In tariff classification, the combination of accurate data and expert knowledge is essential to assign the correct tariff code to your goods. Simply looking up a code in the tariff book or an online tool, without considering the section, chapter, and explanatory notes, often leads to a wrong classification and incorrect duty payment. This means you could be over or under paying duty costs and your business could be in line to save money if you implement a better classification solution. You also run the risk of being non-compliant with trade regulations if codes are incorrect. This has consequences and makes trade compliance a major priority for businesses today.

If your business is classifying 500+ SKUS on a regular basis each week, does your team have the time or knowledge to go into detail on every code to ensure accuracy? You may think that new AI solutions that have recently come to market are the answer. In our experience, they fall short when it comes to guaranteeing accuracy of tariff codes, and the combination of advanced customs technology and tariff code expertise is the answer with major brands such as M&S and ASDA agreeing and using our trusted TariffTel solution to classify goods.

Here we look in detail at what makes up a tariff code and how duty is assigned. Understanding the harmonised system and the way it works, can support your decision in finding the right tariff code solution for your business.

Why do we need tariff codes?

The primary use is to categorise goods for exporting and importing internationally. We have a standardised system that ensures consistency in how products are classified across different countries and customs authorities.

The Harmonised System (HS) is an internationally recognised nomenclature developed by the World Customs Organization (WCO). Each product is assigned a unique HS code, typically comprising six to ten digits. This alphanumeric code provides a standardised and universally understood means of categorising goods.

Tariff codes are then used to determine the appropriate tariffs and duties applicable to specific goods and used by customs authorities to identify and track shipments.

A correct code means a correct duty payment and ultimately, trade compliance.

What’s the difference between HS code, HTS code and tariff codes?

There are a few variations of codes you may see. It’s important to know the difference between them.

HS Codes
HS codes are six-digit codes that classify goods based on their nature, form, and composition. The first two digits of a HS code identify the chapter, the next two digits identify the heading, and the final two digits identify the subheading. HS codes are used by 212 countries worldwide. Whilst some countries adopt the 6-digits without modification, most extend to 7-12 digits to be even more precise. Read more about HS Codes.

HTS Codes
In the US, the Harmonised Tariff Schedule (HTS) is maintained by the U.S. International Trade Commission (USITC) and is used to determine the tariff rates that apply to goods imported into the United States. The WCO provides the first six digits and the HTSUS provides the final four for additional detail. Each country maintains its own Harmonised Tariff Schedule (or similarly named).

Tariff Codes/Commodity Codes
Tariff codes or commodity codes are classification codes used to determine the customs duty that is applied to a particular product. These codes are ten digits long for imports, eight digits for export, and are used to identify specific products. The HS code makes up the first six digits whilst the final four digits are unique to each country’s tariff system, and they provide additional detail that is specific to that country’s classification systems.

Understanding the tariff code structure

A tariff code structure is complex and made up of various parts. It is based on the chapter number, heading and subheading codes of the HS nomenclature. The correct code is assigned by understanding the nuances of the chapter and heading notes which only an expert can interpret and advise on.

Chapter: The first two digits of the HS code represent the chapter, which broadly categorises goods into overarching groups. There are 99 chapters in total, each covering a specific range of products. For example, Chapter 90 is dedicated to “Optical, photographic, cinematographic, measuring, checking, precision medical or surgical instruments and apparatus; parts and accessories thereof”

Heading: The next two digits further specify the product within a chapter and are known as the heading. This level of classification provides more detail about the type of goods. Following the example above, heading 04 corresponds to “Spectacles, goggles and the like, corrective, protective or other”

Subheading: The following two digits form the subheading, offering even more precision in describing the product. Continuing with our example, subheading 10 refers to Sunglasses
Tariff Item: Some countries add two additional digits to the HS code, creating a more detailed classification known as the tariff item. This level of specificity is particularly useful for accurate customs assessment. For instance, 90.04.10.91 represents “Sunglasses with lenses of plastics which are not optically worked.”

Take a look at how some seemingly straight forward products from our customer M&S, can be complex to classify without the right knowledge.

Understanding the structure and significance of the HS code is fundamental for anyone engaged in international trade. From customs classification managers to business owners, a grasp of this universal classification system facilitates smoother transactions, enables accurate documentation, and contributes to the efficiency of the global supply chain.

Having the right classification solution in place for your business is an indispensable tool that supports your trade in the connected global economy. TariffTel’s combination of advanced customs data and our unrivalled team expertise create a leading solution for every business prioritising trade efficiency and growth.

If you want to find out more about a tariff code solution that’s right for your business or want to learn how your business could benefit from TariffTel, get in touch with our team.

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There’s now a vast array of products that cater for this market from light-up costumes to spooky decorations and party food. Classifying some of these tricky products can give your classification team the spooks. With an accurate classification solution like TariffTel, backed by experts to navigate the more complex classifications, retailers can ensure their HS codes are correct and Halloween goods arrive in-store and on time to meet this growing consumer demand. This is exactly how our customer M&S ensures their Halloween products arrive in-store for consumers.

Here we take a look at some of the more spine-tingling products that can make assigning tariff codes at Halloween a bit of a classification headache.

What to look out for when classifying Halloween costumes

Costumes are by far the most sought-after product around Halloween. For kids and adults alike, there are now a vast range of clothing, costumes, and accessories of all kinds available.

The classification of Halloween costumes involves several key considerations. Firstly, it is essential to distinguish between true costumes and regular textile garments. There is a significant classification difference between the two, with costumes typically being made of non-durable materials not intended for prolonged or repeated use. For instance, a one-piece spider costume crafted from flimsy, non-durable material with visible raw edges at the neck, arms, and hem can fall under classification 9505. On the other hand, a clown costume, featuring a jumpsuit constructed from more durable, well-made material, would not meet this requirement, and would instead be categorised as fancy-dress clothing under chapters 61/62, depending on its construction.

The presence of additional items only adds to the complexities. Let’s take accessories like masks or a toy which is part of the costume. These can lead to a multi-tariff classification. For example, if the clown costume includes a mask made from non-durable material, it may be classified under 9505. However, items primarily designed as toys, like a toy mallet, would fall under heading 9503, as they serve a broader purpose and can be used year-round, not limited to the holiday season.

A crucial factor in determining the classification is whether the item is designed for year-round use or specific to Halloween. While a spooky design on a garment is a start, it is not sufficient to label it as a festive Halloween article. The durability and reusability aspects must also be considered. If a product is well-constructed with durable fabric or includes toys suitable for use throughout the year, its classification will typically fall outside of 9505.90.

For instance, consider this outfit from M&S, Although it features a spooky skeletal design on the top and bottom, it does not meet the requirements of a Halloween costume. The material is well-made and durable, and the outfit is not restricted to Halloween use, as it can serve as a comfortable pyjama set year-round.

Dastardly decorations

Halloween decorations present a complex challenge when it comes to classification due to specific guidelines governing what qualifies as a festive Halloween item. Take, for instance, ceramic items of various shapes and sizes that flood the market leading up to Halloween. Initially, you might assume that their design automatically categorises them as Halloween decorations. However, this assumption does not hold true. The first crucial distinction lies in determining whether a ceramic Halloween item serves a utilitarian or decorative purpose. For instance, this ceramic bowl adorned with Halloween-themed wording and motifs cannot be classified as a Halloween item under code 9505.90 since its primary function is utilitarian, meant for holding sweets and food, with decoration as a secondary aspect.

On the other hand, a product such as this decorative candle holder shaped like a carved, grinning pumpkin with other Halloween embellishments can be considered under code 9505.90. Its main purpose is decoration, representative of Halloween, with the candle’s role being to enhance its decorative appeal.

Using an automated classification system such as TariffTel can help alleviate these problems. TariffTel acts as a centralised hub in which all product data is conveniently held, and the system allows internal communication between retailer and suppliers. The TariffTel team also oversees the maintenance of your commodity codes, paying close attention to any Tariff Code changes, or changes to the interpretation of the Tariff, making sure the system remains up-to-date and accurate at all times.

Find out more about TariffTel and how it can support your business with classifying goods. Need support with classifying your products, get in touch with our team.

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Here’s everything you need to know about the Act and our five steps to preparing for a digital trade future. 

What is the Electronic Trade Document Act? 

In July, the new Electronic Trade Document Act was given royal assent from the King and passed into law on 20th September 2023 paving the way for the future of digital trading worldwide. This new law gives trade documents the same legal status as physical ones and aims to make foreign trade more efficient, cleaner and cheaper. 

The Act has been welcomed by the industry with 75% of delegates at a recent Institute of Export & International Trade (IOE&IT) webinar saying it would have a positive impact on their business. 65% of attendees said the speed and efficiency benefits of swapping paper documentation for digital was the most important opportunity, while a further 23% selected improvements in security and visibility of trade. 

Why have some called the Act a ‘game-changer’ for trade? 

Chris Southworth, Secretary general of the International Chamber of Commerce (ICC) describes the law as game-changing not just for the UK, but for global trade. He says, “The act will enable companies to finally remove all the paper and inefficiency that exists in trade today and ensure that future trade is far cheaper, faster, simpler and more sustainable. This presents a once-in-a-generation opportunity to transform the trading system and help us drive much-needed economic growth.” 

Given the UK’s far reaching trade network, the ICC estimates that 80% of trade documents around the world are now based on English law to some extent. 

From a sustainability point of view, the reduction in paper waste could be significant. The shipping container industry is estimated to generate 28 million paper trade document each day in the UK. By converting these paper documents to digital documents, processes can become more automated and quicker and have a positive environmental impact in waste reduction.  

Digitising trade documents and processes is set to change the way the industry works forever. For the better.  

As Paul Scully, minister for technology and the digital economy, rightly says, “The global container shipping industry generates billions of paper documents a year – and, in reality, there’s no need for the immense costs UK businesses have to face in producing them and the detrimental environmental impact that this has.”   

Five steps to digital trade

Whilst the legislation is currently non-mandatory and it is therefore optional for businesses to start using digital documents, this Act spells the future of digital trade and what’s to come. Businesses that embrace digitisation early will be at an advantage, benefiting from greater efficiencies and quicker processes. Here’s what your business can do now to prepare for a digital trade future.  

 1. Ensure secure data management processes are in place 

Elizabeth Davies, TariffTel’s Customs System Manager, says, “Trusting a technology provider with your company’s data will be a big consideration for businesses considering this Act. Real-time data will need to be accessible to suppliers, partners and carriers, and businesses will need a robust data management plan in place to facilitate the sharing of data.” 

John Nicholson, our Head of Infrastructure and Service Delivery explains more. “To comply with the requirements of this Act, a robust data management plan should centre on secure, real-time data sharing capabilities. This would involve deploying secure APIs and standardised data formats to facilitate seamless data exchange with suppliers, partners, and carriers. Clearly defined data access policies, along with robust encryption methods, should be in place to uphold data integrity and security. Ongoing real-time monitoring and comprehensive audit trails are also pivotal for ensuring both compliance with the Act and trust amongst all stakeholders involved. These measures not only fulfil legal obligations but also improve operational efficiency and data transparency.

It’s worth remembering that the information shared to all parties as part of this Act will only be as good as the data collected and provided by all parties involved. “   

2. Invest in a trusted customs classification solution to assign HS codes 

  Customs documentation is one part of the trade documentation that will be impacted by this Act and there are solutions available now that can automate and simplify the way your business assigns HS codes to goods as part of the required customs clearance documentation.

Our TariffTel platform is a secure and trusted solution that allows products to be classified at source so that the required data is collected before goods are shipped thus negating delays. Unlike other solutions that rely on AI to interpret the HS book, our solution is built and maintained by our team of customs classification experts who are immersed in the world of customs. They constantly update our master database so at all times it is fully up-to-date, and they can solve even the most complex of classification queries which cannot be determined by machine learning.

We will be developing our product offer and services to support businesses in progressing further in their trade digitisation journey to meet the expectations set out in this important Act to realise the future of digital trade.

 3. Stay on top of trade regulations

The shipping industry is governed by regulation that differs country by country and it can be complex. It pays to be on top of any changes to regulation, as and when they happen, to ensure your business is fully compliant.  

Some countries will require documentation that others don’t and in the case of this new Act, it’s important to know what data and documentation you need for each shipment your business makes.  

In the case of classification, there can be new commodity codes, merging commodity codes and description updates to commodity codes. Staying on top of these changes with a technology solution like TariffTel that is updated regularly means that you will continue to use accurate HS codes.

4. Ensure robust disaster recovery systems are in place

Disaster recovery planning sits as high on the management agenda as any kind of major operational or business development decision. But just having a continuity plan in place is not enough. As trade becomes more digital, data security and disaster recovery planning should be regularly looked at and your disaster recovery plan tested (and adapted if necessary) to ensure it more than carries muster should disaster strike.  

Time is of the essence in disaster recovery and getting systems back up and running quickly after a disruption should be a priority to minimise the impact. This is where the importance of continuity planning is crucial.  

Often it can be the case that companies’ backup their data off-site but do not have the required computing equipment such as servers at another location to restore the data. This means that although the data is safe, it can still take a number of days/weeks to acquire the necessary hardware to restore the data and get systems back up and running.  

At TariffTel we are backing up customer data in real-time to a remote standby system at a different data centre. All the hardware required to run the system is already set up and ready to go when required.  

5.Engage your suppliers – they know your products best

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. Digitising this information at source can support many requirements for the Electronic Trade Act.  

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 businesses 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 digitally capture essential characteristics and images of thousands of product items with minimal effort, leading to accurate, unambiguous, and auditable classifications and duty rates, facilitating digital trade.  

Find out more about our customs classification solution, TariffTel, how the platform supports businesses in avoiding border delays and non-compliance fines with inaccurate HS codes. 

Get in touch to speak to our team about the impact the Electronic Trade Document Act will have on your business and how to prepare.  

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We see this everyday with our customers including M&S and Primark, in fact it’s estimated that over 28 billion paper trade documents are printed each day in the UK alone. These paper trade documents – used to transfer ownership of goods when importing or exporting them – take a lengthy time to process, and hold up the reality of an efficient, digital trade system. Until now. The introduction of the Electronic Trade Document Act is set to have a profound effect on the future of trade in the UK and worldwide.

Here, we look at what the Electronic Trade Document Act is and what it means for businesses shipping internationally.

What is the Electronic Trade Document Act?

In July, the new Electronic Trade Document Act was given royal assent from the King and passed into law paving the way for the future of digital trading worldwide. This new law gives trade documents the same legal status as physical ones and aims to make foreign trade more efficient, cleaner and cheaper.

The Act has been welcomed by the industry with 75% of delegates at a recent Institute of Export & International Trade (IOE&IT) webinar saying it would have a positive impact on their business. 65% of attendees said the speed and efficiency benefits of swapping paper documentation for digital was the most important opportunity, while a further 23% selected improvements in security and visibility of trade.

Why have some called it a ‘game-changer’ for trade?

Chris Southworth, Secretary general of the International Chamber of Commerce (ICC) describes the law as game-changing not just for the UK, but for global trade. He says, “The act will enable companies to finally remove all the paper and inefficiency that exists in trade today and ensure that future trade is far cheaper, faster, simpler and more sustainable. This presents a once-in-a-generation opportunity to transform the trading system and help us drive much-needed economic growth.”

Given the UK’s far reaching trade network, the ICC estimates that 80% of trade documents around the world are now based on English law to some extent.

What can business do now to embrace the Act?

Many people in the industry have called for guidance for businesses on how to apply the bill in practice. The legislation says electronic versions of certain trade documents now have the same legal footing as their paper-based equivalents. But beyond that, it’s relatively short on detail on how businesses can embrace this new digital era. The non-mandatory nature of the legislation means it’s not a given that businesses will start using digital documents.

Undoubtedly it will come down to technology and the right solution to support the adoption of the Act.

Elizabeth Davies, TariffTel’s Customs System Manager, says, “Businesses look to digital transformation to gain competitive advantage and efficiency, improving operations for greater accuracy and compliance in the world of global trade. This is especially important with the volume of customs regulations and procedures businesses face today to get their goods from A to B. It’s a complex web of HS codes, regulation, data and processes that teams must navigate”

“Trusting a technology provider with your company’s data will be a big consideration as this Act means that real-time data will need to be accessible to suppliers, partners and carriers. Our TariffTel platform is a secure and trusted solution for automating and simplifying customs classification, one important part of the trade documentation needed to ship goods internationally. It allows products to be classified at source so that the required data is collected before goods are shipped thus negating delays. We will be developing our product offer and services to support businesses in progressing further in their trade digitisation journey to meet the expectations set out in this important Act to realise the future of digital trade.”

Find out more about our customs classification solution, TariffTel, how the platform supports businesses in avoiding border delays and non-compliance fines with inaccurate HS codes.

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If you’re involved in international trade, you’ll know the significance of compliance in shipping goods across borders cannot be overstated and that navigating different countries’ customs procedures is complex and time-consuming. Beyond being a regulatory obligation, compliance is the keystone that ensures a smooth, efficient, and risk-free international shipping experience.

There is a digital revolution taking place right now in compliance which is changing the way we operate. Where some businesses still operate customs classification by manual processes, many forward-looking businesses have invested in solutions such as TariffTel in a bid to expel the grey areas arising from manual inputs and are increasingly looking to augment their capabilities and accuracy with technology that can support the whole business. Customs classification is important for all businesses who import and export goods internationally, affecting many different departments in a business from sales to warehousing, all those who contribute to ensuring stock arrives on shelves or machine parts are available in the warehouse at the right time. Hold ups in shipment can mean extra costs and missed potential sales so compliance in assigning the correct HS codes and ensuring goods arrive at their destination on time has never been more critical. Business critical in fact.

This blog delves into why compliance is now no longer just a tick-box exercise for businesses, but a necessity to get right every time, when it comes to global shipping operations. We look into why upholding a rigorous stance on compliance serves as a protective shield against potential shipping roadblocks.

Understanding the complexity of international shipping

As businesses expand beyond their domestic borders, they encounter the intricate web of international shipping and customs regulations. Each country presents its own set of import and export rules, duties, tariffs, and documentation prerequisites. Successfully manoeuvring through this intricate landscape requires a careful and diligent approach to compliance. A single misstep can set off a chain reaction of delays, penalties, or even the seizure of goods. Embracing and prioritising compliance is without question a strategic imperative, enabling companies to navigate this complexity smoothly whilst ensuring business continuity, and safeguarding reputation.

It’s important to note that compliance isn’t solely confined to customs and border control agencies. It extends its reach throughout the entire shipping process, encompassing elements such as precise documentation and transparent declarations. Neglecting these vital aspects can cause disruptions in supply chains, leading to delivery delays and potential revenue loss.

Risks of non-compliance

By embracing compliance, companies not only ensure regulatory alignment but also build a robust shield against potential risks.

Financial:
Non-compliance with international trade regulations can cast a shadow over a company’s whole global operations, potentially bringing about financial setbacks or damaging a company’s reputation. Among these risks, financial penalties and fines act as deterrents and fines can be back-dated for 3 years to make up for under-payment of duties owed, for example. Governments and regulatory bodies across countries enforce compliance through fines, which can escalate quickly depending on the severity of the violation. Such penalties can mean that funds are diverted from elsewhere in the business such as growth initiatives or employee development.

Delays and disruptions:
Delays and disruptions emerge as another critical risk arising from non-compliance. Customs and border control agencies play a pivotal role in international trade, with the power to halt goods for inspection or verification of documentation. Non-compliant shipments are susceptible to longer processing times, leading to shipment delays that can fall through the supply chain. Consequently, production schedules may be thrown off track, triggering a domino effect on downstream processes and customer commitments.

Confiscation of goods:
The threat of goods confiscation looms as a tangible risk, particularly for companies that overlook or deliberately sidestep trade regulations. Customs authorities possess the authority to seize and hold goods that fail to comply with custom regulations. This can be financially disastrous, as the company not only loses the value of the confiscated goods but also incurs additional costs associated with storage, retrieval, and potential legal proceedings. It can also impact supplier relations.

Loss of market access:
Another risk is the potential loss of market access. Non-compliance can trigger trade restrictions or bans that restrict a company’s entry into certain markets. This not only limits growth opportunities but also weakens the company’s global footprint. Similarly, the removal of trade privileges can be a severe blow to companies that rely on preferential tariffs or trade agreements to remain competitive.

Brand reputation:
The ethical consumer of today has high expectations for businesses they buy from and being compliant is something they look for in their ethics and values. Businesses that prioritise compliance are seen as responsible and trustworthy, fostering brand loyalty and customer advocacy.

Navigating trade compliance

Compliance and customs classification go hand in hand in today’s trading environment. Where once assigning HS codes may have been siloed to a small team, it now expands to many areas of a business. It involves a more collaborative approach and is considered a business-critical function for large enterprises as well as expanding businesses trading internationally and with growth in their sights.

Having the right technology solution in place to accurately document, manage and assign HS codes across all areas of the business involved in the supply chain ensures a more streamlined approach where compliance is at the centre. A solution like TariffTel is an advanced customs classification solution, ensuring accurate and compliant HS code assignment every time and is trusted by leading businesses such as M&S, boohoo, Primark and ASDA. TariffTel empowers businesses to make informed decisions about their global trade operations and confidently navigate the intricate world of compliance.

To book a demo and find out more about TariffTel please contact our expert team.

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Preparing early for sales peaks can put retailers at a considerable advantage. Not only can they plan for the increase in demand of certain popular goods and ensure products are at the right destination to meet consumer demand, but they can also ease pressure on product classification teams who each year are faced with mounting numbers of products to classify and shepherd compliantly through complex customs procedures.  

Each year our TariffTel solution, which automatically classifies products assigning the correct HS codes to a range of products from homewares, to fashion and food, supports retailers such as M&S, Primark and ASDA in being prepared for Christmas and Black Friday demand. Our experienced team ensures that any questions over classifications are resolved quickly by taking the time to understand the more complex classifications. Here, Daniel Mcmenemy, who works within our TariffTel solution answers some common questions about how businesses can prepare now to capitalise on the Christmas rush. 

Q. What are the common problems retailers face around classification during busy sales periods

Classification is a complex area, often requiring specialized knowledge and expertise, and retailers can face a variety of challenges during busy sales periods.

For example, during these periods retailers often offer a wide range of products, or variations of existing ranges, and this can make classification challenging, particularly if the products lack key pieces of information required to classify correctly, such as the construction and material breakdown.

Furthermore, working from spreadsheets, trying to hold a great deal of information across multiple ranges, from various suppliers, which feed into different departments is an extremely time-consuming manual process.

Alongside this, the HS Tariff is frequently updated, introducing new codes, removing the old, and updating interpretation. Meaning that a classification which was accurate last year, may now be incorrect.

Q. How can these problems be avoided?

Using an automated classification system such as TariffTel can help alleviate these problems. TariffTel acts as a centralised hub in which all product data is conveniently held, and the system allows internal communication between retailer and suppliers. The TariffTel team also handles the maintenance of your commodity codes, paying close attention to any Tariff Code changes, or changes to the interpretation of the Tariff, and making sure the system remains up-to-date and accurate.

For example, when classifying plush stuffed non-human toys for Christmas, it is important to understand what the Tariff considers to be ‘stuffed’. Taking a textile cuddly animal toy as an example, this could fall under two different classifications, with differing duty rates. Were it fully stuffed with synthetic fibres like arms, legs, body and head, it would meet the definition of ‘stuffed’ proffering a duty rate of 4%.

However, if the toy had a plastic skeletal structure, with a plush textile cover, it would not meet this definition and instead proffer a 0% duty rate.

Now, if the toy had a stuffed head, arms and legs, but an electronic voice box in the centre, according to the European Explanatory Notes, this would be considered a stuffed toy, as the stuffed elements retain the essential character of a stuffed toy.

The TariffTel team monitor these interpretive updates and adjust the system accordingly, making it easy to get the right code for your product.

Q. Which common Christmas products can cause problems when classifying?

There are many Christmas products which can be difficult to classify accurately, particularly when trying to understand what can be classified as a ‘Christmas Article’ of 9505 10 and what is not permitted under this heading.

Christmas Articles of this heading are restricted in what they are allowed to portray, for example, a decorative representation of the Nativity, can be classified within this heading, whereas a decorative snowman, would not be classifiable here. Decorative ‘Christmas Articles’ designed to be placed around the home during the holiday, must be recognised as holiday articles due to longstanding national traditions, as opposed to simply being related to the winter season.

However, this is not the case with hanging ornaments of non-durable, lightweight materials, used to decorate a Christmas Tree, as these products do not need to have any connection to the holiday season. For example, a hanging snowman would be classifiable as a ‘Christmas Article’ of 9505 10, whereas a decorative standing snowman would not.

More technologically advanced Christmas products offer a different level of complexity. Drones were introduced into the Tariff in the 2022 update, and we now need to consider whether a drone is a toy, or if it is an unmanned aircraft. A toy drone has limitations on what it is capable of, such as, limited flight height, distance, flying time and speed, and must feature easy-to-use remote controls. Furthermore, it may not have any sophisticated technological components, such as GPS, nocturnal visibility, or night flying requirements.

Q. Are there any additional things to think about when exporting or importing products to Europe or the US?

There is often a difference in the level of complexity between the EU and the US, in regards to certain products. Using garments as an example, the difference between classifying a knitted Christmas jumper in the EU tariff vs a knitted Christmas sweater for the US is surprisingly large.

For the EU, a Christmas jumper falling under heading 6110 is a relatively simple classification where we would ask; what is the material breakdown? Is the garment for men, women or unisex? Is it hand-made or not hand-made? And – for certain materials – is the garment a lightweight fine knit roll, polo or turtleneck?

For the US, we would need answers to most of the same questions, as well as further information. The HTSUS holds provision, at a statistical level, for ‘Sweaters’ which are required to have a stitch count of 9 or fewer stitches per 2 centimetres measured on the outer surface of the fabric. There is also provision for ‘Sweatshirts’ which are required to have a snug-fitting bottom and cuff, no full frontal opening, and be significantly napped on the inside.

Alongside this, we have been calling the EU Christmas garment a ‘jumper’, whereas in the HTSUS a ‘jumper’ is actually defined as a garment similar to, what we in the UK, would know as a pinafore dress. As you can see the difference between the amount of work required to classify this particular garment at an EU or US level differs significantly.

Q. What are your top 3 tips for ensuring retailers have the right stock on shelves this Christmas? 

1) Be proactive about classifying products and don’t approach it as just a tick box exercise in ensuring you have the right documentation, classification is crucial and getting it right initially will save time and money down the road.

2) Invest in technology to support you with the continual changes to HS codes, as well as the interpretation of the Tariff, to ensure you are up to date and compliant.

3) Educate yourself and your team and when in doubt source help from expert teams – classification is a complex field and often requires debate and research to determine the correct code. Involving specialists who understand the interpretive rules of classification and who know the tariff can help save on non-compliance fees and shipment delays.

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The TariffTel team were at the Institute of Export and International Trade Membercon 2023 event in Liverpool which brought together industry leaders and visionaries to discuss all the challenges and issues they’re seeing today in global trade. It was a chance to hear from experts on important topics such as freeports, green trade and export controls and a time to collaborate, ask questions and learn from success stories from businesses that have overcome hurdles when exporting and importing goods internationally.

Our Head of Sales, Darren Wareing, was invited to be involved in a panel discussion on ‘Managing the costs of international trade’, which was a jam-packed session, clearly appealing to many business leaders and supply chain executives who face increasing costs relating to export controls across their supply chain. As part of the panel, compliance in customs procedures, including assigning correct HS codes to goods at the start of their journey in the supply chain, was a big focus. The costs of non-compliance are significant, and whilst the process of getting things right is complex, the panel discussed the resources that are available to businesses to make things simpler and quicker.

Having expertise within your team plays an important part in meeting compliance standards. A well-trained, knowledgeable team can support your business in understanding the terminology, processes and requirements involved, but technology and automated product classification solutions like TariffTel, can transform operations and ensure compliance is met for every single product. This is particularly true when managing large numbers of SKUs each month.

As Darren said, “The reality of penalty fines and delayed shipments if HS codes are wrong, or you have incorrect paperwork on customs declarations, are not worth contemplating. HMRC can issue fines for incorrect classification, especially if duty has been under declared and under paid. If a shipment is held at customs because the paperwork or customs entry isn’t correct, then demurrage or storage costs can be incurred. This is much worse at the port of entry. A British retailer had ocean containers held in the US due to border control difficulties. US customs required extra details about product composition and manufacturer documentation. This resulted in very high demurrage costs plus loss of sales, and reputational damage.”

Another complication is that HS codes can change regularly according to updates to the Harmonised System that standardises numerical methods of classifying traded products and is used by customs authorities worldwide. This means using out-dated HS codes can be more common than people think. Find out more on the intricacies of HS codes.

Business can safeguard against this by working with a platform that automatically updates these changes as and when they happen, like TariffTel. Also, by tapping into the valuable resource of the teams behind the technology who work hard to keep systems updated. These teams have a wealth of knowledge and experience to help businesses understand even the most complex of classifications.

There was also discussion about customs systems not marrying up with each other that can cause added confusion for businesses trying to navigate the correct approach. For example, in the past, some businesses have experienced problems with Export Health Certifications (EHC) and the tariff book not matching up. For food exporters this presents a problem that the panel agreed needed to be addressed by HMRC.

The panel then moved on to discussions around supply chain efficiency and the role of technology in managing international trade costs. Darren explained, “Data is everywhere and in various forms. This unfortunately creates data silos which are an operational overhead with teams having to go to many systems and sources to manually create reports. It’s inefficient, time consuming, and not always reliable.

The key is to centralise your data from single verified sources, rather than from multiple sources, department or people. Make sure you reference the data and don’t duplicate anywhere else. By using robust integrations, such as industry standard API’s, you can enable rapid data exchanges between all parties and avoid disparate systems, giving you one single version of the truth.”

Membercon2023 proved a great event to discuss and debate the complexities of global trade. For anyone who missed the event, or who attended and would like to pick up discussions on what a trusted customs classification solution such as TariffTel can achieve for your business, please get in touch. We are happy to share how we support long-standing customers such as M&S, Primark and ASDA with their customs classification, ensuring compliance and visibility across export controls and procedures.

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They join a talented team of skilled customs classification specialists who are driving forward our TariffTel solution ensuring goods reach their destination without the hassle of border delays and non-compliance fines which inaccurate tariff codes often can bring, as retailers know at their cost. 

Both are passionate about product classification and HS codes, researching and understanding the interpretive challenges each product can present. One of our specialists, Daniel Mcmenemy, discusses the interpretive challenges of classifying Summer outdoor products in a recent blog.  

Harrison Bay Joins from Harbour Shipping where he held the previous position of a Customs Entry Clerk, responsible for the smooth and timely running of customs procedures. His role involved comparing international shipment data with source documents and checking for accuracy in data for customs clearance into the UK from HMRC. As well as completing various customs entry declarations and supporting documents e.g. licenses. At TariffTel, he brings these data skills and more to ensure the TariffTel database is fully up to date, liaising with customers to solve even the most complex of classification questions.

Elizabeth Pascoe joins from Lidl where she was a Customs Officer, she was responsible for collecting detailed information from various sources to enable correct classification and auditing whilst also ensuring commodity codes, preference, excise codes and import controls are correct throughout Lidl GB. Prior to that she worked for a specialist logistics company that ships Fine Art and Antiques. Here she held the position of a Shipping Administrator where her role involved collating and shipping high value shipments internationally and nationally ensuring the correct TA, Export Licences and CITES for customs clearance. Elizabeth’s role at TariffTel as a Customs Administrator will see her work across all elements of our TariffTel solution whether businesses are shipping 100+ SKUs or 100,000+ SKUs. 

See more about what our TariffTel team get up to on a day to day basis and read our employee spotlight from one of our Customs Classification Specialist.  

Follow us on LinkedIn to hear more from our team and what they get up to. 

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What’s his favourite thing about customs classification? Well, he likes the interpretive challenges it presents. Every different product area presents a new challenge to research and understand how it should be classified. For some real life examples, take a look at the complexities his team regularly work through when classifying seasonal products for Easter and Summer.

Let’s dive in with some more questions.

Can you tell us more about your journey to becoming a customs classification specialist at CORE? 

As with most people working in this field I didn’t decide as a child that I wanted to work in customs classification when I grew up! My previous role was managing the mail centre in Salesforce’s London office, and as that involved shipping between the UK/EU/US I was introduced to commodity codes. I wanted to be sure that I was classifying shipments correctly, so I signed up for courses on customs classification. One of these was the UK Customs Academy where I completed the Certificate in Advanced Customs Compliance with a Distinction grade.  

I wanted to work more specifically within customs classification and was very lucky to speak with Elizabeth Davies who is the Customs Systems Manager at TariffTel, who told me all about the opportunities here. Not only do I get to develop my knowledge and learn new things everyday, I also have the added benefit of working with a bunch of very talented people who are all as equally interested in classification as I am! 

What does a typical day look like for you? 

The main focus of my day involves researching a particular garment type by exploring the Tariff Notes/Explanatory Notes for the relevant Chapter, as well as related rulings, guides and webinars to understand the classification requirements. This is why classification is complex for retailers and where we can help in-house teams as we do all the heavy-lifting with the research to make sure our customers such as M&S and Primark know all the minute classification details for a given product.  I then convert this information into unique Item Types within our database, which account for all variations around that garment’s classification, and develop clarifying information to help our customers decide which option to pick.  

Put simply, my job is about pulling complex information from multiple areas, interpreting how it fits within the process of classification and making it understandable to everyone. It often takes a lot of research and much discussion before agreeing on some of the trickier items. Alongside this I also liaise with our customers to answer specific questions about a product’s classification. My days are varied and often involve a great deal of reading and discussion in order to continually improve our extensive TariffTel database. 

What has been your biggest accomplishment while working here? 

Improving my own working knowledge of garment classification for the US Tariff has been a huge personal achievement for me, as it introduces an interesting layer of complexities when accounting for the language differences.  

For example, did you know that in the US the word ‘jumper’ actually refers to a dress similar to a pinafore, rather than the warm pullover we are accustomed to in the UK! Our combined knowledge in this area of UK/US classification means that we have developed this section of the TariffTel database enormously, much to the appreciation of our customers who ship to the US.  

What skills do you need to work in customs classification? 

Curiosity, a methodical way of working, attention to detail and a good memory are great traits to have. There is an exceptional amount of reading and research involved, and the language is not the most user friendly at times, so being able to focus and read through these documents while retaining the information relevant to the product you’re classifying is key.  

What’s the best advice you’ve ever received and how has it impacted your career? 

The best advice I have received was to prioritise a healthy work/life balance. Work is important and I greatly enjoy what I do, however I strive to maintain a healthy balance between my personal life and work life, and make sure to take time for my own mental wellbeing.

What do you do out of work for fun? 

I try to stay healthy and exercise during the week, and I’m attempting to learn Italian at the moment. I also love reading, the Lord of the Rings trilogy is an all-time favourite, and I’m currently on the first book of the Dune series. Finally, I’m a fan of Dungeons and Dragons and frequently run campaigns for friends, one of which lasted for over three years! 

We look forward to sharing more stories from our talented team. Follow us on LinkedIn to hear more from our team and what they get up to. A big thank you to Daniel for kicking off our series.

You can see more on our talented team here.

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Unlike previous years when demand far out stripped supply and getting hold of a comfy outdoor sofa meant a wait of 6+ months, savvy retailers like M&S are more than prepared this year, knowing developments they’ve made in digitising their supply chain will stand them in good stead to cater for all demands this Summer. And with families and friends getting outside for the King’s Coronation, many have been getting their gardens ready even earlier this year. 

Why prioritise customs classification 

Classifying Summer products correctly is an important step in the buying process to ensure goods arrive in time for the Summer rush. Our customer M&S has been using our automated customs classification solution TariffTel for numerous years to assign tariff codes correctly and ensure compliance in customs procedures every time. Not only are they kept automatically up to date with changes to the HS code system, as and when they are made, but our expert team works with them throughout the year to solve potentially complex classifications.  

We’ve talked previously about how a gold leaf chocolate carrot at Easter presented a few challenges when classifying, in this blog, we speak to Daniel Mcmenemy, one of our customs classification experts, to look at some popular outdoor Summer products which require some special consideration when classifying this year. 

Classifying garden furniture

Garden furniture is often top of people’s wish list in Summer. How easy is it to classify garden sets like sofas, tables and lounge seats? When it comes to classifying garden furniture, the type of material used is generally not a major factor as most garden furniture can be classified under heading 9401/9403. This heading is focused on whether the product is made of wood, metal or plastic, and where it is used, such as in an office, kitchen, or bedroom. However, the classification of garden furniture can become more complex when dealing with product sets that include multiple items, such as a sofa, chair, and table. 

In such cases, determining the appropriate classification requires us to identify the essential character of the product. This means understanding which item in the set imparts the essential function or purpose of the product. This can be determined by analysing the primary use of the set and the relative value of the items in question. By identifying the essential character of the product, you can ensure that it is classified correctly and avoid any issues during the customs clearance process. 

In the case of this sofa, chair and table set from M&S, the sofa/chair and table are classifiable to different chapters in the tariff, however as they all serve the same function, they could be classified under one heading which imparts the essential character. To determine this, we can look at the primary use of the set, as well as looking at the value of the items in question. For example, if the value of the sofa outweighs that of the table, the classification would be against the sofa, and vice versa if the table was the higher value. 

Classifying multi-use fire pits

A cross between a fire pit and a table typically means that this dual-use item is classified according to its essential characteristic – the fire pit, rather than the table.

Let’s take the example of this M&S product which is particularly intriguing as it presents a unique classification challenge due to its multifunctionality. It can function both as a table and a steel burner, and following the General Rules of Interpretation it would be classified based on the heading that provides the most specific description or, failing that, the heading that covers its essential characteristic. In this case, the product is primarily described as a firepit, with the added benefit of being a versatile piece that can also function as an outdoor coffee table. Additionally, the value of the firepit far outweighs that of the surrounding table. As a result, we would classify this product as a firepit, as it provides the primary function of the item, while the table serves as a secondary feature. Keeping all of these factors in mind can help ensure accurate classification of multi-use products. 

Classification of outdoor lighting – Increases in solar-powered and LED 

To understand how the tariff changes over time, let’s take a closer look at this example: solar-powered lighting.  

Historically, prior to 2022, the tariff did not provide specific provisions for solar energy-powered lights. However, with the recent five-year update to the Tariff in 2022, there are now specific headings for “Photovoltaic” lighting. It is important to note that these headings only apply when the photovoltaic lighting is designed solely for use with LEDs. This change in focus towards LEDs within the Tariff is also noteworthy, as they were not as frequently mentioned before the 2022 update. When it comes to lighting, there are several considerations to keep in mind, such as the location, the light’s intended use, the power source, the material, and whether it is exclusively usable with LED light sources. 

What’s the HS code for bunting? 

Many people like bunting in their gardens all year round, and the King’s Coronation means we are seeing it even more.  

The classification of bunting is typically straightforward, falling under heading 9505 as a “Festive, carnival or other entertainment article.” However, this classification only applies to bunting made of non-durable materials like paper or plastic. If the bunting is constructed from a more durable material, such as woven cotton like in this particular case, it falls under a different heading. 

In this instance, the appropriate classification for the cotton bunting would be under heading 6307 as an “Other made up Textile Article.” 

During peak sales seasons, it is vital your business is prepared for the complexities that classification can throw up. Whether you’re a growing business, or a larger enterprise, implementing an intuitive, automated system like TariffTel for customs classifications can significantly reduce the time required to classify products and facilitate communication between vendors. This can mean the difference in getting the up-to-date information you need to classifying product quickly and compliantly.   

If you have a question about classification, get in touch with our expert team. Don’t’ forget to follow us on LinkedIn for more classification updates.  

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