In customs formalities, using the correct commodity code is essential. This code determines the amount of customs duty due, whether a tariff preference (reduced rate) applies and which formalities are required. For instance, an im- or export authorisation might be required or worse the goods are banned due to sanctions. However, determining the correct commodity code, is not always a simple task.
When classifying parts of a machine, device or apparatus (hereafter referred to as “machine”), incorrect choices are often made. The argument for this often goes: “But that’s what it is actually used for.” While this may sound logical, such an approach to classification is not justified.
If you are classifying parts of a machine, you will encounter a substantial set of rules to follow. These are primarily ‘notes’ (rules that clarify the interpretation of chapters, subheadings, and tariff headings, ensuring the correct classification of goods in the Combined Nomenclature). It is crucial to know what the specific part is used for. Additionally, its composition (for example: material type) can be important. It is also helpful to understand the part’s function. Once all the necessary information has been gathered, you can proceed with classification.
1. Gathering information
Parts can often, at first glance, seem classifiable under different headings. Therefore, gather as much information as possible about these parts. For example:
2. Read the notes
We also recommend carefully reading the notes that may apply. While this can be a time-consuming task, it will ultimately lead to the correct commodity code and prevents unforeseen costs. If you lose track of the details, we are happy to assist you further.
