During the past year, we have been working diligently to ensure that our documents clearly reflect all the details and information needed for export and import clearance. This has included a project to ensure that our classifications for export are accurate.
We are stymied now. The question that we are trying to resolve at this moment is whether we should report the six-digit portion of the Schedule B code number or the full 10-digit number on our commercial invoices.
Which is best? What questions do we need to ask to make the decision that is best for us and our customers?
Stymied on the West Coast
Dear Stymied on the West Coast:
As always, I begin with, "You are not alone in this pickle barrel!" This confusion can be resolved by examining what is needed for export clearance and what is needed by the buyer or their agent when clearing the goods for import.
I'd like to reinforce what you have learned through your classification process; the 10-digit code that you've assigned to your products is based on an international structure, which is the six-digit sub-heading plus the four digits that the U.S. has added. (See the article, What's the Difference between a Schedule B Code and an HS Number?)
You, as the exporter, are required to provide to either your forwarder or your buyer's freight forwarder under the U.S. Foreign Trade Regulations 15 CFR Part 30.3(e) either the 10-digit Schedule B Code or the Harmonized Tariff Schedule (HTS) number. (There are other requirements as well. You can find the Electronic Code of Federal Regulations online.)
The buyer or their customs broker is required to provide the product classifications for customs clearance. The buyer's country uses the six-digit sub-heading to create its code; they are allowed to add up to four digits under the rules established in 1988 when the Harmonized System was adopted.
So what is an exporter to do?
Provide the six-digit sub-heading by line item on the commercial invoice and separately provide a shipper's letter of instruction or a report with the 10-digit code by line item.
Provide the 10-digit U.S. code by line item on the commercial invoice, and state that it is a U.S. code (Schedule B or HTS).
All the best!