ICAEW.com works better with JavaScript enabled.
Brexit planning: Classify your goods using commodity codes

Brexit planning: Classify your goods using commodity codes

How to prepare for customs following the end of the transition period.

Find out what customs issues you should be aware of and how to prepare for the end of the transition period on 31 December 2020.
For more resources

There are various issues you need to consider regarding customs. This page is about the second consideration – which category a product falls into.

The rate of customs duty (tariffs) applied to imports depends on four things:

  1. the customs value of the goods;
  2. the category the goods fall into;
  3. the country they are being imported into; and,
  4. where the goods "originate".

This page is about the second consideration – which category a product falls into.

Each category has a "commodity code" or "tariff code". There are around 5,000 different commodity groups and it is the responsibility of the trader to ensure they’ve selected the appropriate one. If customs believe goods have been "misdeclared" in an appropriate category, goods can be delayed and ultimately a different tariff rate might be applied with possibly penalties imposed too.

It is important to note that there is not simply a single tariff rate for each commodity group. A range of different tariffs can apply depending on where the goods originate. Not only can specific tariff rates apply to a country, in some cases they even apply to an individual exporter.

You can look up the rates online.

 

Preferential tariffs

Where a free trade agreement is in place, that can reduce or eliminate tariffs. In this case a "preferential" tariff rate would apply to imports from that country. Some trade agreements make tariff concessions only for a pre-determined volume of goods. Once that volume is exceeded, a higher rate applies. These tariff concessions are called "preferential tariff quotas".

Anti-dumping duty

Equally, countries can take defensive measures against products they believe are being subsidised in another country. These include "anti-dumping duty" (ADD). ADD means a higher tariff rate applies to imports from a particular country or group of countries. Sometimes, specific exporters are subjected to or excluded from the ADD. The important point here is that customs authorities may challenge either the commodity group or the origin, or indeed both. The rate of tariff is linked to both.
 

Commodity codes

The codes are standardised internationally in a "harmonised system" of names and numbers that classify traded products. These are maintained by the World Customs Organisation.

Example – 87 12 00 30 90 (Bicycles with ball bearings)

The code is made up as follows:

Section XVII: Vehicles, aircraft, vessels and associated transport equipment  
 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof  87
 Bicycles and other cycles (including delivery tricycles), not motorised  87 12
 Bicycles with ball bearings  87 12 00 30
 Consigned from Indonesia, Malaysia, Sri Lanka or Tunisia  87 12 00 30 10
 Consigned from Cambodia, Pakistan or the Philippines  87 12 00 30 20
 Other 87 12 00 30 90 

Bicycles with ball bearings have an EU "most favoured nation" tariff of 14%. This tariff applies to all imports from outside the EU, unless a preferential tariff applies or anti-dumping duties are in place.

The EU tariff rate for "bicycles with ball bearings" (87 12 00 30 90) can be looked up on the UK Trade Tariff

As at 24 September 2020 it listed:

Most favoured nation tariff rate – 14.0%

There is a long list of countries with a preferential tariff of 0%, although in some cases a preferential tariff applies at a higher rate:

Preferential tariff – India & Vietnam –10.5%

Preferential tariff – Singapore – 11.6%                                   

Preferential tariff – Ukraine –  5.2%                                           

Anti-dumping duty applies to imports from China at a rate of 48.5%, and this is extended to include consignments from Indonesia, Malaysia, Sri Lanka, Tunisa, Cambodia, Pakistan and the Philippines.