January 2022 not only brought UK Customs changes, but also an update to some HS (Harmonized System) codes—included within commodity codes—which requires traders to check and possibly update their commercial invoice information or risk goods being stuck in customs.
COMMODITY CODES EXPLAINED
- Commodity codes can be 8, 10 or 14 digits long
- For example: Smoked Fish - Pacific salmon: 030541 00 10
- The first 6 digits are the HS code
- The 7-8th digits are the CN (Combined Nomenclature) export code
- The 9-10th digits are a country- specific code for imports
- The 11-14th digits are for additional measures (such as excise goods)
When moving shipments across borders, commodity codes display details of goods, including their description, rate of duty and VAT, as well as whether the duty is suspended. The codes also show if a license is required to ship the goods and if they are controlled by further legislation, such as Agricultural Policy, anti-dumping duties, or tariff quotas.
Different carriers have different requirements for the length of commodity code that is used within their pre-set templates. If you are unsure of the commodity code information required for your shipment, then seek clarification from the carrier or your logistics expert.
WHY THE UPDATE IS IMPORTANT
When an HS code updates (which can happen every five years) it updates the correlating commodity codes that are used to ship goods within its descriptor.
If the HS code that applies to your goods has been updated, and you have failed to note the updated commodity code in your commercial invoice, officials could hold your goods in customs and charge you additional fees to release them, which means delays in getting shipments to your customers.
While each round of changes does not update every HS Code, it is up to you to check if your goods’ codes have been updated.
HOW TO CHECK HS CODE UPDATES
- A list of all HS2022 codes can be found on the Trade Tariff section of the UK Gov website
- From there, you can download the list as either a word or excel document
- Then search the document for the keywords reflecting your goods’ description
- Next you can check for the specific subsection of goods that best describes your items
- Beside the goods’ description you will see the HS code
- If the code is unchanged, then it requires no update on your commercial invoice
- If the code is updated, then use this new code in your commercial invoice
WHO HS2022 IMPACTS
With 351 sets of amendments, the HS2022 update affects businesses across a range of sectors.
The WCO (World Customs Organisation) has made some updates to recognise product innovation and technological advancements, as well as other updates to reflect environmental, health, security or social concerns.
For example, HS2022 introduces new subheadings for specific chemicals controlled under the Chemical Weapons Convention, as well as those under the Rotterdam Convention, and for persistent organic pollutants controlled under the Stockholm Convention.
By recognising the potential use or misuse of goods in HS Code updates, the WCO has made it easier for the global community to use data to encourage trade that betters society, one commercial invoice at a time.
If you are unsure which HS codes to use or how to complete a commercial invoice, then it is advisable you seek help from a customs or logistics expert.