How to determine the correct customs code for your imports
Customs classification is arguably the most critical element of import compliance. The HS code assigned to your goods determines virtually every other aspect of the customs clearance process: the duty rate, whether preferential treatment is available, any regulatory requirements or restrictions, licensing needs, and statistical reporting obligations. Getting classification wrong can have serious consequences.
Misclassification can result in underpayment of duties (leading to potential penalties and interest charges when discovered), overpayment of duties (eroding your profit margins), shipment delays while customs verifies the correct code, seizure of goods in extreme cases, and invalidation of origin certificates that were based on incorrect classification. Understanding how to classify correctly—or recognizing when to seek professional help—is essential for import success.
Classification is not always straightforward. Products may seem to fit multiple headings, novel products may not clearly match existing descriptions, and the technical nature of the nomenclature can challenge even experienced traders. This guide provides a systematic approach to classification that follows the methodology used by customs authorities worldwide.
Before attempting classification, gather complete information about the product. You need to know what the product is made from, what it does, how it's used, and any specific technical characteristics. For machinery, understand its function. For textiles, know the fiber composition and construction method. For food products, know the ingredients and preparation method.
Technical specifications, product literature, photographs, and if possible, physical samples all help ensure accurate classification. The more precisely you can describe the product in objective terms, the more confident your classification will be.
Start by identifying which section and chapter of the HS might cover your product. The HS is organized logically, generally moving from raw materials through to finished goods. Section XI covers textiles, Section XVI covers machinery and electrical equipment, Section XVII covers vehicles, and so on.
Within the appropriate chapter, review the four-digit headings to identify all that could potentially apply. At this stage, don't eliminate options too quickly—it's better to consider several candidate headings and then narrow down systematically.
Before relying on heading descriptions alone, read all applicable section notes and chapter notes. These legal notes can include or exclude entire categories of goods from chapters, define terms used in headings, and provide specific classification rules for certain product types.
For example, Chapter 85 note 6 defines specific terms used for semiconductor devices. Chapter 39 notes explain when plastic items should be classified in Chapter 39 versus other chapters based on their use. These notes take legal precedence over the apparent meaning of heading descriptions.
The six General Rules for the Interpretation (GRI) provide the legal framework for classification decisions. They must be applied in sequence—each successive rule only applies when previous rules don't resolve the classification.
Once you've identified the correct four-digit heading, classify to the most specific subheading. Apply GRI 6, which states that classification at subheading level must follow the same principles as classification at heading level. Subheading notes may provide additional guidance.
For EU imports, extend classification to the eight-digit Combined Nomenclature code and check the ten-digit TARIC code for any EU-specific measures. The TARIC database shows any additional duties, quotas, suspensions, or restrictions that apply beyond the basic tariff rate.
Products that perform multiple functions present classification challenges. A smartphone combines telephone, camera, computer, GPS, and other functions. Under GRI 3(b), such products are classified by the function that gives them their essential character—typically the principal purpose for which they're designed and marketed.
Products made from multiple materials may be classifiable in different chapters depending on which material predominates. A handbag with leather exterior, textile lining, and metal fittings might be classified as leather goods, textile articles, or even metal articles depending on which material gives it essential character. Consider which material the product is typically identified by and which represents the greatest value or surface area.
Parts suitable for use solely or principally with specific machines are often classified with those machines. However, general-purpose parts like screws, bearings, and electrical connectors are classified in their own chapters regardless of intended use. The distinction between specific and general-purpose parts requires careful analysis.
Retail sets containing items that would be classified differently if imported separately are classified by the item giving the set its essential character. A picnic set might contain textile (tablecloth), plastic (plates), and metal (cutlery) items—classification depends on which category predominates in terms of value, bulk, or significance to the set's purpose.
When multiple headings seem equally applicable, remember GRI 3(c): classify under the numerically last heading. But this is a last resort—always try to determine essential character first.
For maximum legal certainty, request a BTI ruling from customs authorities. A BTI provides a legally binding classification decision valid throughout the EU for six years. Both the trader and all EU customs authorities must respect the classification stated in a valid BTI.
BTI applications should include detailed product descriptions, photographs, technical specifications, samples (if relevant), and your proposed classification with reasoning. The issuing authority will analyze the product and issue a binding decision within defined timeframes.
Consider consulting customs brokers or classification specialists when dealing with novel or technologically complex products, goods with high duty rates where errors would be costly, products that might attract anti-dumping duties, regular imports of the same product line (where BTI provides long-term certainty), and situations where preliminary research yields ambiguous results.
Several official resources help with classification research. The EU TARIC database provides searchable access to the full nomenclature with explanatory notes. The WCO Harmonized System database includes classification opinions and explanatory notes. National customs administrations often provide classification guidance and databases. Using multiple resources and cross-checking results improves classification confidence.
For more information, see our guides on HS code structure, using the TARIC database, and calculating customs duties.
