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20.10.2015
Are Tariff/Commodity Codes that important for importers and exporters?
The correct tariff/commodity code classification is more important now than ever, as individual countries want to show support for their own international policies on goods and the benefits they offer when allowing imports of certain product groups.
For example, we are now in the "age of recycling" and with the development of new technologies, resulting in environmentally friendly products, will in most cases, benefit from reduced import duties allocated to the tariff code that these products comply with.
Countries may also apply high import duties on goods that they don’t want importing, which may be due to the fact that they want to support local manufacturers and don’t want to encourage competition.
If you ship physical products then an understanding of the classification process is essential.
- Tariff codes play a huge part of the “landed cost” of your goods as import duties are calculated based on the code you have given to your product.
- They control the rule of origin when using preferential trade documents, such as an EUR1 and the percentage of “non-originating” content of a product
- Correct classification can result in products being more competitive, quicker customs clearance and possible more cost effective routes to market.
- Some Government departments also rely on Tariff classification for licences
All you need is a simple process to ensure that you have:
- Method of classifying and reviewing your tariff codes
- People in your organization who understand the component content and functionality of the product
- Methodology to defend a product classification with any customs authority
- Identify sources of external classification guidance not only for the UK but globally
- A team approach to classifying to reduce discrepancies in your imports
It is a company procedure that can bring commercial benefits and not just the role of one person to classify all your product lines.
Organizations need to train key personnel to ensure that a systematic approach is taken to properly allocate tariff codes.
Just a thought….
Resultz Ltd provides the training to help all sizes of business understand the export documentation requirements and the commercial aspects of developing business overseas.
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