 7th/8th digit)

HS itself

Cannot be changed by a Contracting Party — only the HS Committee may amend

Article 4

Developing countries may initially participate at 4-digit level only

Article 5

Developed country Contracting Parties must provide technical assistance when able

01 All 4-digit headings

Apply every 4-digit heading in the Nomenclature, at minimum.

02 All level 4 texts

Apply all Section Notes, Chapter Notes, and Interpretation Rules 1 to 5.

03 Best-efforts undertaking

Commit to making best efforts toward applying the full system. There is no obligation to complete this within a fixed period.

04 Five-year target

Aim to apply the complete System within five years of the Convention entering into force for them.

Note:

Where a developing country chooses not to apply a 5-digit subheading, that digit must be designated '0'. Where a 6-digit subheading is not applied, those digits must be designated '00'.

Note: Classification Divergences

Where classification divergences are brought directly to the attention of the Secretariat, the facts will be confirmed by consulting the Member administration(s) concerned. If it is found that there is a divergence of opinion, the matter may be referred to the Committee in accordance with the normal procedure.

Goods relegated ↓

Under the CCCN: Described within their own headings.

Under the HS: Moved into residual headings.

Why: Overtaken by new technology; no longer a major contributor to reporting patterns within international trade.

Goods elevated ↑

Under the CCCN: Usually classified within residual headings.

Under the HS: Given their own specific descriptive heading or subheading.

Why: Became a more regular feature within international trading circles.

Note: 2022 version

The Nomenclature comprises some 5,000 groups of goods identified by a 6-digit code. We will go into greater detail of the structure of the Nomenclature in Part 2.

1806.32

Chapter

First two digits — broad product category (here: Cocoa and Cocoa Preparations).

1806.32

Heading

Next two digits — more specific product grouping within the chapter.

1806.32

Subheading

Final two digits — the most detailed international classification.

Who can attend

Voting rights

Contracting Parties

One vote each.

Contracting Parties that are EU members

One single vote between them, cast in the name of the European Union.

WCO members that are not Contracting Parties

Attend as observers. May take part in discussions but may not vote.

01 Guidance documents

Prepares Explanatory Notes, Classification Opinions, and individual formal advice as a guide to the interpretation of the HS.

02 Recommendations

Prepares recommendations that secure uniformity and transparency in the HS's interpretation and application.

03 Information sharing

Collates and circulates information on the application and maintenance of the HS.

Step 1 — Direct negotiation between parties

Step 2 — Referral to the Committee

Step 3 — Referral to the Council (rare)

Step 4 — Right of appeal

Amend Explanatory Notes only

Amend the legal texts

Aid to interpretation; the official interpretation of the HS.

The legal texts themselves: headings, subheadings, and legal notes.

Sometimes enough on its own to achieve the desired objective.

Required where the scope of a heading or subheading needs to change.

Does NOT alter the scope of the headings or subheadings concerned.

DOES alter the scope of the headings or subheadings concerned.

01 Public health visibility

New and revised subheadings make critical health emergency supplies easier to identify in the nomenclature.

02 Environment and circular economy

Amendments aligned with the Basel, Rotterdam, and Stockholm (BRS) Conventions sharpen distinctions for hazardous waste and support sustainable materials management.

Example: Vaccine structure overhaul

Splitting human vaccines into their own heading improves clarity and supports global supply-chain control and health-response mechanisms.

Example: e-waste under heading 85.49

New and revised subheadings under heading 85.49 now differentiate between electrical and electronic waste containing hazardous components and other e-waste, reflecting Basel Convention controls on transboundary and traceability movements of such materials. Further changes improve transparency for plastic products, including single use items, supporting pollution reduction policies and sustainable materials management.

01 Structural changes

Where headings or subheadings have been split, merged, deleted, or renumbered.

02 Code correspondence

How a code in an older HS edition corresponds to a code in the new edition.

03 Change type

Whether changes are structural (affecting classification) or editorial (no change in scope).

Example 1: Drone (HS 2017 → HS 2022)

A Jamaican exporter ships a consumer drone (unmanned aerial vehicle) to Dominica. Both states are CARICOM members, but while the CARICOM Common External Tariff (CET) is officially based on HS 2022, several member states, including Dominica, have not yet transitioned from HS 2017.

Exporter A (Jamaica — HS 2022)

Jamaica uses HS 2022. The drone is correctly classified as 8806.22 (unmanned aircraft with a maximum take-off weight exceeding 250 g but not exceeding 7 kg). This code appears on the commercial invoice, airway bill, and CARICOM certificate of origin.

Importer B (Dominica — HS 2017)

Dominica still uses HS 2017. Heading 88.06 does not exist in that edition, so the same drone must be classified under a code that was available at the time. Two options are defensible: 8802.20 (aeroplanes and other aircraft, unladen weight not exceeding 2,000 kg), or 8525.80 (television cameras, digital cameras and video camera recorders), if the drone’s camera function is considered primary. The correct choice depends on how Dominica’s customs authority interprets the product’s essential character.

Where importers may get caught out

• Dominica’s customs clearance system rejects 8806.22, it is not a valid HS 2017 code.
• The importer may assume the exporter has misclassified the goods.
• Selecting the wrong HS 2017 fallback (8802.20 versus 8525.80) can lead to duty or VAT errors, clearance delays, or post-clearance audit findings.
• The underlying problem is HS edition misalignment, not a classification mistake by either party.

Quick comparison

The real issue here is HS edition misalignment, not an error by either party. WCO correlation tables allow the importer to identify the correct HS 2017 successor code and resolve the mismatch at clearance.

Example 2: Mussels (HS 2022 → HS 2028)

Under HS 2022, subheading 0307.31 covers mussels (Mytilus spp., Perna spp.) that are live, fresh or chilled, while 0307.32 covers frozen mussels. In HS 2028, these are reorganized:

• 0307.33 – Live mussels
• 0307.34 – Fresh or chilled mussels
• 0307.35 – Frozen mussels

This shows how a single subheading in one HS edition can split into multiple new subheadings in the next, reflecting finer distinctions in product condition.

This example shows how HS 2022 subheadings for mussels (live, fresh/chilled, frozen) are reorganized in HS 2028. Subheading 0307.31 (live, fresh or chilled) splits into two new subheadings (0307.33 and 0307.34), while subheading 0307.32 (frozen) transfers entirely to 0307.35. This illustrates how correlation tables track splits, transfers and structural changes between HS editions.

Key point

Correlation tables help explain why a supplier’s HS code may differ from the importing country’s tariff and why DHL staff must always classify using the HS version in force in the country of importation.

01 Usage surveys

Surveys to assess how HS documents such as the Explanatory Notes are being used.

02 Transparency surveys

Surveys to assess how widely HSC classification decisions are applied, gauging the transparency of decision-making.

03 Publishing decisions

Using the WCO website to publish classification decisions and disseminate information.

04 Inter-committee work

Co-operation with bodies such as the Technical Committee on Rules of Origin on HS-aligned rules of origin.

05 HS training

The application and delivery of HS training.

Note:

The Review Sub-Committee operates by consensus. If consensus cannot be reached on a particular issue, the differing views (together with their rationales) are forwarded to the Harmonized System Committee.

01 Scope of headings

Commentary on what each heading (and where relevant, subheading) covers.

02 Meaning of legal notes

Commentary on what the legal notes mean and how to apply them.

03 Meaning of Rules

Commentary on what each Interpretation Rule means and how to apply it.

04 Included / excluded products

Lists the main products covered by each heading and those that are excluded.

05 Technical descriptions

Describes the appearance, characteristics and uses of goods.

06 Identifying goods

Provides guidance for identifying goods in trade.

1

The chapter title (reproduced).

2

The legal notes, with any explanation.

3

The legal text of the heading, together with any subheadings.

4

The corresponding explanations.

Note:

Every heading in the HS has a corresponding Explanatory Note. Where Explanatory Notes also exist for subheadings, a (+) sign appears after the text of the heading.

03.09

Flour, meals and pellets of fish, crustaceans, molluscs and other aquatic invertebrates, fit for human consumption.

24.04

Products containing tobacco, reconstituted tobacco, nicotine, or tobacco or nicotine substitutes, intended for inhalation without combustion; other nicotine-containing products intended for the intake of nicotine into the human body.

84.85

Machines for additive manufacturing, commonly referred to as 3D printers.

85.24

Flat panel display modules.

85.49

Electrical and electronic waste and scrap.

88.06

Unmanned aircraft, commonly referred to as drones.

03.09

Flour, meals and pellets of fish, crustaceans, molluscs and other aquatic invertebrates, fit for human consumption.

24.04

Products containing tobacco, reconstituted tobacco, nicotine, or tobacco or nicotine substitutes, intended for inhalation without combustion; other nicotine-containing products intended for the intake of nicotine into the human body.

84.85

Machines for additive manufacturing, commonly referred to as 3D printers.

85.24

Flat panel display modules.

85.49

Electrical and electronic waste and scrap.

88.06

Unmanned aircraft, commonly referred to as drones.

0410.10

Edible insects (separate provision).

0709.52–0709.55

Certain mushrooms.

0709.56

Truffles.

4403.42

Tropical wood teak (separate provision).

4412.41–4412.49

Certain types of laminated veneered lumber.

4421.20

Coffins.

8428.70

Industrial robots.

8543.40

Electronic cigarettes and similar personal electric vaporizing devices.

8708.22

Front windscreens, rear windows and other windows complying with Subheading Note 1 to Chapter 87.

9406.20

Modular building units, of steel.

Note 3 to Chapter 3

Headings 03.05 to 03.08 do not cover flours, meals and pellets fit for human consumption. They are classified within heading 03.09.

Note 6 to Chapter 4

Defines "insects" for heading 04.10: edible non-living insects (whole or in parts, fresh, chilled, frozen, dried, smoked, salted or in brine) and flours and meals of insects, fit for human consumption. Edible non-living insects otherwise prepared or preserved are excluded (generally Section IV).

Note 5 to Chapter 7

Heading 07.11 applies to vegetables treated solely to ensure provisional preservation during transport or storage (e.g. sulfur dioxide gas, brine, sulfur water or other preservative solutions), provided they remain unsuitable for immediate consumption. A similar note applies to heading 08.12 for fruit in Chapter 8.

Notes 2 and 3 to Chapter 24

Relate to the goods of heading 24.04 and the meaning of "inhalation without combustion".

Note 4 to Section VI

Where a product fits one or more Section VI headings by name or function and also fits heading 38.27, classify under the name/function heading, and not under 38.27.

Note 15 to Section XI

Subject to Note 1 to Section XI, textiles and garments incorporating chemical, mechanical or electronic components for additional functionality (built-in or within the fiber or fabric) are classified in their respective Section XI headings, provided they retain the essential character of Section XI goods.

Note 3 to Chapter 58

For heading 59.03, defines "textile fabrics laminated with plastics".

Note 6 to Section XVI

Defines "electrical and electronic waste and scrap".

Note 5 to Chapter 84

For heading 84.62, defines "slitting line" and "cut-to-length line" for flat products.

Note 10 to Chapter 84

For heading 84.85, defines "additive manufacturing" (3D printing).

Note 5 to Chapter 85

For heading 85.17, defines "smartphones".

Note 7 to Chapter 85

For heading 85.24, defines "flat panel display modules".

Note 11 to Chapter 85

For heading 85.39, defines "light-emitting diode (LED) light sources".

Subheading Note 1 to Chapter 87

Describes the vehicle windscreens and windows covered by subheading 8708.22.

Note 1 to Chapter 88

For Chapter 88, defines "unmanned aircraft".

Subheading Note 2 to Chapter 88

For subheadings 8806.21–8806.24 and 8806.91–8806.94, defines "maximum take-off weight".

Note 6 to Chapter 95

For heading 95.08, defines "amusement park rides", "water park amusements" and "fairground amusements".

Note 2 to Chapter 97

Restricts the coverage of heading 97.01 in respect of mosaics.

01 Certainty on correct HS code

02 Predictable duty and tax outcomes

03 Reduced clearance delays

04 Fewer disputes with Customs

05 Smoother repeat shipments

Example:

A customer repeatedly ships a specialized electronic sensor. Each shipment runs into the same Customs friction. An advance ruling breaks the cycle.

Key message: Advance rulings are a trade facilitation tool. When used correctly, they reduce friction, improve predictability, and protect manufacturers and exporters from unnecessary disputes.

✓

Navigate the structure of the Harmonized System Nomenclature using sections, chapters, headings, subheadings, and legal notes

✓

Identify goods for classification using samples, descriptive literature, and industry inquiries to locate candidate areas of the Nomenclature

A listing of Sections and chapters of the Nomenclature is available in the Study Guide Supplement.

Example: classifying fresh apples

To classify fresh apples, the classifier:

·    examines the 21 sections of the Nomenclature

·    decides the goods are classified somewhere within Section II, as they are a vegetable product

·    examines the chapters within Section II

·    decides if the goods are classified within Chapter 8, as they are edible fruit.

Note:

Chapter 77 is not an operating chapter. It contains no goods descriptions, classifications, or legal notes. The chapter resulted from an amalgamation of chapters that previously existed within the CCCN Nomenclature, and the Harmonized System Committee has reserved it for future use.

'Type' chapters
Chapters 64 to 66 and 84 to 97

'Materials' chapters
Chapters 1 to 63 and 67 to 83

Also called 'specific description' chapters. The product to be classified is specifically covered or mentioned in its own right within a particular chapter.

Each chapter deals with a particular material and its products, or related groups of materials or substances and their products.

Headings describe particular or specific machinery or articles.

Products derived from a particular raw material are listed in the same chapter with that material.

Classifications of similar types of articles are normally grouped together.

Headings progress from raw materials at the beginning, through intermediate forms, to the finished product at the end.

Prime example: Chapter 84 (machinery and mechanical appliances).

Prime example: Chapter 39 (plastics and articles thereof).

Example ‘Type’ chapter: Chapter 84 (machinery and mechanical appliances)

Why this matters for classifiers

If you are looking for the classification of, for example, machine tools for working metal, and you find heading 84.65 (machine tools for working wood or plastics), you may be assured that you are reasonably close to the classification you are looking for.

Note:

It is established classification practice to look for an answer within the "type" chapters before considering the "materials" chapters. In other words, classify a product by what it is, rather than by what it is made of.

For example, carbon electrodes are specifically mentioned in heading 85.45. They are classified within that heading rather than in the headings of Chapter 68 or Chapter 25, even though those chapters in part cover the material the electrodes are made of.

Example: classifying fresh apples

Step 1.  Use the chapter/section list to identify the chapter → Chapter 8.

Step 2.  Examine the headings list for Chapter 8 → fresh apples appear at heading 08.08.

A listing of all the headings is available in the Study Guide Supplement.

...for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes...

01 Give direction

Direct goods into or out of particular areas of the Nomenclature.

02 Define scope

Set what headings and subheadings cover.

03 Interpret terms

Explain the meaning of particular words or phrases.

Type

Scope and effect

Notes

Apply at section or chapter level. They guide the classification of goods at the heading level.

Subheading notes

Apply at the level of subheadings within a section or chapter. They guide the comparison of subheadings.

Example: Where to find notes and subheading notes – Chapter 85

Chapter 85 currently contains 12 Notes and 5 Subheading Notes. For example,

·    Note 1 relates to the complete chapter.

·    Note 4 begins ‘Heading 85.09 covers only…’

·    Note 12 begins ‘For the purposes of headings 85.41 and 85.42…’

·    Subheading Note 1 begins ‘Subheading 8525.81 covers only…’

Both Notes and Subheading Notes may also be found at the beginning of sections.

Note:

Regardless of whether they are Notes or Subheading Notes, or whether they are located at the beginning of chapters or sections, legal notes perform two important functions. They:

·    provide or give directions

·    define terms.

01 Notes of exclusion

The most common. Prevent access to areas of the Nomenclature and point the classifier to where the goods actually belong.

02 Notes of inclusion

Less common. Bring goods into a heading where the inclusion may not be obvious from the heading text alone.

03 Notes of extension

Widen the scope of a heading to cover additional goods that fit its purpose.

04 Notes of restriction

Second most common after exclusion. Limit the scope of a heading or chapter to only specified goods.

Example: Note of exclusion

They point you to where the goods do belong.  A feature of exclusion notes is the reference in brackets, usually at the end of the sub note.

Example.  Note 1(h) to Section XVI reads ‘Drill pipe (heading 73.04)’.

The bracketed reference is normally a heading, but it may also be a section, a chapter, or a direction to classify the product according to its constituent material.

Example: Note of inclusion – Note 2 to Chapter 8 

Note 2 to Chapter 8 directs that chilled fruits and nuts are to be classified within the same headings that cover fresh fruit and nuts.

Example: Note of extension – Note 2 to Chapter 6

Note 2 to Chapter 6 relates to the scope of headings 06.03 and 06.04.

Both headings already cover goods that are ‘…of a kind suitable for bouquets or for ornamental purposes…’.

Note 2 extends the scope of the two headings to include complete bouquets, floral baskets or wreaths.

Example: Note of restriction

‘Throughout this Nomenclature…’

Across the entire Nomenclature.

Note 3 to Section XV directs ‘Throughout this Nomenclature, the expression “base metals” means…’

‘In this Chapter [or Section] …’

Only within the specified chapter or section.

Note 1 to Section II directs ‘In this Section the term “pellets” means…’

‘For the purposes of heading…’

Only within the named heading.

Note 4 to Chapter 70 directs ‘For the purposes of heading 70.19, the expression “glass wool” means…’

Example: Definitional notes – how a “suit” is defined

For example, Note 3 to Chapter 61 (and 62) defines a suit. The trade meaning and the Nomenclature meaning are not the same.

 Legal notes have only that meaning, which is expressed in them, no other.

Note:

There are many instances of legal notes having nomenclature-wide coverage, and some tend to be hidden away. The Subheading Note 1 to Section XI is one example.

If you are unaware of their existence, you may encounter problems. As classifiers, you should familiarize yourselves with all legal notes.

Heading

→

5-figure subheading

→

6-figure subheading

09.01

Chapter (09) + heading number (01)

→

0901.1

One-dash subdivision of the heading

→

0901.11

Two-dash subdivision of the 5-figure code

Note:

Heading 09.03 has not been subdivided. For now, the Harmonized System Committee has seen no reason to require more detailed subdivision of the heading. Because the HS is a 6-figure system, the code is written as 0903.00.

1

Stay within scope

A subdivision cannot accommodate products outside the scope of the parent text.

·    the content of the 5-figure subheadings cannot exceed the scope of the heading that has been subdivided

·    the content of the 6-figure subheadings cannot exceed the scope of the 5-figure subheading that has been subdivided.

2

Exhaust the parent

The subdivisions must exhaust the parent heading (and/or subheading where appropriate). Hence the requirement in many subheadings for a residual classification, usually referred to as ‘Other’.

3

Mutually exclusive

Each subdivision at the same level must be mutually exclusive of the others.

Example: Heading 09.01 broken down (coffee)

Heading 09.01 has been subdivided into 5- and 6-figure subheadings. The 5- and 6-figure subheadings are largely based on the Standard International Trade Classification (SITC).

Reading the format

·    Heading 09.01 contains three 5-figure subheadings (0901.1, 0901.2 and 0901.90) for coffee that is not roasted, roasted coffee and other.

·    The subheading 0901.90 is a residual subheading. It picks up everything that is classified within heading 09.01 that is not classified within the two previous 5-figure subheadings, (that is, 0901.1 and 0901.2). The normal drafting protocol is to signify the residual subheading with the number ‘9’ (or ‘99’). However, there are exceptions.

·    Note that neither 5-figure subheadings 0901.1 nor 0901.2 are set out in that format, but are left blank, whereas subheading 0901.90 is listed as such and has a zero (‘0’) as the sixth figure. Examination of these subheadings reveals that both subheadings 0901.1 and 0901.2 are further subdivided into 6-figure subheadings, whereas subheading 0901.90 is not.

·    The HS is an international six-figure classification system. The final figure in any particular classification hierarchy is always expressed as six figures.

Example continued: Heading 09.01 broken down (coffee)

In heading 09.01, both subheadings 0901.1 and 0901.2 are further subdivided into:

·    subheadings 0901.11 and 0901.12

·    subheadings 0901.21 and 0901.22

for goods being ‘not decaffeinated’ and ‘decaffeinated’.

Choosing 0901.12 (decaffeinated) just because the word “decaffeinated” appears there would ignore the fact that the coffee may be roasted. Roasted decaffeinated coffee belongs at 0901.22.

Total headings & subheadings

Approximately 5,000.

Mandatory use

Contracting Parties are required to use all headings and subheadings, subject to the conditions in Article 4.

Exception

Heading 27.16 is an optional heading.

Authority to amend

Only the Harmonized System Committee can make amendments.

Example:

Heading 09.03, which relates to mate (a traditional South American plant (Ilex paraguariensis) used to make a caffeinated infusion similar to tea), is not further subdivided. If a Contracting Party wished to subdivide the heading, the classification number within their national structure would be 0903.00.[XX], with the ‘XX’ signifying the national eight-digit subheading structure.

–

5-digit subheading

A single dash marks the first level of subdivision within a heading.

- -

6-digit subheading

Two dashes mark the next level down, belonging to a single-dash parent.

Note: Watch out for “other”

Because the HS provides a classification for all goods in international trade, many headings include residual subheadings, normally denoted by the word “other”. As the word “other” appears frequently, care must be taken to ensure that the correct “other” is selected within the correct part of the structure. Classification into an “other” subheading should only occur once all more specific descriptions have been systematically considered and excluded. “Other” is the final outcome of a structured, step by step classification process, not a default option. Misclassification often occurs when an “other” subheading is selected prematurely, before the specific alternatives have been properly assessed. 

1

Within a heading, compare only the one-dash subheadings as these form the first level of subdivision.

2

Once you have identified the correct one-dash subheading, check whether it is further subdivided into two-dash subheadings.

3

If it is, compare only the two-dash subheadings that fall under that specific one-dash subheading.

4

Do not compare two-dash subheadings belonging to a different one-dash group.

Example 1: How the dash hierarchy looks in heading 95.06

This diagram illustrates how the Harmonized System uses dashes to show the relationship between subheadings. A single dash (–) identifies a 5‑digit subheading, while two dashes (- -) identify a 6‑digit subheading that belongs only to the one‑dash group directly above it. 

In heading 95.06, the subheading 9506.1 is subdivided into 9506.11 and 9506.19, both shown with two dashes to indicate their dependent relationship. The separate one‑dash subheading 9506.9 forms a different group and must not be compared with the two‑dash entries under 9506.1.

This hierarchical structure is essential for accurate classification. It ensures that comparisons are made only within the correct level and prevents the common error of selecting the wrong residual “other” subheading. The diagram visually reinforces this rule by grouping the two‑dash entries under their parent one‑dash subheading and separating the unrelated one‑dash “other” subheading.

Example 2: Applying the dash hierarchy to classify a baseball bat

HS Nomenclature - Specimen Heading 95.06

Now apply the structure shown in Example 1. A baseball bat is classified within heading 95.06 as an article or equipment for sports or outdoor games. Work down the hierarchy one dash level at a time.

A baseball bat does not fit any of the named categories, so the only option is the residual subheading 9506.9.

A baseball bat is not equipment ‘for general physical exercise, gymnastics or athletics’, so the answer is subheading 9506.99.

Classification.  Baseball bat → 9506.99

✓

Apply the identification process to describe goods independently of the Nomenclature using appropriate information sources.

✓

Identify all relevant sections, chapters, and headings within the Nomenclature where goods may be classified.

✓

Apply Interpretation Rule 1 to determine a 4-digit heading using the terms of headings and relevant Section or Chapter legal notes.

✓

Apply Interpretation Rule 6 to determine a 5- or 6-digit subheading using the terms of subheadings and relevant Section or Chapter legal subheading notes.

✓

Acquire an understanding of Interpretation Rules 2 to 5.

01 Identify the goods

Describe the goods independently of the Nomenclature, based on what they actually are.

02 Locate areas

Identify sections and chapters where the goods may be covered.

03 Select headings

Identify and select appropriate headings within those areas.

04 Classify at heading level

Apply Interpretation Rule 1 and any relevant legal notes.

05 Classify at subheading level

Apply Interpretation Rule 6 and any relevant subheading notes.

Note: Why identification matters

If the goods are not correctly identified, the classifier cannot reach the correct classification answer. Everything in this Part depends on getting identification right.

Question

What it tells you

What are the goods?

The basic description and identity of the article.

What function do the goods perform?

What the goods do or what they are used for.

How do the goods perform their function?

The mechanism, process, or method of operation.

What are the goods made of?

Materials, which may point to 'materials' chapters.

Who sells, buys or uses the goods?

The market, end-user, or commercial context.

Note: Always work from samples where you can

Classifiers should never rely solely on invoice descriptions. Always try to obtain a sample of the goods.

Note:

The important thing to remember is that classifiers must be able to identify the goods that are to be classified. Guesswork has no place in the HS classification process; decisions must be based on objective characteristics and adequate information. If a sample cannot be obtained, the IDM must be sufficient to support an accurate assessment. If you are not satisfied that you can make a reliable determination, it may be necessary to go back to the importer or manufacturer to request further information. 

01 Searchable HS databases

Look up Harmonized System codes by keyword, description, or product category.

02 National tariff schedules

View duty rates and tariff structures applicable in a specific country.

03 Explanatory notes

Access official guidance that clarifies how headings and subheadings apply.

04 Classification guides

Worked examples of how common goods have been classified by authorities.

05 Binding rulings access

Search prior decisions such as EU Binding Tariff Information(BTI) and US CROSS rulings issued on past importations.

06 AI-assisted search

In some cases, machine-learning search functions help locate likely classifications.

Note: AI tools

Artificial intelligence tools are increasingly being developed to assist with tariff classification. These systems typically analyze product descriptions, technical specifications, or historical classification data to suggest possible HS codes. While such tools can be useful for initial orientation, their maturity and reliability vary significantly across providers. Most AI systems are still dependent on the quality of the input data, and many struggle with ambiguous descriptions, multi-material goods, or items requiring technical interpretation under the General Rules of Interpretation. AI classification tools may therefore provide a helpful indication or time‑saving starting point, but they are no substitute for a human classifier who retains ultimate responsibility for correctly applying the HS rules and following due process on each occasion. 

Example:  

A shipment arrives described only as “plastic fittings.” Using a national or supra‑national online tariff tool, for example, the EU’s TARIC to compare headings and legal notes, or the US CROSS ruling database to review how similar goods have been classified, the classifier can see the types of information Customs has relied upon in previous cases. This helps them ask the right questions and narrow down the correct classification.

Note: Online tools are aids, not authorities.

They support classification, but must always be used alongside the HS structure, the Interpretation Rules, and the physical characteristics of the goods themselves and the condition in which they are imported.

•     Gather information about how the goods work in their operating environment.

•     Understand the function, materials, and use of similar goods already installed.

•     Treat what experts say as an aid to your own assessment.

•     Rely on experts without recognizing they may have their own biases.

•     Expect experts to describe goods in Nomenclature terms; in some cases, even trade experts lack sufficient knowledge of the Nomenclature.

•     Ask experts whether goods fall within a particular classification.

42 Chapter 42

Articles of leather, saddles, harness, travel goods, handbags, and articles of animal gut.

83 Chapter 83

Miscellaneous articles of base metal: padlocks, safes, buckles, electrodes, paper clips, bells, filing cabinets.

96 Chapter 96

Miscellaneous manufactured articles: pens, smoking pipes, brushes, combs, stamp pads, tailors' mannequins.

Case study: Identifying a sports bag

The following case study runs through Part 3. It shows how the classification process comes together.

Step 1: Independent assessment

The assessment is to be made independently of the Nomenclature and should start with the basics:

•    What are the goods?

•    What function do the goods perform?

•    How do the goods perform their function?

•    What are the goods made of?

•    Who sells, buys or uses the goods?

Most of this information can be obtained by examining samples or descriptive literature, together with the classifier’s own general knowledge. With goods such as these, it should be easy for the importer to supply a sample, however, it may be necessary to consult trade experts or trade journals or publications such as encyclopedias. Again, classifiers should be aware of the limitations of trade experts, as discussed above.

In making the assessment, you should bear in mind goods must be assessed in the condition they are imported, having regard to their inherent features only.

Let’s examine our sports bag. Let’s say an examination shows the following:

•    it is made of woven cotton canvas

•    it has motifs on the side to indicate sporting activities

•    accompanying advertising indicates its purpose is to carry sporting attire such as sports shoes, a tracksuit, a change of clothes and a towel, to sporting venues or a gymnasium.

Step 2: List possible areas of the Nomenclature

Once satisfied that an independent assessment has been made, the next step is to list all the possible areas of the Nomenclature where the goods may be classified. This list should include all the headings that are appropriate to the goods description, including any headings that relate to the material from which the goods are made - the ‘materials’ areas of the Nomenclature. The list may include headings, chapters, sections, or all three.

The ‘must know’ chapters (42, 83 and 96) should also be automatically included, until their contents become familiar.

After an examination of the contents of the Nomenclature, the following becomes apparent:

•    Equipment for sports is classified within heading 95.06.

•    Travel bags and similar containers are classified within heading 42.02.

•    Section XI covers textile articles, in particular:

o   The headings of Chapter 52 cover cotton and fabrics but not articles thereof. The headings of Chapter 52 may therefore be disregarded.

o   The headings of Chapter 62 cover cotton apparel, other than knitted apparel. The subject goods are not articles of apparel. The headings of Chapter 62 may therefore be disregarded.

o   The headings of Chapter 63 cover other made-up textile goods. In particular, heading 63.07 covers other made-up articles.

•    The headings of two of the ‘must know’ chapters (83 and 96) are not relevant.

Having gone through those steps, three identified headings - namely 42.02, 63.07 and 95.06 - are left for consideration when proceeding to the next step in the classification process.

The next step is to obtain a 4-figure classification for the goods, in accordance with Interpretation Rule 1. We will look at this shortly.

01 Identify the goods

Describe the goods independently of the Nomenclature, based on what they actually are.

02 Locate areas

Identify sections and chapters where the goods may be covered.

03 Select headings

Identify and select appropriate headings within those areas.

4-digit heading

First. A product must be classified at this level before moving down.

5-digit (1-dash) subheading

Only after the heading is determined. Compared only with other 5-digit subheadings in the same heading.

6-digit (2-dash) subheading

Only after the 5-digit subheading is determined. Compared only with other 6-digit subheadings under the same 5-digit subheading.

Note: No peeking down the hierarchy

At each step in the classification process, no account is taken of the terms of any lower level subdivisions. This principle applies without exception throughout the Harmonized System.

1.    The titles of Sections, Chapters and sub‑Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions.

01 Titles are for reference only

Section, chapter, and sub-chapter titles are a guide. They have no legal bearing on classification.

02 Classify by headings and legal notes

Classification is determined by the terms of headings and any relative Section or Chapter notes, the primary classification factors.

03 Then look at the other Rules

Unless prevented by the headings or notes, regard must be had to the other Interpretation Rules.

The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only;...

Example: “Base metals and articles of base metals"

The title of Section XV is: 'Base metals and articles of base metals.'

This title does not mean that every article of base metal is classified in the headings of Chapters 72 to 83 and nowhere else.

Many articles of base metal are classified in other sections, machinery in Section XVI, transport equipment in Section XVII, furniture and toys in Section XX.

Consider the classification of a magnet. A magnet is an article of iron or steel, so prima facie, it could fall within the headings of Chapter 73.

But magnets are classified within heading 85.05, which covers:

Electro-magnets, permanent magnets, and articles intended to become permanent magnets after magnetisation, along with electro-magnetic or permanent magnet chucks, clamps, brakes, and similar holding devices.

Similarly, the title of Chapter 85 does not mean every piece of electrical machinery sits in Chapter 85, much of it falls in Chapters 84, 85, and 90.

The titles are merely a good hint. They are not to be used for interpreting the Nomenclature.

...for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes...

Key point

The classification of goods in the Nomenclature, and in any national tariffs based thereon, is to be determined by reference to the 4-digit headings and the Section or Chapter Notes. They are the primary classification factors. This is the key point to Rule 1 and the key point to all classifications.

Example: read past the first words of heading 84.22

Heading 84.22 reads: Dish washing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labelling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages.

Five semicolons divide this heading into independent groups. There is no relationship between machinery for aerating beverages and the machinery that precedes it, even though both sit in heading 84.22.

Someone looking for the classification of aerating machines could miss this heading because the first words do not relate to those goods. Examine the entire text of a heading. Do not disregard a heading just because the initial product descriptions are not what you are looking for.

Example: heading 42.02 and material qualifiers

Heading 42.02 reads: Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; travelling-bags, insulated food or beverages bags, toilet bags, rucksacks, handbags, shopping bags, wallets, purses, map-cases, cigarette-cases, tobacco-pouches, tool bags, sports bags, bottle-cases, jewellery boxes, powder-boxes, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanised fibre or of paperboard, or wholly or mainly covered with such materials or with paper.

The heading relates to a variety of containers and is part of the structure of Chapter 42, which relates essentially to leather goods.

On the third line, after the words 'similar containers,' there is a semicolon.

•    The containers described after the semicolon must be made of certain materials (leather, plastic sheeting, textile, vulcanised fibre, paperboard).

•    The containers described before the semicolon have no such material qualifier.

What this means is that although goods such as travelling bags, shopping bags and sports bags, must be made of certain materials to be classified in heading 42.02, goods such as suitcases, spectacle cases and binocular cases, may be made of any material.

For example, an aluminium briefcase is classified within heading 42.02, not in the headings of Chapter 76, because briefcases sit in the first group, where material is not a constraint.

Note

The Harmonized System Committee uses a threshold to decide whether a commodity is described in its own right in the Nomenclature. To merit heading status, its value of trade must exceed US$100 million per annum. To merit subheading status, its value of trade must exceed US$50 million per annum.

21.06

'Food preparations not elsewhere specified or included.'

44.21

'Other articles of wood.'

84.79

'Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.'

Note: How to test against a residual heading

The classification of goods within residual headings is dependent upon those goods not being classified in headings that more specifically describe goods. The correct procedure to classify goods involving consideration of residual headings is not to compare residual headings with other more specific headings, but rather to ask the question, ‘Are the goods classified in the more specific heading?’ If the answer is ‘yes’, the goods are so classified, and there is no need to proceed to the residual heading. If the answer is ‘no’, the goods are classified within the residual heading.

01 They define terms

Legal notes can fix the meaning of a term for the purposes of a heading, for example, the dimensions of "pocket-size" for heading 84.70.

02 They direct classifiers

Legal notes point classifiers towards or away from particular areas of the Nomenclature.

Example: “pocket-size" is defined in Note 9 to Chapter 84

Note 9 to Chapter 84 directs: For the purposes of heading 84.70, "pocket-size" applies only to machines the dimensions of which do not exceed 170 mm x 100 mm x 45 mm.

An examination of heading 84.70 will reveal that the term ‘pocket-size’ relates to data recording, reproducing and displaying machines that have calculating functions.

Therefore, a data recording machine that incorporates a calculating function, for example, has to comply with the dimensions that are set out in Note 9, irrespective of any claim that the goods are ‘pocket-size’. If the product exceeds those dimensions, it will not fall within heading 84.70.

Example: Note 1(s) to Chapter 95 directs classifiers elsewhere

Heading 95.06 covers amongst other goods: ...equipment...for...sports...or outdoor games...

However, Note 1 to Chapter 95 excludes certain goods, which at first consideration, may have been thought classified within heading 95.06. Consider the classification of sports whistles, for example. Whilst heading 95.06 seems a logical classification, Note 1(s) excludes these goods from Chapter 95 and points to heading 92.08. The correct classification is therefore automatic.

Case study continued: Identifying a sports bag

Let’s continue with the classification of the sports bag.

In the initial phase, the goods were identified, having regard to their inherent features. Having done that, various areas of the Nomenclature were identified for consideration.

In line with the classification exercise being essentially a two-stage process, the next part of the task is to obtain a single 4-figure classification, by using the Interpretation Rules. What is now required is to examine the identified areas by virtue of the directives that are set out in Interpretation Rule 1.

Proceeding as above, the following is determined:

Heading 95.06       Although heading 95.06 covers equipment for sports, sports bags are excluded from the headings of Chapter 95 to heading 42.02, by virtue of Note 1(d) to Chapter 95.

Heading 63.07       Heading 63.07 covers other made-up textile articles.

                                   However, Note 1(l) to Section XI, which covers the goods of Chapter 63, excludes articles of textile materials of heading 42.02 from that section.

Heading 42.02       Travel bags and similar containers are classified within heading 42.02.

                                   The heading covers such goods of textile materials – e.g., cotton.

                                   Note 3 to Chapter 42 qualifies the requirements of classification within heading 42.02, but the Note has no bearing on the classification of the subject goods. There are no other legal notes to exclude the subject goods from the heading.

Conclusion: The subject goods are classified within heading 42.02, by virtue of Interpretation Rule 1.

Note: Standard practice for every heading

When considering a particular heading, go to the beginning of the relevant chapter and section and check whether any legal notes relate to the goods. If classifiers do not do this, and there are legal notes relating to the goods being classified, the goods will almost certainly be incorrectly classified.

...and, provided such headings or Notes do not otherwise require, according to the following provisions:

6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.

01 Terms and notes

Classify by the terms of subheadings and any related subheading notes.

02 Mutatis mutandis

Apply the other Interpretation Rules at subheading level, with 'headings' read as 'subheadings.'

03 Same-level comparison

Compare only subheadings at the same level: 5-digit with 5-digit, 6-digit with 6-digit.

04 Section and chapter notes apply

Relative Section and Chapter notes also apply, unless the context otherwise requires.

For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes…

Example: lead crystal wine glasses

The goods are classified within heading 70.13 (glassware of a kind used for table purposes) by Rule 1. The next step is to resolve the subheading.

Heading 70.13 has five 5-digit subheadings:

7013.10             - Of glass-ceramics

7013.2               - Stemware drinking glasses, other than of glass-ceramics

7013.3               - Other drinking glasses, other than of glass-ceramics

7013.4               - Glassware of a kind used for table (other than drinking glasses) or kitchen purpose other than of glass-ceramics

7013.9               - Other glassware

Wine glasses normally have stems, so the goods sit at 7013.2. That subheading breaks down to 7013.22 (Of lead crystal) and 7013.28 (Other).

7013.22                          -  -  Of lead crystal

7013.28                             -  -  Other

On face value the goods fall within 7013.22. But that subheading is subject to Subheading Note 1 to Chapter 70, which directs:

Regardless of any claim that the goods are lead crystal, the lead monoxide threshold must be met. Otherwise the goods are classified within 7013.28.

Ask the question

Are the goods classified in the more specific subheading?

↓

YES

Classify the goods within the more specific subheading. Stop.

NO

Classify the goods within the residual subheading.

…and, mutatis mutandis, to the above Rules,…

…on the understanding that only subheadings at the same level are comparable...

4-digit heading

Compared only with other headings (Rule 1)

↓

5-digit (1-dash) subheading

Compared only with other 5-digit subheadings in the same heading

↓

6-digit (2-dash) subheading

Compared only with other 6-digit subheadings under the same 5-digit parent

Note: Work down the hierarchy

Heading first, then 5-digit subheading, then 6-digit subheading, then any national subheadings. Do not choose a set of words just because they look like a fit; consider the context in which they appear at each level.

Example 1: a 12 kg laundromat washing machine

Consider the classification of a fully automatic washing machine, having a dry linen capacity of 12 kg, for use in laundromats [laundries].

The goods are classified within heading 84.50 (household or laundry-type washing machines) by Rule 1. The next step is to resolve the subheading situation.

Heading 84.50 includes the following subheading structure:

On first reading the goods look like they belong in 8450.11 (fully automatic machines). However, this classification is not correct.

Although 6-figure subheading 8450.11 relates to ‘fully automatic machines’, that subheading is qualified by 5-figure subheading 8450.1, which relates to machines having a dry linen capacity not exceeding 10 kg. 

The subject goods are classified within subheading 8450.20, which covers ‘machines, each of a dry linen capacity exceeding 10 kg’.

Subheading 8450.20 is to be compared with subheading 8450.1, both being 5-figure subheadings, not subheading 8450.11. Only descriptions at the same level may be compared.

Example 2: a domestic water filter

You are classifying a domestic water filter. A keyword search of the Nomenclature returns two places where filters are mentioned:

·    Heading 84.21 mentions “filtering...apparatus...”

·    Subheading 9002.20 mentions “filters”

Which classification is correct for the goods?

The answer is heading 84.21, which covers ‘…filtering and purifying machinery and apparatus for liquids…’

Subheading 9002.20 is qualified by the terms of heading 90.02, which covers ‘Lenses, prisms, mirrors and other optical elements,…’

Only compare at the same level. Subheading 9002.20 cannot be compared with heading 84.21. They are at different levels. Heading 84.21 may only be compared with other headings, such as heading 90.02.

Example: the word "suits" appears in multiple places

The word ‘suits’ is mentioned in a number of classifications within Section XI. One such example is subheading 6104.1.

Consider the classification of a shipment of suits. May they be classified within subheading 6104.1?

The answer is: only if they are women’s and are knitted or crocheted, because that is what heading 61.04 allows for.

May those goods be classified within subheading 6203.1?

The answer is: only if they are men’s and are not knitted or crocheted, because that is what heading 62.03 covers.

…For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.

Case study continued: the sports bag at subheading level

Let’s return to the classification of our sports bag. Under Rule 1, the sports bag was classified within heading 42.02. The final step is the 6-digit classification under Rule 6.

The subheading structure of heading 42.02 is:

An examination of the structure of Section VIII – don’t forget to look for any notes at the beginning of sections - and Chapter 42 reveal there are no subheading notes to contend with. As has been previously established, Note 2 to Chapter 42 qualifies the requirements of classification within heading 42.02, but the Note has no bearing on the classification of the subject goods. Classification will therefore depend on the terms of the subheadings.

The first task is to examine the descriptions that are set within the 5-figure subheadings. Again, they are the subheadings that are preceded by one dash, namely:

At this stage, there is no need to be concerned with any other descriptions.

Subheadings 4202.2 and 4202.3 may be disregarded. The competing 5-digit subheadings are 4202.1 and 4202.9. As 4202.9 is residual, classification within it depends on the goods not being classified within 4202.1.

Look carefully at the terms of heading 42.02. The wording of subheading 4202.1 is reflected in the first part of the heading. Sports bags are mentioned separately in the second part of the heading. This indicates that the authors of the Nomenclature do not consider sports bags to be a similar container to the goods of 4202.1.

Further evidence: the Explanatory Notes to heading 42.02 indicate that the first part of the heading covers goods generally shaped or fitted to contain particular goods, and that the expression 'sports bags' includes articles such as gym bags. The answer is therefore NO. The sports bag is classified within subheading 4202.9.

Looking only at the 6-digit subheadings within 4202.9:

•         4202.91 - With outer surface of leather or of composition leather

•         4202.92 - With outer surface of plastics or of textile materials

•         4202.99 - Other

The sports bag has an outer surface of textile materials. 4202.91 may be disregarded. 4202.92 covers goods with an outer surface of textile materials, so there is no need to consider 4202.99.

Only same-level comparisons

5-digit subheadings only compare with 5-digit subheadings in the same heading. 6-digit subheadings only compare with 6-digit subheadings under the same 5-digit parent.

Subheading text takes precedence

Where the terms of subheadings or subheading notes conflict with headings or with section and chapter notes, the former take precedence.

2.(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or failing to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled.

(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

01 Incomplete or unfinished article

Treated as a complete article, provided it has the essential character of the complete article.

02 Unassembled or disassembled article

Classified as if it were assembled.

Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances...

...provided that as presented the incomplete or unfinished article has the essential character of the complete or finished article.

Essential character

The term 'essential character' appears in the terminology of Interpretation Rules 2(a), 3(b), and 5(a).

Essential character is one of the most important aspects of classification. It is also one of the most difficult.

It is subjective. It depends on the person doing the assessment and can be influenced by that person's biases and experience. This makes essential character a less predictable element in classification, and one of the main reasons for classification disputes.

The first principle of Rule 2(a) lets incomplete or unfinished goods be classified under the heading for the complete article, provided those goods are recognizable or identifiable as having the essential characteristics of the complete or finished product.

...It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.

Unassembled

Goods that have never been assembled, a collection of parts that must be put together to form the article.

Disassembled

Components that were once together and have since been taken apart, for example, for ease of transportation.

GIR Rule 2(a) Case study: Toyota’s HS misclassification in Thailand

Misclassification under GIR 2(a) can expose traders to severe financial and reputational harm. When goods are imported unassembled or disassembled, but retain the essential character of the finished product, they must be classified as the complete article. Failure to do so can result in substantial back duties, penalties, and legal disputes, as well as damage to commercial relationships and brand integrity. The following case illustrates how costly non-compliance with GIR 2(a) can be in practice.

Background

In 2022, the Thai Supreme Court imposed significant penalties on Toyota Motor Thailand for misclassifying imported parts for its Prius model. This case exemplifies the compliance challenges and financial implications of HS misclassification.

Details of the misclassification

Toyota classified the imported parts under HS code 8708, covering automobile parts, to leverage reduced tariff rates under the Japan-Thailand Economic Partnership Agreement (JTEPA). However, Thai Customs determined the parts should have been classified under HS code 8703.23.51, applicable to complete vehicles.

Thai Customs applied General Rule of Interpretation (GIR) 2(a), which states that unassembled or disassembled products should be classified as complete products if they retain the essential character of the finished item.

Financial implications

• Total Liabilities: Approximately 11.63 billion baht (around USD 272.11 million) in back taxes and penalties.
• Penalty Breakdown: Included unpaid duties, interest, and fines under Thai customs law.
• Timeline: Payments were required within 30 days of the court ruling.

(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

01 Mixtures and combinations

A heading referring to a material includes mixtures or combinations of that material with other materials or substances.

02 Goods made of given material

A reference to goods of a given material includes goods consisting wholly or partly of that material or substance.

03 Resolve under Rule 3

The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances...

Example: chicken feed of wheat and oats

Consider a chicken feed mix comprising only of a mixture of wheat and oats. There is no heading that covers mixtures of these goods. if there were, the classification would be resolved by virtue of Interpretation Rule 1.

Although there is no heading that covers mixtures of wheat and oats, there is a heading that covers wheat (10.01) and there is a heading that covers oats (10.04).

Let’s substitute the ingredients of the mix for the words ‘material or substance’ in Rule 2(b):

And conversely:

If Rule 2(b) didn’t exist, there would be nowhere to classify mixtures such as this.

So this part of Rule 2(b) directs that, because there is a heading for wheat (10.01) and a heading for oats (10.04), it is possible to classify this wheat and oats mixture in one of those headings.

...any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance…

...The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

Rule 2(b)

Extends heading scope to mixtures and composite goods

→

Two or more headings apply

Multiple potential classifications now exist

→

Rule 3

Resolves which heading applies

Note:

Rule 2(b) extends the terms of the headings. It does not provide a classification answer.

01 Unassembled goods

Goods imported in an unassembled or disassembled condition.

02 Unfinished goods

Goods imported in an incomplete or unfinished condition.

03 Mixtures

Goods that are mixtures of two or more materials or substances.

04 Composite goods

Goods composed of different materials.

3.            When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be affected as follows:

(a)          The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b)          Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

(c)          When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be affected as follows:

01 Mixtures

Goods covered by Interpretation Rule 2(b).

02 Made from different materials

Also covered by the provisions of Rule 2(b).

03 Sets

For example, a gift pack of soap, bath salts, and a flannel or wash cloth.

04 Composite goods

Goods composed of two or more other goods, for example, a pen that incorporates a small calculator.

05 Multiple heading matches

Goods that meet the terms of descriptions set out in more than one heading.

The heading which provides the most specific description shall be preferred to headings providing a more general description.

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Guideline

Example

1

A description by name is more specific than a description by class or genus.

Base metal filing cabinets are classified within heading 83.04 (which specifically describes the goods) rather than in heading 94.03 (which covers 'Other furniture…').

2

A heading description that identifies goods clearly and precisely is more specific than a general one.

A driver's seat for use in a motor vehicle is considered to be classified within heading 94.01 (which covers 'Seats…') rather than in heading 87.08, which covers parts of motor vehicles.

Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to Rule 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

01 Mixtures

For example, the chicken feed mix of wheat and oats.

02 Goods of different materials

For example, a glass fruit bowl with an ornamental pewter rim.

03 Composite goods (joined)

Components are not designed to be separated, for example, a pen incorporating a small calculating machine.

04 Composite goods (separable)

Components are mutually complementary and together form an entity not normally sold separately, for example, an ashtray with a metal stand and removable glass bowl.

05 Retail sets

Sets put up for retail sale, for example, soap, bath salts, and a flannel.

Essential character can be undeterminable

On many occasions essential character cannot be determined. This is not necessarily a problem; it is not an absolute necessity to always determine essential character.

Indeed, it may not be always possible to determine the essential character. If this exercise requires more than a reasonable amount of deliberation, the answer may be that no one factor gives the goods that character.

For a chicken feed mix of equal quantities of wheat and oats, all other factors being equal, neither grain imparts more essentiality than the other.

In such cases, Rule 3 provides a further solution: Interpretation Rule 3(c).

When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Rule 3(a)

Two or more headings appear to apply, prefer the most specific description.

Rule 3(b)

Rule 3(a) does not resolve the matter, classify by the material or component that gives the essential character.

Rule 3(c)

Neither 3(a) nor 3(b) resolves the matter, classify under the heading that occurs last in numerical order.

4. Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin.

Note:

The overriding message regarding Rule 4 is “do not use it”.

5.            In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein:

(a)          Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;

(b)          Subject to the provisions of Rule 5(a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

(a)          Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;

01 Sold with the article

Normally sold with the article they are designed to contain.

02 Keep and protect

Keep and protect the article when it is not in use.

03 Specific to the article

Of no real use for articles other than those for which they are designed.

04 Suitable for long-term use

At least as durable as the article they contain, not goods to be disposed of once the contents are taken out.

When Rule 5(a) does not apply

If the cases or containers are imported without their contents, they are classified according to their own characteristics.

Rule 5(a) also does not apply to containers which give the whole its essential character. A case of unusually high value or ornamental nature, especially where the contents are not commensurate with the status or quality of the container, would not be subsumed into the classification of the contents. The classification would most likely follow the container.

For example, an ornately decorated wooden jewelry box imported containing only an inexpensive necklace would not be classified with the necklace under heading 7117 (imitation jewelry). The box is not of a kind normally used for packing such goods, and its design, durability and higher value give the whole its essential character. It would therefore be correctly classified under heading 4420 (wooden articles of furniture) rather than following the contents.

Subject to the provisions of Rule 5(a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

Outside containers

Crates; cardboard boxes; poly bags (that shirts are often packed in); all varieties of flexible containers, bags, and sacks.

Inner packing materials

'Loose' material used for shock absorbing purposes (foam pellets, felt, scrap textile); cardboard stiffeners (for shirt collars); cardboard dividers.

When Rule 5(b) does not apply

The second sentence directs:

The provisions of Rule 5(b) do not apply to goods such as pressurized gas bottles or oil barrels. These goods are clearly suitable for repetitive use, and as such, they are classified in their respective headings.

"Suitable for repetitive use" means goods designed specifically to be re-used for the same purpose as that originally intended. Containers and packing materials that are not designed for repetitive use, but which may be used for other purposes, are classified with the goods they contain at the time of importation.

✓

Distinguish between parts and accessories in HS legal texts and apply that distinction to heading and note scope.

✓

Identify the correct classification pathway for a part, including when it is classified with the complete good versus in its own right.

✓

Apply the two provisions that allow parts to be classified with complete goods and navigate subheading hierarchies correctly.

✓

Gain an understanding of two important legal notes that relate to parts  -  Note 2 to Section XV and Note 2 to Section XVI.

Headings/legal notes covering PARTS only

Headings/legal notes covering PARTS AND ACCESSORIES

Heading 84.31 Parts suitable for use solely or principally with the machinery of headings 84.25 to 84.30.

Heading 87.14 Parts and accessories of the vehicles of headings 87.11 to 87.13.

Note 1 to Chapter 83 Relates to parts only.

Note 3 to Chapter 95 Covers parts and accessories.

01 Component approach

A part is a constituent or component of the whole. Used in Australia and Commonwealth jurisdictions.

02 Essential function approach

A part may be something essential to the functioning of the whole. Used in the United States and Canada.

"It is a well-established rule that a “part” of an article is something necessary to the completion of that article. It is an integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article."

United States v Willoughby Camera Stores, 1933

01 Direct relationship

"an 'accessory' must bear a direct relationship to the primary article that it accessorizes." (Rollerblade, Inc., 24 Ct.)

02 Secondary importance

"accessories are of secondary importance," but must "somehow contribute to the effectiveness of the principal article" (HQ 960950, Jan. 16, 1998)

03 Subsidiary devices

"accessory" includes subsidiary devices that modify the machine to perform a wider range of operations, increase precision, or perform a service relative to the main function. (EN Heading 8466 (B))

PARTS

ACCESSORY

Automotive brake pads

Essential component of the braking system

•         A vehicle cannot safely operate without functioning brakes.

Brake pads are essential components of the braking system.

Car roof rack

Optional carrying attachment

•         The vehicle can be driven without a roof rack.

Adds optional carrying capacity; does not affect the vehicle's essential function.

Pump impeller

Core internal component

•         The pump cannot move fluid without the impeller.

It performs the machine's primary function.

Printer dust cover

Optional protective item

•         The printer operates without it.

The cover protects the machine but is not essential to printing.

Laptop keyboard (built-in)

Core input component

Without a keyboard, the laptop cannot be operated normally.      

Mobile phone protective case

Optional protective item

•         The phone functions fully without the case.

Enhances durability or appearance but is not required for operation.

Camera tripod

Optional stability device

•         The camera can take photos without a tripod.

Improves stability and enables certain types of photography but is not essential.

Example: Parts and accessories for bicycle items

Let's look at bicycle items and whether they are classified as parts or accessories.

A bicycle chain is

•    essential for propulsion; without it the bicycle cannot function.

•    a core mechanical component forming part of the bicycle's drive system.

Therefore, it is classified as a part. In the HS, it is classified under HS 7315.11 – Roller chain for bicycles.

A bicycle water-bottle holder, on the other hand,

•    enhances convenience but is not essential to riding,

•    and the bicycle operates fully without it, as it adds only optional functionality.

Therefore, it is classified as an accessory. In the HS, it falls under HS 8714.99 – Other parts and accessories of bicycles and other cycles.

Note: Water-bottle holders fall under 8714 because this heading explicitly covers parts and accessories of bicycles. An accessory can only be classified under a provision that expressly includes accessories.

01 Grouped by genus

The HS attempts to group similar articles that are important in international trade within similar headings.

02 Grouped by function

Groupings may be by how goods operate, or by the industry in which they belong.

03 Own-right headings exist

Separate headings describe goods in their own right, even where those goods are specifically regarded as parts for use with other products.

04 Dedicated parts

If a part is highly specific to one good and belongs to no larger genus, it will likely be classified with the complete good for which it is a part.

Step 1 — Identify the part

Step 2 — Describe within the Nomenclature

Example: Water pump 

Although a particular water pump may be specific to a washing machine and therefore considered to be a part of that washing machine, ‘liquid pumps’ are a genus of goods that have great importance in international trade and are described in their own right, under their own heading.

Key Point

The overriding rule when classifying parts is that there is no one rule that allows the automatic classification of parts with the complete good. In fact, the reverse is to apply.

Parts are to be classified in their own right — without regard to the whole goods for which they are a part — unless specific provision has been made.

Provision to classify parts with their complete (or parent) good is made in two distinct ways:

·    by the terms of a heading, or

·    by the direction of a legal note.

Provision 1 Heading terms

The heading text itself specifies ‘…and parts thereof’. Parts are automatically included at the heading level.

Provision 2 Legal notes

A Section or Chapter note specifically directs that parts are to be classified with the complete goods, covering all levels of the classification hierarchy.

‘Stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbecues, braziers, gas-rings, plate warmers and similar non-electric domestic appliances, and parts thereof, of iron or steel’

Key Point

✓ The heading terms only operate at heading level. If the heading is divided into subheadings, the ‘…and parts thereof’ phrase does not automatically flow through to every subheading.

✓ Specific provision for parts must be made at each subheading level. If the subheading does not say ‘and parts thereof’, parts cannot be classified there.

✓ If the heading includes parts but no subheading specifically provides for them, the parts fall to a separate ‘parts’ subheading. If there is no parts subheading, they fall to the residual ‘other’ subheading.

Worked Example: heading 73.21 

Continuing with the steel gas burner example, having established that stoves fall within heading 73.21, the next step is to find the correct subheading.

At the 5-figure subheading level, although stoves are classified within subheading 7321.1 as they are cooking appliances, parts are not mentioned. Thus, although the gas stove is ultimately classified within 6-figure subheading 7321.11, there is no provision within the structure of subheading 7321.1 to admit parts.

The next 5-figure subheading is 7321.8. It covers ‘other appliances’, but there is no mention of parts.

Parts are in fact covered by 5-figure subheading 7321.90. Subheading 7321.90 may well have read ‘other’ or ‘other, including parts’. In either instance, parts would still have been classified there.

Key Point

Unlike the terms of a heading provision, a legal note provision does not require those headings — and/or subheadings — to specifically mention ‘parts’ in their texts for parts to fall within the heading or subheading. Under the terms of a legal note provision, parts are included with the whole goods at all levels within the heading/subheading hierarchy.

Legal note

Scope

Note 2 to Chapter 82

Parts only

Note 1 to Chapter 83

Parts only

Note 2 to Section XVI

Parts only (Chapters 84 and 85)

Note 2 to Chapter 90

Parts and accessories

Note 3 to Chapter 95

Parts and accessories

Example: Note 3 to Chapter 95 — coin-receiving mechanism for a pinball machine

Consider for example Note 3 to Chapter 95. It covers the treatment of parts of the goods of Chapter 95 and it directs:

Consider also, the application of Note 3 in the context of the structure of heading 95.04.

Note 3 to Chapter 95 governs the treatment of parts for the heading and the subheadings. It directs that provided the goods are not excluded from Chapter 95 by virtue of Note 1 to Chapter 95, parts for the goods so described within heading 95.04 are classified with those goods at each level in the classification hierarchy — providing those parts are for use solely or principally for the complete goods.

Thus a coin receiving mechanism that activates a coin operated pinball machine, is classified with the complete machine at all levels of the classification hierarchy, that is within heading 95.04 and within subheading 9504.30.

1

within headings that describe the part in its own right

2

within headings that cover parts for complete goods that are classified within a number of headings

3

within headings that cover parts for the complete goods that are classified within a particular chapter, or

4

within headings that cover materials-related areas of the Nomenclature.

Ball bearings

Heading 84.82 — described in their own right; classified there regardless of the machine they will be fitted to.

Valves

Heading 84.81 — classified as valves even though they are almost always part of a larger system.

Liquid pumps

Heading 84.13 — classified as pumps even where they are specifically designed for a particular machine.

Example: 73.22 — Radiator fan (a trap for the unwary)

A fan imported separately for a radiator classified within heading 73.22 might seem to be a part of that radiator. Heading 73.22 does say ‘…and parts thereof’.

However, fans are classified within heading 84.14 by virtue of the terms of that heading — the goods are mentioned in their own right. Further, Note 1(f) to Section XV excludes goods of Section XVI (including Chapter 84) from Chapter 73.

Conclusion: The fan is classified in heading 84.14, not in 73.22. The own-right heading, in combination with the exclusion note to Section XV, takes precedence.

Similar machines, similar parts

Cranes and other lifting machines share many of the same components. Classifying all such parts under one heading is more practical than separate headings for each machine type.

Hard to isolate sole/principal use

Determining whether a part is solely or principally for one particular machine can be difficult when machines have similar functions. A shared heading resolves the ambiguity.

Reflects growth in parts trade

Standalone parts are increasingly traded internationally. The HS groups important traded goods within the same headings — a dedicated parts heading reflect that commercial reality.

Example: Heading 84.31 — generic parts heading

Heading 84.31 covers the parts of the machines that are classified within headings 84.25 to 84.30

The machines of headings 84.25 to 84.30 are somewhat similar: lifting, handling, digging, boring, and excavating machines. The HS has rationalized that similar machines will normally have similar parts. Therefore, rather than assigning parts for cranes to heading 84.26, parts for fork-lifts to 84.27, and so on, the HS consolidates all similar machine parts into a single generic heading.

Example: heading 73.11 — no parts provision

Consider the terms of heading 7311.00.

Unlike heading 73.21, heading 7311.00 does not allow for parts. Therefore, a part for a steel gas container (a steel end cap, for instance) cannot fall to heading 7311.00, but is classified within heading 73.26, as an article of steel not elsewhere specified or included.

Part classified with complete good by heading terms

The heading that says "...and parts thereof"

Part classified with complete good by legal note

As directed by the relevant chapter/section note

Neither heading terms nor legal note applies

Headings that describe the part in its own right

Part not described in own right

Headings covering parts for goods classified within a number of headings

Part not covered above

Headings covering parts for goods classified within a particular chapter, or

Headings covering materials-related areas of the Nomenclature

Key Point

What Note 2 to Section XV does is identify certain parts and, working in conjunction with a number of “exclusion type” legal notes, exclude them from being classified as parts of whole goods.