What is a commodity code

In international trade, a commodity code (also known as a Harmonized System (HS) code, Tariff code, or Customs code) is a standardized numerical code used to classify products for import and export purposes. These codes are part of the Harmonized Commodity Description and Coding System, which is maintained by the World Customs Organization (WCO).

Commodity codes are crucial because they:

1. Determine Tariffs and Duties: The code assigned to a product helps determine the customs duties and taxes that apply when goods cross international borders.
2. Facilitate Customs Clearance: Accurate commodity codes ensure smooth customs clearance by helping authorities to identify the product and apply appropriate regulations.
3. Enable Trade Statistics: These codes are used to track and analyse trade flows globally, as they provide consistent and comparable data across countries.

The commodity code usually consists of 6 to 10 digits. The first six digits are standardized internationally under the HS system, while countries may add further digits to create more detailed classifications at the national level.

For example, in the HS system:

• The first two digits represent the chapter (broad category of goods).
• The next two digits represent the heading (more specific group).
• The last two digits in the international system represent the subheading (further classification).

Some countries extend this code to 8 or 10 digits for more precise classification at the national level. More info here & here.

For instance, these are examples of HS codes for:

• Tequila
• Mezcal
• Raicilla
• Sotol
• Vodka
• Gin and Geneva
• Whiskies
• Liqueurs and cordials
• Rum