12. Part 3: The classification process

Introduction

Part 2 covered the structure of the Nomenclature. In this Part, we examine how that structure is used to classify goods in practice by means of, the Interpretation Rules.

Learning objectives

✓

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.

Six Interpretation Rules govern classification. Around 95 percent of traded goods are classified using Rules 1 and 6, so we focus on those in detail. We cover Rules 2 to 5 more briefly.

Over the years, the World Customs Organization, national customs administrations, and courts and tribunals have built principles and precedents. After all of that, the mechanics of classification still come down to two steps:

1.  Identifying the goods.

2.  Applying the Interpretation Rules.

Having established this overriding principle, the two steps may be further broken into five stages or processes. They are:

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.

 

Although there is some overlap between the stages, the first three processes form the identification phase.  Process four is governed by Interpretation Rule 1. Process five is governed by Interpretation Rule 6.