The Harmonized Commodity Description and Coding System (HS) is the internationally recognized system for coding and describing products for trade. The HS was developed and is maintained by the World Customs Organization (WCO).
Importers and exporters of goods are required to ensure HS compliance when declaring goods to customs agencies in order to ensure the correct tariffs are assigned and paid – this includes updating their product classifications as needed to match the HS codes when these are changed.
The Canadian Border Services Agency (CBSA)’s Customs Tariff is based on the HS and is updated regularly to keep pace with changes made to the HS.
On January 1, 2017, CBSA introduced the latest Customs Tariff, involving over 200 amendments. The amendments go beyond just changes to the classification numbers, also affecting Chapter and Subheading Notes.
The following sectors saw the greatest number of amendments:
- Agriculture (85)
- Chemical (45)
- Machinery (25)
- Wood (22)
- Transport (18)
- Textile (15)
The 2017 Customs Tariff also introduced a new heading (9620) for Monopods, Bipods and Tripods. Subheadings of this category have been added in order to maintain the existing customs duty rates.
It is critically important to get your HS classifications correct, and to update these when amendments have been made. Staying compliant will reduce your chances of the overpayment of duties and penalties and generally make your business run smoother.
In this spirit, we recommend having a methodology in place that encompasses the following steps:
- Analyze all affected products to see what information is required to classify your goods; update your import and export databases as needed according to the Customs Tariff 2017 Concordance Table.
- Review all corresponding rules of origin under the various free trade agreements to ensure continued eligibility.
- Contact CBSA to request a new Advance Tariff Ruling on goods affected by a change in classification.
- Consider a review of the published CBSA link to Other Government Departments (OGD), which identifies the classification numbers where a change in effective date or expiry date has been amended such as, the Canada Food Inspection Agency (CFIA) and the Natural Resources Canada (NRCan) departments.
- Apply any changes to all documentation throughout your supply chain.
- Use a qualified customs consultant to help navigate the complex world of tariff classification and ensure you get it right the first time.
Don’t let the improper use of an obsolete or revised tariff classification delay your shipments and cause unnecessary compliance risks.
Find out how we can help facilitate your customs classification and help keep your classification database up to date.
Information provided by: Canadian Customs Consulting Dept. - Cole International