Here's a breakdown of their definition:
Purpose:
* International trade: HS codes facilitate smooth and efficient international trade by providing a common language for classifying goods.
* Customs procedures: They are used to determine import duties, tariffs, and other customs regulations.
* Trade statistics: HS codes enable the collection and analysis of accurate trade data.
Structure:
* Hierarchical system: HS codes consist of six digits, with each digit representing a progressively more specific level of classification.
* Chapters: The first two digits represent the broad chapter category (e.g., 01 - Live animals; 02 - Meat and edible meat offal).
* Heading: The next two digits represent the specific heading within a chapter (e.g., 0101 - Live horses, asses, mules and hinnies; 0102 - Live bovine animals).
* Subheading: The last two digits further refine the classification (e.g., 0101.10 - Live thoroughbred horses; 0101.20 - Live other horses).
* Additional digits: Some countries may use additional digits to create even more detailed classifications.
Example:
* HS code 0101.10 refers to "Live thoroughbred horses."
Benefits:
* Clarity and consistency: HS codes ensure uniform classification of goods, eliminating ambiguities and misunderstandings.
* Trade facilitation: The standardized system simplifies customs procedures and reduces delays.
* Data analysis: HS codes enable the collection of reliable trade statistics for economic analysis and policymaking.
Maintenance:
* World Customs Organization (WCO): The WCO manages and updates the HS system every five years to keep pace with evolving trade patterns and technologies.
In summary, HS codes are a crucial tool for international trade, enabling efficient customs procedures, data analysis, and global communication regarding traded goods.