This PowerPoint presentation introduces how China Customs administrates the HS Classification and what the solution is when your HS classification is challenged by China Customs.

1. HS Classification
in China
by Vivien Liang
Customs Compliance Manager
Beijing AnGu Customs Affairs Consulting Co., Ltd

2. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
What Is HS Classification?
• The full name of “HS” is the Harmonized Commodity Description and Coding System, also known
as the Harmonized System (HS) of Tariff Nomenclature, is an internationally standardized system of
names and numbers to classify traded products.
• The process of assigning HS codes is known as "HS Classification". All can be classified in the HS
by using the General Rules for the Interpretation of the Harmonized System ("GRI"). HS codes can
be determined by a variety of factors including a product's composition, its form and its function.
HS Classification

3. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Harmonized System
came into effect in 1988 and has
since been developed and
maintained by the World Customs
O r g a n i z a t i o n ( W C O ) , a n
independent intergovernmental
organization based in Brussels,
Belgium, with over 200 member
c o u n t r i e s . T h e r e a r e t wo
committees and one working
party of Harmonized System
under the WCO working body of
Ta r i f f a n T r a d e A f f a i r s .
Harmonized System & WCO

4. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Animal & Plant
Chemical Weapons
Duel Use Goods
Endangered Species
Food and Drug
Narcotics
Ozone Layer Depleting Substances
Radio active device
Wastes
…….
HS controls almost everything related to administration of
Import & Export activities…
Why Is a Correct HS Classification Code Critical
Risk
Assessment
&
Compliance
Anti-dumping
&
Countervailing
Duties
Customs
Tariffs
Trade
Statistics
Controlled
Goods
Rules of
Origin
Quota
Risk
Assessment &
Compliance
Anti-dumping &
Countervailing
Duties

5. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Affect
Accuracy Of
Customs
Statistics
State Tax
Collection
State Export
Tax Refund
Administration
State Foreign
Exchange
State License
Certificate
Administration
Customs
Supervision
Order
China Customs pays strict attention to
HS declarations as it affect ….
A Correct HS Classification Is Even
More Critical in China

6. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Long Term Shipment hold
Production Stagnation
Shipment Return(s)
Penalties or Even Sentence(s)
Delayed Declaration Fee & Container Detention Charge
A Wrong HS Classification Cause
Endless Vexation
Incorrect Duty and Tax Payment(s) and Rebate(s)
Enterprises Credit Rating Downgrading

7. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Punishment Caused By Wrong HS
Classifications

8. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Punishment Caused By a Wrong
HS Classification (Cont’d)

9. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Question 1
If I declare to Customs an incorrect tariff code, but the
tariff rate of the incorrect one is the same as that of
the correct one, will I still be penalized by Customs?
The answer is YES.
According to Decree No. 420 of the State Council, a warning
or a fine of CNY 1,000 yuan up to CNY 10,000 yuan shall be
incurred if it affects the accuracy of the Customs statistics
according to the Enforcement Regulations for Customs
Administrative Punishment.

10. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Lots of people find an HS code by typing the name of the commodity in the
search box on the Customs website, which is definitely wrong
as the commodities under the same name can be totally different and the
tariff rate gap can be huge!
How to Find a Correct HS
Code for the Commodity

11. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
According to the Provision of Customs of the People’s Republic of China on
the Administration of the Commodity Classification of Import and Export
Goods (Decree No.158 of GAC), to get a correct HS code for the commodity,
you will need all the following tools:
How to Find a Correct HS
Code for the Commodity

12. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Article 2
The term “commodity classification” as mentioned in these Provisions refers to
the activities of determining the HS codes of import and export goods under the
international convention on the harmonized commodity description and coding
system, on the basis of the Customs Import and Export Tariff of The People’s
Republic of China and in light of the Explanatory Notes to Commodities and their
Headings in Import and Export Tariff, the Explanatory Notes to the National
Import and Export Tariff of People’s Republic of China, the Administrative
Rulings and the Decisions on Commodity Classification as announced by the
General Administration of Customs.
Provision of Customs of the People’s Republic of China on the Administration
of the Commodity Classification of Import and Export Goods
(Decree No.158 of GAC)
Administration of the
Commodity Classification

13. * Any unauthorized copy, disclosure or distribution of the information is prohibited.

14. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Ensure Smooth
Supply Chain
Maintain Normal
Operation
Minimize Risk of
Customs Issues
Minimize Capital
Loss
Importance of Correct HS Code
Declarations for an Enterprise

15. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
You could submit pre-classification application in following ways,
Description of the documents Issued by
Application must be submitted
no later than
Administrative Rulings of the Commodities
Classification
General Administration of
Customs
3 months prior to Customs declaration
Pre-ruling of the Commodities Classification Local Customs Offices 3 months prior to Customs declaration
When You Need the Help for HS
Code Classifications…
Or you can reach to us for help
HS Pre-classification Proposals of the Import &
Export Commodities
Certified HS Pre-classification
Agency
5 days prior to Customs declaration

16. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
The HS Pre-classification Proposals is issued by the China
Customs Broker Association certified agent to determine the HS
code for the import or export commodities, which is an important
reference to the Customs.
What Are HS Pre-classification Proposals?
 Strict examine and evaluation by China Customs Broker
Associations.
 Random Spot check by Customs Officer.
To be a certified HS Pre-classification agent,
a corporation must pass

17. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
• Each HS Pre-classification Proposals has a serial
number which will be submitted to Customs when it is
typed in the field of Accompanying Documents in the
electronic declaration system.
• The HS Pre-classification Proposals are valid for 1 year.
• Sample of HS Pre-classification
Proposals issued by our corporate
• Qualification Certificate of our
corporate
What Are HS Pre-classification Proposals?
(Cont’d)

18. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
You can reach to us for HS Pre-classification Proposals,
 Before you sign the trade contract.
 Before you declare the commodities to Customs.
 When the HS code classification of your commodities
is challenged by Customs.
When Can You Reach Us for HS Pre-
classification Proposals ?

19. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
About Us
We became the first China Customs Broker Association certified HS
Pre-classification Corporation in 2012. We have handled and resolved a large
amount and wide range of commodities HS pre-classification and accumulated
valuable experience during the last 17 years.
Our team has a number of licensed HS pre-classification staffs with
professional knowledge of commodity classification to handle the HS Pre-
classification for your commodities.
We have branch offices in Beijing, Chengdu, Dongguan and Xiamen
and are able to reach you right away for business negotiation.

20. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
 Your commodities are handled by licensed HS pre-classification
experts.
 Remote support or on-site coordinator will be provided when the
HS classification is challenged by Customs.
 When the HS Pre-classification Proposals expire, you only need to
pay 50% of original price for a new one.
 New HS Pre-classification Proposals will be issued for free when
the Harmonized System is adjusted.
We Promise

21. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Service Type Service Description Charge
Standard HS Pre-classification
Issue HS Pre-classification Proposals for the
standard product.
1,200 CNY + per
commodity
HS Pre-classification for Large
Complete Set Equipment
Issue HS Pre-classification Proposals for each
component of the equipment.
3,500 CNY + per
equipment
HS Classification Audit
Carry out HS Classification audit on the
commodities imported/exported in the past 3
years on the basis of Auditing Regulations of
Customs of People’s republic of China.
50 CNY + per item per
declaration
HS Classification Database Set-up
Carry out Commodity HS classification database
set-up for the enterprises which has large
amount of import or export business with wide
range of commodities.
50 CNY + per commodity
Our Service

22. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
Description Charge
HS Classification Solution Design
Provide products design and modification
solution to reduce the import tariff and increase
export rebate with compliance to national law
5,000 CNY + per
commodity
Customs Coordination
Communicate with Customs officer on-site for
the HS classification on behalf of the declarant
when the HS code declaration is challenged by
Customs.
2,000 CNY + per
commodity
HS Classification Training
Provide training to improve HS classification
knowledge and skill of employees to minimize
the risks of Customs affairs
5,000 CNY + per days
(exclusive of
Transportation &
Accommodation)
Our Service

23. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
An export company exported a kind of shutter
slats and classified this product to tariff code
4418.9900.90 (export rebate 5%). However,
Customs requested them to correct the HS
code classification to a tariff code under
heading 44.08 (export rebate 0%).
Successful Case 1
Case 1

24. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
After studying the product, we determined the HS
code to 4421.9990.90 (export rebate 9%) and
issued HS Pre-classification Proposals. Customs
eventually accepted our HS code classification
after reviewing the Proposals issued by us.
Solution
Solution Provided by US

25. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
A trading company imported a detecting robot
and classified this product to the HS code
8479.5010.00 (Import tariff rate 0%). However, the
HS classification was challenged by Customs.
Case 2
Successful Case 2

26. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
After studying the product, we confirmed it shall be
classified in subheading 8525.8011.90 (6.5% of Import tariff
rate). Meanwhile, to help this company save the cost, we
provided technical modification solution by which it does not
affect the product function and the product can be easily
modified to be classifiable in subheading 8525.8031.00
(Import tariff rate 0%) . Then the trading company requested
its manufacturer to make the modification as our solution and
eventually the modified product was Customs cleared
smoothly with the HS classification as we suggested.
Solution
Solution Provided by US

27. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
An export food company have been classifying a supplementary
comprising 80% pine nut meal and 20% almond meal to HS code
1901.9000.00 (15% of export rebate rate) for many years. However, it
was found by Customs that the HS code they classified was incorrect
and Customs requested them to declare HS code 1106.3000.00 (0% of
export rebate rate) for this product. if so, not only will they not be able
to obtain the export rebate anymore but also has to pay back the
export rebate obtained in the past three years which is a huge amount
and thus they would be on the brink of bankrupt.
Case 3
Successful Case 3

28. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
We suggested them to add a small quantity of a
kind of ingredient which dose not impact neither
the nutritional effect nor taste of this product. In
this way, the HS classification of this product will
not need to be changed and this company would
be able to obtain the export rebate of 15% as
before.
Solution
Solution Provided by Us

29. * Any unauthorized copy, disclosure or distribution of the information is prohibited.
HS Classification
AEO Mentoring & Guidance
Customs Risk Management
Customs Clearance Solution
Besides HS Pre-Classification,
Our Services Also Include….

30. Email: vivien.liang@yuguilei.com
HP: +86 150 0323 1740
For more information about the HS Classification,
please contact Vivien Liang:

31. Thanks for
Watching!