At the heart of this process lies the goods description—a concise yet comprehensive, and legal, description of the item being classified. Getting the information needed for customs classification can sometimes prove a challenge as data can be held in numerous sources or with your suppliers. But it’s a crucial aspect of classification to address that will lead to accurate classification and improved compliance.

Here’s our guide to navigating this important aspect of classification.

Six steps to the perfect goods description

Be specific, yet concise: The key to a clear goods description is finding the balance between specificity and brevity. Include essential details such as material composition, function, and intended use, while avoiding unnecessary jargon or superfluous information. For example, instead of simply stating “fasteners,” specify the type (e.g., screws, bolts) and material (e.g., stainless steel, brass). This is because tariff codes in many cases are classified according to material type.

Use standardised terminology: Consistency is key when communicating with customs authorities worldwide. Use standardised terminology and the central Harmonised System (HS), from which all tariff codes are based, to ensure you follow the guidance provided. It’s also important to keep up to date with changes to the Harmonised System which can happen regularly. Our TariffTel solution provides automatic notifications to let you know when your codes have changed, giving you time to update them before shipments leave with the incorrect paperwork in place.

Provide visual aids: Sometimes, words alone are not enough to accurately describe complex products. That’s why we introduced the image functionality into TariffTel to enable businesses to upload and store product images which can be accessed centrally to all who need to see them. These visuals can help customs officials better understand the nature and characteristics of the goods, reducing the risk of misclassification.

Include technical specifications: For products with unique or specialised features, it’s a good idea to include technical specifications such as dimensions, weight, and performance metrics. These details enhance the clarity of the goods description, make sure the correct code is assigned and you’re paying the right duties and taxes.

Consider regulatory requirements: Certain products may be subject to specific regulatory requirements or restrictions based on factors such as health and safety, fat or sugar content in food items, or environmental impact in the case of wood used in homewares. Ensure that your goods description accurately reflects these additional considerations to avoid delays or penalties during customs clearance.

Update regularly: Nothing in trade stands still and it’s likely that the composition of your products could change over time, especially if they are best-sellers and you have sold the product for a while. It’s a good idea to regularly review and update your goods descriptions to reflect any modifications or enhancements to your product line. This proactive approach will keep you compliant with evolving trade regulations.

For more insight into how to classify goods correctly, take a look at some of our sector specific guides on classifying food and homewares.

A customs classification solution like TariffTel can help streamline the process of classification and support your team in creating accurate goods descriptions which lead to the correct tariff code. TariffTel’s combination of customs data and our unrivalled team expertise create a precision solution for every business prioritising trade and growth.

If you want to find out more about TariffTel, please contact our team for a demo.

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Here, we look at why a supplier-first approach to customs classification is the right strategy for businesses, how technology is crucial to enable this relationship with suppliers and why customs managers (or import or customs teams) can’t do it all.

Why suppliers matter in customs classification

Suppliers are the gatekeepers to a source of knowledge about your products that can support the transportation of goods from one country or border to another, quickly and compliantly. Each product being transported needs a HS code which is used by customs authorities around the world to identify products when assigning duties and taxes. Although many countries have adopted the same classification system from the World Customs Organisation (WCO), each country can interpret it differently. This can create added complexities for customs classification teams tasked with navigating the HS code book, which, in itself, is constantly being updated.

Even if teams use a simple classification tool or manual process, having to look up HS codes, product by product, is time consuming and often impractical. An invoice description rarely details all the essential characteristics and late changes in fabric or material composition can further complicate the process and lead to inaccuracies. From our classification assessments, we estimate that the majority of UK retailers that are not using a digitised customs classification solution are only 60-80% compliant in their classifications and could be facing fines and excessive border delays as a result. With the help of suppliers, customs classification teams can capture essential characteristics and images of thousands of product items with minimal effort, leading to accurate, unambiguous, and auditable classifications and duty rates.

Involving suppliers with an intelligent customs classification platform such as TariffTel makes the process quick, easy and devoid of human error as the system will ‘error’ if certain inputs are made that would result in no HS code being assigned. In fact, retailers can be assured compliance levels will raise significantly knowing that the quality of data provided by suppliers is of a quality to classify products correctly, plus they have the assurance of automated monthly checks to ensure no invalid codes are present.

The same can be said for improved accuracy rates in other industries such as automotive and manufacturing. Suppliers can provide details about a product item that makes classification simple such as material and construction methods, both of which help when assigning the correct code and when providing customs descriptions to the importer for confirmation. This efficiency can reduce customs classification operating costs for a business by an average of up to 25% subject to their size and maturity. In some cases, it could be an initial immediate cost reduction of reducing head count where resources are allocated more strategically to other departments, or more gradual in optimising operational efficiencies by shortening time scales and operating at a higher rate. Ongoing cost saving opportunities present themselves throughout the digital transformation journey.

While this approach does give suppliers more input into the classification process, it safeguards the importer’s total control over the final classification. Customs managers can always reject supplier submissions, or alternatively seek further clarification using a question and answer module. Communication is both ways.

AI in customs classification

With the complexity of classifying products in different customs authorities, AI and API centric solutions are scalable and can be quick to be deployed by businesses, however the accuracy and compliance can often be inadequate.  These solutions are common for e-commerce and marketplaces where parcel delivery or courier services are the primary mode of transport.

In the example of classifying clothing such as ‘shorts’, you are referred to the most probable description based on the largest volume of imports for that country, the tool could assume ‘Women’s shorts made out of cotton’.  Shorts could be for a different gender or made from a different material, so such assumptions are often flawed. A customs classification platform that seamlessly incorporates supplier engagement proves superior here in the classification process as products are assigned HS codes based on verifiable data.

Why successful businesses have digitised their customs classification process

Many businesses have been shifting away from manual classification avenues and exploring systematic options for years and as a result now have greater visibility and communication across all parts of the supply chain. With a single, centralised platform such as TariffTel, data is available in real-time and brings more control and efficiency, especially given suppliers can be put at the heart of the process.

To find out more about TariffTel and the importance of digitising your customs classification process, please get in touch.

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