Customs agencies urged to reduce HS code complexity

A speaker at WCO IT Summit in Freeport said the use of tools to help importers and exporters more easily determine HS classification is crucial to designing useful single window platforms.    When is a toothbrush not a toothbrush?
   When it is an electric toothbrush, according to the Harmonized System of cargo classification. Those are considered a type of domestic appliance, and must be classified as such for import purposes under the HS.
   That’s a difficult nuance for most importers to understand, and leads to frequent misclassification, Rand Rotchin, founder, president, and chief executive officer of the technology provider 3CE told delegates at the World Customs Organization’s IT Summit in Freeport, Bahamas Thursday.
   Rotchin said misclassification issues arise primarily because HS codes are so specific and voluminous that only practitioners steeped in HS code expertise would be able to regularly classify items correctly.
   3CE provides a tool that is designed to be embedded in single window platforms that governments are building around the world to better share data among agencies that touch trade.
   “We don’t build single window platforms,” he said. “We enable them. HS assistance must be an essential component of single window design. The single window has to be designed from the point of view of the trader.”
   Aside from the toothbrush, Rotchin showed other examples where a simple unassisted search of HS codes might yield too many results – shrouding the correct code in a fog of incorrect or irrelevant ones – or where a search for a seemingly specific product yields no results at all.
   “Paper shredder,” for instance, yields no results in most HS search engines, said Rotchin.
   “Most keyword engine searches for HS codes are huge, irrelevant, and require a tremendous amount of HS knowledge to use. Often the trader gets stranded,” he added.
   The problems are particularly pronounced for smaller importers and exporters, who have less experience with HS codes and are less likely to have the resources to refine their searches.
   Rotchin’s implication is that customs data initiatives must include measures to decrease HS complexity, since most initiatives are reliant on HS codes as the tie that binds a specific product type across agencies.