The basic rules of product classification and their main role

The basic rules of product classification and their main role

The Unified Commodity Nomenclature of Foreign Economic Activity of the Eurasian Economic Union (HS) is a system of description and coding of goods, which is used for the classification of goods in order to apply measures of customs tariff regulation, export customs duties, prohibitions and restrictions, measures to protect the internal market, customs statistics.

HS may be used for the purposes of taxation of goods and for other purposes provided for by the customs legislation of the Eurasian Economic Union and (or) the Republic of Kazakhstan, as well as other legislation of the Republic of Kazakhstan.

The international basis of the HS is the Harmonized System of Description and Coding of Goods of the World Customs Organization and the Unified Commodity Nomenclature of Foreign Economic Activity of the Commonwealth of Independent States.

The HS Code is approved by the Eurasian Economic Commission. The management of the HS is carried out by the Commission.

In accordance with the Code of the Republic of Kazakhstan "On Customs Regulation in the Republic of Kazakhstan", when declaring goods, they are subject to classification according to HS, i.e. classification to one of the ten-digit numeric codes listed in the nomenclature, which is indicated by the declarant in column 33 DT.

In accordance with Article 40 of the Code, the classification of goods is understood as the gradual assignment of the goods in question to specific commodity items, sub-items and sub-items according to HS.

The classification of goods is carried out based on the main criteria:

1) the function that the product performs;

2) the material from which the product is made.

At the same time, the principle of unambiguous attribution of goods, taking into account the degree of their processing, to commodity subsubpositions is observed on the basis of the application of the Basic Rules of Interpretation (OPI) of the HS and notes to sections, groups (including notes to commodity items, subpositions), as well as additional notes that clarify specific classification issues.

The declarant and other persons classify goods in accordance with the HS Code during customs declaration and in other cases when, in accordance with the customs legislation of the Eurasian Economic Union and (or) the Republic of Kazakhstan, the customs authority declares the product code in accordance with the HS code.

That is, the classification of goods in accordance with the HS is carried out by the declarant and other persons independently.

At the same time, the verification of the correctness of the classification of goods is carried out by the customs authority within the framework of customs control after the release of goods, carried out in accordance with the procedure established by Chapters 47 and 48 of the Code.

When classifying goods, customs authorities, declarants or other persons use:

1) OPI HS;

2) notes to sections, groups, positions.

For the purposes of uniform application of HS customs authorities, declarants or other persons may use:

1) explanations to the HS;

2) Compendium of classification opinions of the WTO Harmonized System Committee;

3) electronic database of preliminary decisions on the classification of goods of the authorized body;

4) clarifications on the classification of certain types of goods by the Commission and the authorized body.

In the HS, the object of classification is all goods traded in international trade.

The classification of goods in accordance with the unified HS is one of the most pressing issues for participants in foreign economic activity.

First, to what classification HS code of the EAEU will be assigned a product depends on the rate of import/export duties, and accordingly, the size of paid customs payments, the application to goods and means of transport of non-tariff measures, prohibitions and restrictions.

Second, the assignment of goods to a particular classification HS code of the EAEU often requires special technical knowledge and conducting additional examinations related to the definition of the technical specifications of the goods, means of production, etc.

Thirdly, the accuracy of the classification of goods is also of great importance for improving the objectivity of customs statistics of foreign trade used in the development of customs policy of the EAEU member states and taking concrete measures to implement it in the process of customs clearance and control of goods and vehicles.

The principle and criteria of classification of goods

When classifying goods in accordance with the EAEU HS, six rules for the classification of goods are applied - these are the Basic Rules for the interpretation of HS, which are defined by the provisions of the Convention, are applied consistently, which follows from their texts, it is impossible and unacceptable to expand them.

The Regulation on the procedure for applying the Unified Customs Code of the EAEU in the classification of goods, approved by the Commission's Decision No. 522 of 28.01.2011, determines that the OPIS are designed to ensure unambiguous attribution of a particular product to a certain classification grouping encoded at a certain level.

OPI is a kind of algorithmization of actions in the classification of goods.

The first five OPIS provide for the inclusion of a specific product in a certain commodity item (OPI 1-5), then with the help of the sixth rule (OPI 6) inclusion in the corresponding subposition, subposition. The sixth rule expands the scope of the first five rules, subject to certain conditions.

Before referring to OPI 2, 3, 4, 5 and 6 HS, it is necessary to study the notes to certain sections and groups (OPI 1 HS).

If it was not possible to determine the commodity position with the help of OPI 1 HS, then it is necessary to remember the following:

- OPI 2 and 5 HS can be used only after the application of OPI 1 HS;

- for heterogeneous goods, OPI 2b, 3a, 3b, 3b HS are applied sequentially;

- OPI 4 TN FEA is applied only after it is impossible to use OPI 1-3 TN FEA;

- OPI 2b, 5a, 5b HS can be applied in any order, and even with each other at the same time (for example, a disassembled children's bicycle in a cardboard box should be classified according to rules 2b and 5b).

Failure to comply with the above algorithm may lead foreign trade participants to make mistakes when declaring imported and exported goods.