What’s Changing in 2022 for Harmonized System (HS) Codes
Every year, we anticipate a variety of international shipping changes that can affect how brands reach their customers. 2022 is no different — the World Customs Organization (WCO) is introducing dramatic changes to the global tariff schedule, the harmonized system (HS). Your friends at Passport are here to breakdown what HS codes are, why they’re important, and how to best prepare for the changes in the new year.
What are HS codes and why do I need them?
In short, the harmonized system (HS) assigns a numerical code to products moving across borders. The HS codes are used by customs authorities to monitor import volumes, assess security concerns or restrictions, and accurately assign duty rates. Cross border shipments are required to have accurate HS codes assigned to every product to minimize the risk of Customs inspection, seizure, or even rejection. Accurate HS codes are crucial to an efficient supply chain and positive customer experience, as brands can risk the receiver paying the wrong tax and could possibly delay shipments.
What updates are we going to see in 2022?
The WCO makes significant updates to the global tariff schedule every five to seven years to reflect industry changes, and the updates in 2022 will reflect such an update. Examples include the elimination of a tariff code for answering machines and the addition of tariff codes for smartphones and flat panel displays.
Over 350 global codes have been updated
While many updates are in Chapter 84 (mechanical appliances, parts, etc.) and Chapter 85 (Electrical machinery, parts, etc.), given the ever changing technology landscape; many apparel, wood products and chemical tariff codes have been updated as well. Don’t assume your industry is not impacted!
The WCO has made these changes to the harmonized schedule, meaning the entire world is impacted. Make sure to utilize updated tariff schedules for every country you import into.
What happens for brands preparing for changing HS codes?
Although we know that each brand’s industry may be affected differently with the HS code changes in 2022, our team at Passport is here to help! Whether you’re looking for additional information or looking for assistance reviewing HS codes, our experts are able to walk you through the process. Feel free to contact our team to set up an exploratory call, ask any questions you may have, and learn more.