If you export goods, you must be concerned with using the proper classification of your products. I hear from many exporters who are a bit confused about the Export Control Classification Number (ECCN) classification for their products and the Harmonized System (HS), Harmonized Tariff Schedule (HTS), and Schedule B numbers of their products.
First, it’s critical to understand that these classification systems have different purposes:
The ECCN is for export control purposes.
ECCN is used to determine whether or not an item requires special controls before export. You may need to apply for an export license or use a license exception before you can export certain products to other countries.
HS, HTS and Schedule B numbers allow customs to assess proper duty and taxes on imported goods or to collect export statistics.
HS codes, also called HS numbers, are a six digit classification used by customs authorities around the world to identify the duty and tax rates for specific types of products. You’ll use an HS number when you reference the classification with your customers, vendors, and anyone outside the U.S.
Many countries, including the United States, add additional digits to the HS number to further distinguish products in certain categories. These additional digits are typically different in every country.
The Harmonized Tariff Schedule of the United States is a 10-digit import classification system specific to the United States. HTS codes, also called HTS numbers, are administered by the United States International Trade Commission (ITC).
Commodity duties are assessed based on this classification. An HTS code takes the same form as an HS code for the first six digits, then has four differing last digits. If you are a U.S. importer, this is the code you must use.
The Schedule B code is a 10-digit subset of HTS codes for U.S. exporters.
Schedule B codes are used for statistical purposes by the U.S. government to monitor U.S. exports. Companies that export typically use the appropriate Schedule B codes for their products rather than HTS codes on their export paperwork, and when filing their electronic export information (EEI) through the Automated Export System (AES). Since the Schedule B codes are a subset of HTS codes, it’s usually quicker and easier for exporters to classify products under Schedule B than HTS.