C5—Harmonized Tariff (HTS) Classification

Subscriber price: $307.00, Non-subscriber price: $390.00
Estimated total study time: 23 hours 27 minutes

Warning: This course covers global classification to the first six digits in Chapters 1-97. It does not include country-specific parts that are generally found in Chapters 98 and 99.

For students concerned with imports into the US, refer to CB5u—Intro to U.S. Customs Brokerage, Part 5: U.S. Customs Tariff (HTSUS) Classification
For students looking for help with Schedule B classification, refer to E3u—U.S. Export Clearance Requirements, Including Schedule B Classification

The precepts of classification are methodically addressed in this course to provide learners with an in-depth knowledge of the structure and the rules of legal Harmonized Tariff classification.

The World Customs Organization (WCO) updates the Harmonized Commodity Description and Coding System approximately every five years. This course reflects the most recent WCO revision. The HS is the foundation for the import and export classification systems used in the United States. Students should use any recent national Harmonized System (HS) or Schedule B for the many practical exercises in this course. This basic training covers the structure of the HS, how to apply the General Rules of Interpretation, the difference in classifying parts and accessories, and many practice classification questions up to the first six digits, which are the same internationally.

Note: We provide links to download tariffs of several countries. Full chapter and heading notes are required to complete some exercises, so online tariffs that do not show notes will not suffice.

The Structure of the Harmonized System (C5)

The Harmonized Tariff System is subdivided into various elements which together form the structure of the nomenclature. In order to perform accurate classification it is essential to understand the relation between the elements. These elements are sections, chapters, subchapters, headings, subheadings, and notes. This first lesson deals with the general overall structure, and the breakdown by sections and chapters.

(Estimated study time: 1 hour 8 minutes)

Introduction
Background of the Harmonized System
- Reasons for Global Harmonization
- The Core Classification System
- Periodic Harmonized System Updates
Harmonized System Framework
The Harmonized System is Divided into Sections
Sections Are Divided into Chapters
- Chapter and Heading Listing to the Rescue
- Chapters 1–97
- Chapters 98 and 99

Harmonized Tariff System: Headings, Subheadings and Notes (C5)

This second lesson continues with the breakdown of the Harmonized System (HS) by headings and subheadings and chapter subdivisions. Then we take a look at section, chapter and subheading notes. Notes hold the key to exclusions and definition of terms. Practical application of notes to classification will be discussed.

(Estimated study time: 1 hour 17 minutes)

Introduction
Chapters Are Divided into Headings
Chapters are Sometimes Organized by Subchapters
Headings Are Divided into Subheadings
- Subheadings are not born equal!
- One-Dash Subheading Example
- Two-Dash Subheading Example
Section Notes and Chapter Notes
- Defining and Refining Classification Choices
- Exclusions from Classification in Section and Chapter Notes
- Definitions of Goods or their Composition in Section and Chapter Notes
Subheading Notes are Shown After Section and Chapter Notes
- Subheading Notes are Strictly for Classification at the Subheading Level
- Subheading Notes that Apply to a Chapter
- Subheading Notes that Apply to the Whole Section
Practical Application of Notes
Visible and Invisible Elements of the HS
The General Rules for Interpretation — a Mandatory Part of Classification

HTS Language and Punctuation (C5)

Apart from the very structure of the Harmonized Tariff System (HTS), classifying involves the knowledge of the meaning of some Latin expressions, attention to punctuation, and awareness of the language of the Harmonized Tariff System and its different versions (in national tariffs). These are the characteristics of the HTS that we will review in this lesson.

(Estimated study time: 1 hour 6 minutes)

Introduction
Understanding What Is Written
- The Language of the Harmonized System
- Technical Language and Vocabulary
- Latin Expressions in the HS Represent Specific Concepts
- Punctuation in the Harmonized System Influences Meaning
- Use of the Semi-Colon in the Harmonized System
- Interpreting the Harmonized System When the Comma is Used
- Thorough and Patient Reading Is a Requirement

The General Rules of Interpretation - Rule 1 (C5)

Classification in the Harmonized Tariff System is governed by six General Rules of Interpretation. The General Rules provide a uniform and mandatory system to read and interpret all the elements of the HTS. Knowledge and understanding of those rules is the single most important prerequisite to accurately classify goods. We will begin with Rule 1 which deals with the legal elements.

(Estimated study time: 1 hour 17 minutes)

Introduction
Introduction to the General Rules
- The Operating System
- Short Names for the Rules
- The Six General Rules at a Glance
- The General Rules: Simplified
General Rule of Interpretation Number 1
- The First General Rule of Interpretation is the Most Important
- Section, Chapter and Subchapter Titles are for Reference Only
  - Chapter and Section Titles May be Misleading
  - Certain Underwear, Even if Knitted or Crocheted, is Classified in Chapter 62
- Classify According to Legal Elements
  - Terms of the Headings are the First Legal Element
  - Consider the Terms of Relative Section and Chapter Notes
  - Check the Legal Notes (Section and Chapter) When Deciding on a Heading
  - General Rules 2 to 6 Must not be Used if they Contradict Rule 1
  - When the Text of a Heading Creates a Hard Stop at Rule 1
- Rule 1, in Conclusion

The General Rules of Interpretation - Rule 2 (C5)

This lesson details how General Rule 2 expands the scope of headings. It covers incomplete, unassembled, mixed or composite goods. Rule 2 tells us that some goods should be classified in headings even though they do not perfectly match the terms of those headings.

(Estimated study time: 1 hour 19 minutes)

Introduction
General Rule 2 Broadens the Scope of Headings
General Rule of Interpretation Number 2(a)
- General Rule 2(a)
- How to Classify Incomplete or Unfinished Articles
- Examples of the Essential Character of Incomplete Articles
- "Blanks" are Considered Unfinished Articles Because they Require Additional Manufacturing
- Because they are manufactured into many different articles and do not have the essential character of any particular good these goods are to be classified as what they are: bars, rods, pipes or sheets.
- What to do with Unassembled or Disassembled Articles
- Unassembled or Disassembled Articles Must be Ready for Assembly
- Examples of Unassembled or Disassembled Articles
- What if the Articles are Both Unassembled or Disassembled AND Incomplete or Unfinished?
- Unassembled AND Incomplete: The Double Test
General Rule 2(b)
Goods Consisting More than One Material or Substance
Materials and Substances Mixed with Other Materials or Substances
Goods or Articles Made of a Given Material or Substance
Choosing a Heading When Two or More Headings May Apply
Be Aware of Possible Rule 2 Exclusions
- Rule 2 must not Contradict Rule 1
- Some Heading Terms May Forbid Using Rule 2

General Rules of Interpretation - Rule 3 (a) (C5)

In this lesson we will discuss the first part of Rule 3. Rule 3 is the referee. When a good is at first glance classifiable in two or more headings, it is Rule 3 that will tell us which heading to use. Rule 3(a) directs us to the heading whose text better identifies the goods.

(Estimated study time: 34 minutes)

Introduction
Rule 3 The Referee...
General Rule 3(a)
The Heading Providing the Most Specific Description
When No Heading Specifically Describes the Mixture, Composite Good or Set
Examples of Headings that Fall Under Rule 3(a)
Steps for Classifying Two or More Plausible Headings
What happened to all the examples?

General Rules of Interpretation - Rule 3 (b) (C5)

As discussed in the previous lesson, Rule 3 tells what to do when goods are classifiable in two or more headings. This lesson will provide training on when to use essential character to determine the proper heading.

(Estimated study time: 53 minutes)

Introduction
General Rule 3(b)
Material or Component Giving Essential Character
Mixtures
Composite Goods Consisting of Different Materials
Composite Goods Made up of Different Components
Goods Put Up in Sets for Retail Sale
Goods NOT Considered to be Sets for Retail Sale
Use Essential Character Only if Applicable

General Rules of Interpretation - Rule 3 (c) and Rule 4 (C5)

Rule 3 tells what to do when goods are classifiable in two or more headings. This lesson will provide training on when to move past essential character and look at the third part of Rule 3 to classify numerically in the last heading. Then we will learn when to use the rule that applies when all else truly fails. Rule 4 helps classify something that can absolutely not be found elsewhere in the nomenclature.

(Estimated study time: 36 minutes)

Introduction
General Rule of Interpretation Number 3(c)
- General Rule 3(c)
- Heading Appearing Last in Sequence
- Rule 3 Exception; Legal Elements Take Precedence
General Rule of Interpretation Number 4
- General Rule 4
- When Everything Else Fails

General Rules of Interpretation - Rule 5 (C5)

In this lesson we will learn how to classify packing materials and containers. This will include containers specially made for articles, as well as reusable and non-reusable containers.

(Estimated study time: 52 minutes)

Introduction
General Rule of Interpretation Number 5
- Boxes, Cases, Packaging and Packing
- General Rule of Interpretation Number 5(a)
  - General Rule 5(a)
  - Specially Shaped or Fitted Cases, Boxes and Similar Containers
- General Rule of Interpretation Number 5(b)
  - General Rule 5(b)
  - Rule 5(b) is not Binding
  - Two Categories of Packing Material and Containers
    - Non-Reusable Packing Material
    - Reusable Packing Material

General Rules of Interpretation - Rule 6 and More (C5)

Rule 6 goes into determining the proper HTS subheading, but only after finding the proper HTS Heading first! We also want to point out a special note in chapter 62 and summarize the General Rules.

(Estimated study time: 59 minutes)

Introduction
General Rule of Interpretation Number 6
- General Rule 6
- Classification in Subheadings
  - Rule 6 is Similar to Rule 1
  - Classification at the Subheading Level
  - Only Subheadings at the Same Level Under the Chosen Heading are Comparable
  - Section and Chapter Notes May also Apply to Subheadings
An Example of Chapter Notes Regulating Classification Within Subheadings
Summarizing the General Rules of Interpretation

Putting It All Together

After learning the theory of the HTS the next step is to put it all together to make it work as a coherent ensemble. This is where we define some common pitfalls and discuss irregular situations.

(Estimated study time: 52 minutes)

Introduction
The Rules as a Framework
Practical Hierarchy within the Rules
A Global Classification Strategy
A Tip on Searching for the Proper Heading

Factors Influencing Classification

How goods are presented is a big part of determining the correct classification. The use and purpose of the good is also an important factor. We will discuss these and show that even when all the facts are given, the outcome can still be subjective.

(Estimated study time: 1 hour 1 minute)

Introduction
Factors Influencing Classification
- Seeing Goods "as Presented"
- Use and Purpose of Goods
- Classification Can be Subjective in Spite of the Notes
- Description of Goods from the Commercial Invoice
- Conducting a Classification Inquiry

Classifying Parts and Accessories (C5)

Parts and accessories are classified according to what they are, of and by themselves, or according to the article of which they are a part of, under conditions that vary from commodity to commodity. In this lesson, we will review section and chapter notes as they apply to parts, residual parts headings and the double approach to the classification of parts.

(Estimated study time: 26 minutes)

Introduction
No General Rule Applicable to Parts
Classification Using The Double Approach
Application of Section and Chapter Notes
- Note 2 to Section XVI
- Note 1 of Chapters 84 and 85 Exclude "Parts of General Use"
- Note 2 to Section XV Explains "Parts of General Use"

More on Classifying Parts and Accessories (C5)

It is essential to understand that the principles for classifying parts vary throughout the nomenclature and that what is a rule in one section or chapter may not apply in another section or chapter. There are specific section and chapter conditions to consider, special classifications for parts of general use, and we must also understand the terms solely and principally in defining parts' classification.

(Estimated study time: 45 minutes)

Introduction
Parts of General Use Outlined
Section and Chapter-Specific Conditions
The Terms "Solely" and "Principally"
Sequence for Determining Classification of Parts
Notes Always Govern Classification of Parts

Harmonized System Classification Case Study 1 (C5)

The best way to learn Tariff Classification (or anything else, for that matter) is through practice.

(Estimated study time: 58 minutes)

Introduction
Case Study 1

Harmonized System Classification Case Study 2 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 2

Harmonized System Classification Case Study 3 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 3

Harmonized System Classification Case Study 4 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 4

Harmonized System Classification Case Study 5 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 5

Harmonized System Classification Case Study 6 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 6

The WCO Explanatory Notes and Other References

There are documents (paper and electronic) that provide authoritative guidance in HTS classification. This lesson is an overview of those documents.

(Estimated study time: 42 minutes)

Introduction
Reference Material Supporting Classification
- Overview of the Available Classification Reference Material
- The WCO Explanatory Notes
  - Some Answers are not in the legal text...
  - We found answers!
  - Explanatory Notes Legal Status
  - The Ultimate Reference
- Compendium of Classification Opinions
  - WCO Classification Opinions
  - Compendium of Classification Opinions Legal Status
  - Amendments to the Explanatory Notes and Compendium
- Alphabetical Index to the Harmonized System
- Other Sources of Harmonized System Classification Information
- Summary of Available Resources
  - Two Types of Resources
  - The Essentials
  - Extra Resources

Harmonized System Classification Case Study 7 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 7

Harmonized System Classification Case Study 8 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 1 minute)

Introduction
Case Study 8

Harmonized System Classification Case Study 9 (C5)

These harmonized system classification case studies consist of several six digit classification exercises.

(Estimated study time: 1 hour 2 minutes)

Introduction
Case Study 9