Harmonized system of tariff nomenclature

A Hot Tip about Customs Procedures in Russia

Last updated: 6 Jun 2011

During import and export transactions the participants of foreign economic activity face  to the government regulation of goods turnover. Regulated system of goods identification and classification is used for this aim. The whole assortment of merchandises has been classified and combined into the integrated nomenclature - Harmonized system of tariff nomenclature.
Measures of the tariff and non-tariff regulations of the international trade and other kinds of foreign economic activity as well as maintenance of customs statistics are based on this system.  
Since 1st January 2010 the Customs Union (CU) of Russia, Belorussia and Kazakhstan has come into force and now the customs authorities of RF use the Harmonized System  of the Customs Union (HS CU) instead of HS of the RF. The  HS CU is based on the Harmonized System of description and coding of the World Trade Organization (WTO), HS of Russia and HS of the Commonwealth of independent states (CIS).
In the HS CU each product has its own numeric code. This code consists of 10 signs; all codes are divided into 21 sections and 97 groups. The principle of definite classification of the goods to the appropriate groups must be strictly followed in the codes of HS. Correct definition of the product and its classification are the main for application of the customs payments rates, determination the customs regime and customs preferences (clause ? 50 Customs Code of the Customs Union). Herewith, the right classification of the goods and definition of its customs code are the most important part of the customs procedures.
Numeric 10-signed code of the product has the following structure according to the HS of Russia:
?? - group
???? – position
?????? – subheading (HS of the WTO)
???????? – subitem
????????? - subitem (CIS)
??????????  - subitem (Russia)

One of the main differences between the HS of CU and the HS of European Union (EU) is the quantity of signs in the code. The HS of EU applies 8-signed codes for the goods classification, however the HS of CU and Russia uses the 10-signed codes what is necessary for more precise product specification in accordance with the interests of Russia and the Customs Union.
Declarant (or its representative) is obliged to define the customs code of the product. However the customs authorities have the right to change this code, if during the customs clearance or examination of the goods the wrong customs code chosen for the goods  was revealed. Wrong definition of the functions of the goods, materials used for the production of the product, degree of the manufacturing or processing can be the reasons of mistake in classification and definition of the HS code.
It doesn’t matter the customs code was incorrectly defined intentionally or in occasion. In any case it is the violation of the customs regulations, which leads to the administrative penalties from the violator at the rate of from 50 % to 200 % of the customs value of the goods (part 2, clause 16.2 of the Administrative Code of the RF).
Thus, the customs code of the goods defined according to the HS CU is the basis for:
• Definition of the customs payment rate;
• application of the measures of non-tariff regulation for each kind of product;
• solution of the question about charging and levying of VAT and excise;
• statistics of the international trade and customs statistics;
• making decision by responsible authorities in case of the customs violation.
With regard to the foresaid it is quite important to declarant or its representative to define the customs code for the goods imported or exported with his responsibility and be aware of the mechanism of the code definition. Often inexperienced participator of the  foreign economic activity has difficulties with definition of the right customs code. In this case it is better to apply for help of qualified  and experienced specialists in this sphere.

Posted: 06 June 2011, last updated 6 June 2011
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