What are HTS codes and Schedule B numbers?

HTS codes and Schedule B numbers are derived from the Harmonized Commodity Description and Coding System, otherwise known as the Harmonized System (HS). The Harmonized System is a standardized classification system administered by the World Customs Organization (WCO) and used by Customs authorities around the world for identifying products in foreign trade.

The HS uses a common set of categories for globally traded goods. These categories can be subdivided in the tariff schedules of WCO member countries for detailed duty or statistical purposes. (“Duty” is often used interchangeably with the word “tariff.”) HS Codes are six-digit codes used across all WCO member countries. Individual member countries use additional digits to further distinguish product categories. HTS codes and Schedule B numbers build off of the common framework of the HS.

HTS stands for Harmonized Tariff Schedule. The HTS is another classification system used in the U.S. to identify imported goods based on their material composition, product name, and/or intended function. An HTS code is a 10-digit code used to determine the rate of duty applied to an imported good. The first six digits of an HTS code are the same as its corresponding HS code, whereas the last four digits of the HTS code allow for more precise identification.

Schedule B numbers are used by the USG to track statistics of exported goods. Schedule B numbers are also 10-digit codes. The first six digits of a Schedule B number are the same as its corresponding HS and HTS codes, whereas the last four digits allow for more precise identification. These last four digits can be the same for HTS codes and Schedule B numbers, but they may be different depending on the product. More on this below.

How are HTS codes and Schedule B numbers different?

The fundamental difference is that HTS codes are used for imports and Schedule B numbers are used for exports. More specifically, HTS codes are used to determine duty rates for imported goods, while Schedule B numbers are used to keep track of statistics surrounding U.S. exports. HTS codes can sometimes be used in place of Schedule B numbers for export classifications. For products whose Schedule B numbers are listed in the HTS “Notice to Exporters,” however, the appropriate Schedule B number must be used. On the other hand, Schedule B numbers cannot be used in place of HTS codes for import classifications. The proper HTS code is required in order to determine the appropriate duty rate.

Which entities administer HTS codes and Schedule B numbers?

HTS codes are administered by the U.S. International Trade Commission (USITC). The comprehensive classification list
is available on the USITC website at http://www.usitc.gov/tata/hts/bychapter/index.htm.

Schedule B numbers are published by the U.S. Census Bureau, Foreign Trade Division. An enhanced search tool for Schedule B numbers is available on the Foreign Trade Division’s website at http://www.census.gov/foreign-trade/schedules/b/index.html.

When do I need to use HTS codes and Schedule B numbers?

Accurate HTS codes should be included on shipping documents for every import so that U.S. Customs and Border Protection (CBP) can efficiently assess the appropriate duty rate. Otherwise, CBP may dispute the classification which could cause delays in clearing a shipment.

Schedule B numbers (and other important export information) must be filed with CBP when the value of the commodity under each individual Schedule B number is over $2,500 or if a validated export license is required to export the commodity. The failure to do so could result in civil fines and penalties.

Where do I enter HTS codes and Schedule B numbers?

HTS codes should be included on shipping documents for every import. Schedule B numbers are reported as part of the Electronic Export Information (EEI) in the Automatic Export System (AES). Schedule B numbers need to be filed with EEI when the value of the commodity classified under each individual Schedule B number is over $2,500 or if a validated export license is required to export the commodity. EEI is filed with CBP through AES.

Why are HTS codes and Schedule B numbers necessary?

It’s critical to use the correct HTS codes because the rate of duty applied to imported goods is assessed based on this classification. The failure to use the proper HTS code could lead to costly delays in getting your import shipment cleared through Customs. Schedule B numbers are used for statistical purposes to monitor exports. This is important because it allows the USG to provide U.S. businesses with valuable data regarding globally traded goods. Finally, the failure to properly use HTS codes and Schedule B numbers could potentially lead to fines and other penalties.

b Several CTP staff members worked as legal and licensing experts at the Department of Commerce where they played integral roles in the development of the existing Commerce Control List (CCL) and Export Administration Regulations (EAR).

b Our experts have since maintained memberships in various Technical Advisory Committees (TACs) and industry expert groups, contributing to the evolution of the export control reform, particularly in recent years.

b Our experts also have extensive international experience, having delivered export control training worldwide on behalf of the U.S. government. In the process, CTP has worked in 88 countries and developed relationships with over 350 trade and border experts around the world, enabling us to tailor our compliance solutions to local languages and laws.

About CTP Compliance

For over twenty years, the engineers and regulatory experts at CTP have guided our customers past compliance headaches and hazards, enabling them to find or design solutions that are efficient and cost-effective. For details, contact Rick Phipps at 703-683-5806 or rphipps@ctp-inc.com.

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