By: David Johnson
Our #1 Goal
Sometimes I like to remind myself what my real job is: helping the trade community. Our #1 goal is to provide accurate and timely trade data and we want the burden to be minimal. One of the ways we do this is by allowing for the use of Harmonize Tariff Schedule numbers (HTS) in place of Schedule B numbers when exporting. Well, almost all of the HTS numbers can be used for exporting.
The “Special” Exceptions
The clearest incompatibility between the Harmonized Tariff Schedule and the Schedule B is in chapter 98: Special Classification Provisions, NESOI. On the export side, there are only 8 codes in this chapter; most of these have to do with articles being exported for donation (for more on these see Omari’s post from January 22, 2010), the code for repairs made on imported items, and a few other special classifications. The import side is a completely different story. HTS heading 9801 has more than 5 times as many codes as in the entire Schedule B chapter 98. The majority of the classifications that you will find in chapter 98 of the HTS are going to have to do with commodities that were previously exported, commodities that fall under special trade agreements, and other commodities that may receive special treatment for whatever reason. These two chapters are not interchangeable since the special classifications that we are concerned with for imports versus exports are completely different.
The “Normal” Exceptions
Outside of chapter 98, there are 182 Harmonized Tariff Schedule codes that are not valid for use in the Automated Export System and will produce errors (The list can be found here). One of the first things that jumps out to me when I look at this list is that more than 40% of the codes fall under the heading 2401- unmanufactured tobacco. One of the characteristics that you will notice if you compare the two schedules is that the HTS has a much finer breakdown at the 8 digit level than the Schedule B requires. For instance, under the refuse subheading, the Schedule B only distinguishes between which part of the leaf is being exported: stems or another part. When importing, the HTS goes into the type of leaf, the origin of the tobacco and the intended use of the refuse before ever distinguishing which part of the leaf is being imported.
This pattern of wanting to know different details when importing versus exporting is the main feature that distinguishes the codes found on the invalid list from other HTS codes. Another example is making the distinction between civil and military use jet engines when exporting but not importing under heading 8411.
The Good News
If you do find that you are filing your export shipment using an HTS code that is coming up as invalid, you can use the first 6 digits as a reference to locate the correct Schedule B using our validation service at http://www.census.gov/foreign-trade/schedules/b/#search, unless you are using a chapter 98 classification.