| WorldTariffSM |
| Frequently Asked Questions (FAQs) |
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To find a quick answer to one of the Frequently Asked Questions below, click on that question.
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The Harmonized Commodity Description and Coding System (HS) is a classification system for goods entering an importing country through Customs. Its 97 Chapters can be used to classify every commodity traded among countries. Periodically, the Customs Co-operation Council recommends revisions to the HS system to reflect changes in technology or patterns of trade. The latest revision entered into force 1 January 2007. While most countries use the most current revision of the HS, some continue to use an earlier version.
For countries using the same HS classification system, the first 6 digits are uniform; for example, HS 2204.10 should correspond to "sparkling wine" in any country using the 2007 HS system. However, certain classifications used in earlier versions of the HS system may not correspond to the 2007 HS.
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The HS classification is uniform for all countries only through the first 6 digits. Any country may choose to further break down the 6-digit classification to more specifically describe a product. Eight digits is generally considered to be fully qualified for Customs purposes, but some countries may require a 9th, 10th or further digits to completely describe the specific good being imported.
But the same 8-digit class can represent different products in different countries. For example, 2001.90.30 means "beans" in the U.S. classification and "sweet corn" in the EU-27 classification.
To find a concordance between the HS classification for your product in the U.S. and its classification in the EU-27, start at the 6-digit level and read the descriptions to find the one which best describes your product.
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MFN stands for Most Favored Nation. WorldTariff uses the MFN applied rate as the customs duty. The MFN applied rate includes any temporary or contingent rate changes and is the rate most likely to be available to most countries. All member states of the World Trade Organization (WTO) have agreed to offer the MFN rate to each other. Other kinds of trade agreements - multilateral - which involve several countries trading among each other, or bilateral, in which two countries make an agreement between themselves, may give countries a preferential rate, which may be lower than the MFN, on specific goods. Countries that are not WTO members, for example, the Russian Federation, maintain a "General" tariff for imports and "Preferential" rates for imports from countries with which it maintains trade agreements. This "Preferential" rate is considered the Most Favored Nation (MFN) rate. Countries that are not WTO members, or who have not been granted MFN status by the importing country, are subject to a general rate, which may be considerably higher than the MFN rate. For example, Vietnam is not yet a member of the WTO but the United States passed legislation granting MFN status for Vietnamese goods entering the U.S.. On the other hand, Laos, has neither WTO membership nor MFN status in the U.S. and is subject to the general rate. In the U.S., the designation "Most Favored Nation" has been replaced with "Normal Trade Relations" or NTR.
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Duty rates can be based on a percentage of the value of the good being imported (ad valorem) or the rate can be a certain amount of money based on the weight, volume, or per piece. Many countries use primarily ad valorem rates. On some products, there may be a compound rate of a certain percentage plus a specific amount of money per item.
Ad valorem rates are based on the value of the goods being imported. WTO members use transaction based valuation. For customs valuation. In general, this may be CIF or FIB.?Please see GATT Rules for Customs Valuation for a further discussion of transaction value.
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Certain processed agricultural goods entering the European Union (EU) are assessed a specific duty based on the fat, sugar and milk protein content. Because this specific rate can vary, WorldTariff uses the abbreviation "VC" to mean "variable component".
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Many taxes are assessed on the value of the product after the customs duty has been determined and applied. Thus, if the customs value of the product is US$100 and the customs duty is assessed at 10%, the duty paid would be $10. The duty paid value would be the original customs value ($100) plus the duty paid ($10), or $110.
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These are Incoterms 2000:
CFR
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Cost and Freight |
| CIF |
Cost, Insurance and Freight |
| CPT |
Carriage Paid To |
| CIP |
Carriage and Insurance Paid To |
| DAF |
Delivered at Frontier |
| DES |
Delivered Ex Ship |
| DEQ |
Delivered Ex Quay |
| DDU |
Delivered Duty Unpaid |
| DDP |
Delivered Duty Paid |
| EXW |
Ex Works |
| FCA |
Free Carrier |
| FAS |
Free Alongside Ship |
| FOB |
Free On Board |
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