The Contents of the Harmonized System Convention

Harmonized System comprises 6-digit numerical codes.
All contracting parties must apply the General Rules of Interpretation of the Harmonized System, the terms of heading and all Section, Chapter, or Subheading Notes without modification to the scope of the Section, Chapter, heading or subheading.
A Contracting party must publicly disclose its import and export trade statistics in accordance with the 6-digit codes of the Harmonized System.
A Developing Country is permitted to delay the application of some or all the subheadings (partial application) for five years or more upon request.

Objectives for the Establishment of the HSC

The HSC effects uniformity in the classification of goods and standardizes commercial documents which ultimately enhance international trade facilitation. It was established in order to:
- Ensure the adoption of Internationally accepted customs language to all customs experts and public at large.
- Ensure simplification and certainty of the meaning of used Nomenclature during negotiations, application, and correct interpretation of bilateral and multilateral agreements.
- Ensure that there is a systematic and uniform classification of all goods found in the international trade.
- Ascertain an internationally uniform mode of collecting international trade data and recording of international trade statistics.

- The “Harmonized Commodity Description and Coding System“, (Harmonized System or HS), means the Nomenclature comprising the headings and subheadings and their related numerical codes, the Section, Chapter and Subheading Notes and the General Rules for the interpretation of the Harmonized System.
- “Goods Nomenclature” means a systematic naming or enumerating of all goods found in international trade along with international rules and interpretations.
- “Customs tariff nomenclature” means the nomenclature established under the legislation of a Contracting Party for the purposes of levying duties of Customs on imported goods;

“Classification of Goods” means process of arriving at a particular heading and subheading of a commodity entering the international trade.

“International Trade” means an exchange of goods between two or more countries.
“Internal Tariff” means the rate of tax in respect of all goods tradable within the Community.
“Common External Tariff” means the Rates of import duty in respect of all goods imported into the Community.
“Inter alia” means among other things.
“Prima facie” means at first sight or on the face of it.
“Mutatis mutandis” means appropriate changes having been made at the heading level.

All goods in the international trade should be classified uniformly and consistently according to a common international nomenclature. This avoids reclassifying goods as they are moved from one country to another.
It also helps in trade negotiations.
Trade figures conform to a uniform standard and can be compared internationally.
It facilitates analysis and comparisons of international trade.

A basis for Customs and Transport Tariffs
As a basis for the collection of International Trade Statistics
As a basis for Rules of Origin
As a basis for trade negotiations
As a vital element of Customs control and procedures, including risk assessment, information technology and compliance

Since coming into force (1988) of the HS, it has been partially amended after every five years in order to bring the HS Nomenclature in line with the current changes in the international trade patterns.
- The 2017 edition is the fifth major revision of the HSC. It includes 233 sets of amendments to the Nomenclature.
- Some examples of areas which were addressed in 2017 edition:
  - Recording Technological progress in the nomenclature:
  - Adapting the Nomenclature to reflect current trade practices:
  - Clarifying the texts of the Nomenclature to ensure uniform application
  - Accommodating social and environmental concerns in the Nomenclature:

What is the meaning of terms: Harmonized System, Goods Nomenclature and Classification of Goods?
Why is it important for importers/exporters to provide accurate HS Code number of goods?
Why does the Harmonized System Nomenclature undergo amendments after every five years?