Many trade compliance departments are faced with the decision to assign both a Schedule B Number and a Harmonized Tariff Schedule (HTS) code to their products, or just to assign the HTS code only. Since many companies are importing and exporting today, international corporations must fulfill the requirements for both import and export clearances. U.S. Customs requires a U.S. HTS code be assigned to each product on the import entry paperwork. Meanwhile, the Census Bureau allows the Schedule B or HTS code to be used on the export declarations.
So, what should your company use? HTS or Schedule B?
Like everything else with trade regulations, there are some exceptions to using the HTS code on export declarations. In most cases, the reason is due to HTS codes used for duty reduction which are located in Chapters 98 and 99 of the U.S. HTS (e.g. U.S. Goods Returned, U.S. Armed Forces goods, etc.). Others are more of a surprise. (For example: frozen chicken legs, fruits and vegetables.) HTS Codes that cannot be used for export declarations are identified in the U.S. Customs regulations under the “Notice to Exporters” section of the U.S. HTS.
If your commodity’s HTS code can be used for exports, then why not use the HTS code? It can be a time-consuming task to assign an additional code to each product, especially since HTS and Schedule B are not always the same number. Customs and Census use the numbers to track the imports and exports of certain goods to and from the U.S. While they may care about cherry tomatoes shipped to the U.S. from Chile during a certain time of year to protect U.S. Farmers, they only track that tomatoes (all varieties) sent from the U.S. under one code.
Furthermore, any updates to the regulations will require the company to update their databases with the changed numbers. It’s obviously easier to update one code versus two.
So, you may be asking: What should I do? It’s important to consider your company’s line of business. A defense contractor manufacturing products in the U.S. may only use the 98 chapter to return goods for repair, and they may be required to assign a Schedule B for exports. The bottom line is that each company needs to look at their products, customers, operations and business plan to see what works best for the company.
Export Solutions’ trade compliance training services can help you with this evaluation and the correct assignment of codes. Schedule a free consultation today, and let us work with you to create the best approach.
Marci Gentry is Sr. Consultant for Export Solutions -- the trade compliance specialists. Follow Marci on Google+.