Tariff Classification General Rules of Interpretation (GIR)

General Rules

There are six General Rules used in interpreting (applying) the Tariff. These are known as
the General Rules of Interpretation (GIR) 1 through 6.

Rules one to four are related and must be applied in sequence. Rules five and six stand
on their own to be applied as needed.

Rule 1

The titles of Sections, Chapters and sub-Chapters are provided for ease of reference
only; for legal purposes, classification shall be determined according to the terms of the
headings and any relative Section or Chapter Notes and, provided such headings or
Notes do not otherwise require, according to the following provisions [that is, GIRs 2 to
6]:

Explanation: This is the first Rule to be considered in classifying any product. Most
products are classified according to this rule.

For practical purposes, we can break this rule down into 2 parts:

1) The words in the Section and Chapter titles are to be used as guidelines ONLY to
point the way to the area of the Tariff in which the product to be classified is likely to be
found. Articles may be included in or excluded from a Section or Chapter even though
the titles might lead one to believe otherwise.

2) Classification is determined by the words (terms) in the Headings (the first four
numbers) and the Section and Chapter Notes that apply to them unless the terms of the
heading and the notes say otherwise. In other words, if the goods to be classified are
covered by the words in a heading and the Section and Chapter Notes do not exclude
classification in that heading, the heading applies.

So find a Heading that is worded in such a way as to include the product in question.
And carefully check the Section and Chapter notes to see if the product is mentioned
specifically as being included or excluded.

Many goods should be correctly classifiable by reference to Rule 1 alone. If the results
of this process are ambiguous and two or more Headings appear to be applicable, then
Rule 3 should be applied. When you read Rule 2 you will see why it would not be next
Rule in such cases.

Simple Example: If you were importing Christmas tree candles, it would seem logical to
classify them with Classification Number 9505.10.00.90: Other, articles for Christmas
festivities. However, when reading the Notes to Chapter 95, it clearly states this Chapter

Page | 1
does not cover Christmas tree candles. In fact, we must classify them with the
Classification Number 3406.00.00.00: Candles, tapers and the like.

Rule 2: (a) Any reference in a heading to an article shall be taken to include a reference
to that article incomplete or unfinished, provided that, as presented, the incomplete or
unfinished article has the essential character of the complete or finished article. It shall
also be taken to include a reference to that article complete or finished (or failing to be
classified as complete or finished by virtue of this Rule), presented unassembled or
disassembled.

(b) Any reference in a heading to a material or substance shall be taken to include a

reference to mixtures or combinations of that material or substance with other
materials or substances. Any reference to goods of a given material or substance shall
be taken to include a reference to goods consisting wholly or partly of such material or
substance. The classification of goods consisting of more than one material or
substance shall be according to the principles of Rule 3.

Explanation: Rule 2 (a) deals with the classification of unfinished, incomplete,

unassembled or disassembled goods. Unfinished and incomplete goods can be
classified under the same Heading as the same goods in a finished state provided that
they have the essential character of the complete or finished article. As well,
unassembled or disassembled goods may also be classified the same as the complete
finished product. This rule does not apply if the text of the Heading or the relevant Legal
Notes exclude the unfinished or unassembled product in question.

Example: An automobile missing only its wheels would be classified the same as if it
were complete.

Explanation: Rule 2 (b) lays the groundwork for dealing with products, not classifiable
through the use of Rule 1 or Rule 2 (a), which are composed of a mixture of materials or
substances. It basically states that a Heading referring to a given material or substance
includes mixtures of that substance with others. Similarly, a reference to a product
composed of a given material or substance includes products composed either wholly
or partly of the material or substance. This means that a mixed product may seem to be
eligible for classification under two or more Headings. However, a given product can
legally only be classified under one Heading. Rule 3 must be used to decide between
alternate Headings.

Example: If you were importing dicalcium citrate, the Tariff does not specifically state
this compound. However, it is a compound containing more than one material and its
essential character is that of a salt of citric acid. Therefore, dicalcium citrate qualifies as
Classification Number 2918.15.90.19: Salts and esters of citric acid, Other.

Page | 2
Rule 3: When by application of Rule 2 (b) or for any other reason, goods are, prima facie,
classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to
headings providing a more general description. However, when two or more headings
each refer to part only of the materials or substances contained in mixed or composite
goods or to part only of the items in a set put up for retail sale, those headings are to be
regarded as equally specific in relation to those goods, even if one of them gives a more
complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up of different

components, and goods put up in sets for retail sale, which cannot be classified by
reference to 3(a), shall be classified as if they consisted of the material or component
which gives them their essential character, insofar as this criterion is applicable.

(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified
under the heading which occurs last in numerical order among those which equally
merit consideration.

Explanation: Rule 3 (a) states that where 2 or more Headings seem to apply, the one
which provides the most specific description of the product in question should be used.
This means that a Heading which names the actual product should be used in
preference to one which only names a category to which the product could belong.
Similarly, a Heading that describes the whole product should be used in preference to
one which describes part of it. However, where two Headings both only describe part of
the product, this rule cannot be used to tell which one to use even if one seems more
specific or detailed than the other.

Example: Mint tea is not stated specifically, as a product, in the Tariff. Although the
product descriptions available are mint and tea, the importer must classify mint tea
under the appropriate tea Heading because it provides the most specific product
description and mint is only the flavour of the tea.

Explanation: Rule 3 (b) applies to mixtures, composite goods and sets that cannot be
classified by use of the previous Rules. These should be classified as if they consisted
of the material or component which gives them their essential character.

Example: An importer bringing in "liquor gift sets" (that include the bottle of liquor and
glasses) must classify the goods under the appropriate liquor Heading. The essential
character of the item is the liquor itself and not the glasses contained within the set.

Explanation: Rule 3 (c) is for use in cases in which a good seems to fit in more than one
Heading and the essential character cannot be determined. In this case, the product
should be classified under the Heading which occurs last in numerical order.

Page | 3
Example: A gift set which includes socks (Heading number 6115) and ties (Heading
number 6117) cannot be classified by the previous rule since neither item gives the gift
set its essential character. The gift set must be classified under the Heading number for
ties which is the Heading that occurs last in numerical order.

Rule 4: Goods which cannot be classified in accordance with the above Rules shall be
classified under the heading appropriate to the goods to which they are most akin.

Explanation: This is a "last resort" rule, most often used with new products.

Rule 5: In addition to the foregoing provisions, the following Rules shall apply in respect
of the goods referred to therein:

(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases,
necklace cases and similar containers, specially shaped or fitted to contain a specific
article or set of articles, suitable for long-term use and presented with the articles for
which they are intended, shall be classified with such articles when of a kind normally
sold therewith. This Rule does not, however, apply to containers which give the whole
its essential character;

(b) Subject to the provisions of Rule 5 (a) above, packing materials and packing
containers presented with the goods therein shall be classified with the goods if they
are of a kind normally used for packing such goods. However, this provision does not
apply when such packing materials or packing containers are clearly suitable for
repetitive use.

Explanation: Rule 5 specifies how to classify containers. Rule 5 (a) deals with
containers which:

• are shaped or fitted for the article they will contain,

• are suitable for long-term use,

• protect the article when not in use,

• are of a kind normally sold with such articles,

• are presented with the articles they are designed to contain.

Containers which have these characteristics can be classified with the products which
they contain. However, in cases where the container gives the product its essential
character, it would be the container which would have to be classified.

Example: Rule 5 (a) would apply to flute cases because flutes are normally sold with
their cases (due to their specific shape) and are intended for long term use.

Page | 4
Explanation: Rule 5 (b) deals with other types of containers and packing materials.
These should be classified with the goods they contain if they are of a kind normally
used for packing such goods and are not suitable for repetitive use.

Example: An importer bringing in goods and using styrofoam chips for padding fits well
into Rule 5 (b). Styrofoam chips are normally used for the padding and insulation of
many goods, however they are rarely reused and are therefore classified with the goods
when they enter Canada.

Rule 6: For legal purposes, the classification of goods in the subheadings of a heading
shall be determined according to the terms of those subheadings and any related
Subheading Notes and mutatis mutandis, to the above Rules, on the understanding that
only subheadings at the same level are comparable. For the purpose of this Rule the
relative Section and Chapter Notes also apply, unless the context otherwise requires.

Explanation: Once goods have been classified to the Heading level by the use of
international Rules 1 to 5, then classification to the Subheading level can now take
place by repeating international Rules 1 to 5 and taking into account any related Legal
Notes.

Additional U.S. Rules of Interpretation

1. In the absence of special language or context which otherwise requires—

(a) a tariff classification controlled by use (other than actual use) is to be determined in
accordance with the use in the United States at, or immediately prior to, the date of
importation, of goods of that class or kind to which the imported goods belong, and the
controlling use is the principal use;

(b) a tariff classification controlled by the actual use to which the imported goods are
put in the United States is satisfied only if such use is intended at the time of
importation, the goods are so used and proof thereof is furnished within 3 years after
the date the goods are entered;

(c) a provision for parts of an article covers products solely or principally used as a part
of such articles but a provision for "parts" or "parts and accessories" shall not prevail
over a specific provision for such part or accessory; and

(d) the principles of section XI regarding mixtures of two or more textile materials shall
apply to the classification of goods in any provision in which a textile material is named.

About the Harmonized Tariff System

The Harmonized Commodity Description and Coding System of Tariff Nomenclature,

generally reffered to as the Harmonized System (HS) is an international nomenclature

Page | 5
defined by the World Customs Organization (WCO) for the classification of products. It
allows participating countries to classify traded goods on a common basis for Customs
purposes. At the international level, the Harmonized System for classifying goods is a
six-digit code system.

The HS comprises approximately 5,000 article/product descriptions that appear as

headings and subheadings, arranged in 96 chapters (Chapter 77 is reserved for future
use) and grouped into 21 sections.

Of the six digits, the first two digits identify the chapter the good is classified in, e.g. 09 =
Coffee, Tea, Mate and Spices. The first four digits identify the heading, a finer breakdown
of the chapter, e.g. 09.02 = Tea, whether or not flavoured. The full six digits identify the
sub-heading, and are even more specific, e.g. 09.02.10 = Green tea (not fermented). Up
to the HS-6 digit level, all countries using the Harmonized System have the same codes.

In implementing the Harmonized System, most countries add additional digits for finer
breakdown below the sub-heading level. Some add an additional two digits, the tariff
item level, at which duty rates are assigned. Others add a further two digits, the
classification level. This final level is generally for statistical purposes, consequently,
unit(s) of measure are generally assigned here. Note that a few countries do not assign
additional levels, consequently their duty rates are applied at the sub-heading level.

The Importance of Tariff Classification

For Government

For government, a tariff classification system enables "uniform identification of

imported and exported goods for purposes of duty and tax collection, enforcement of
national laws and international treaties, analysis for economic and business planning,
and international trade negotiations."

For Companies

For users of the tariff (importers and exporters of all types and sizes), correct
classification is a legal responsibility. Non-compliance can mean shipment delays,
increased inspections, fines, and other administrative penalties.

Correct classification often saves money, both in the short and long term. When
examining a company's past imports, customs consultants find that overall, too much
duty has been paid, indicating that full advantage of provisions of the tariff were not
taken. Making use of these provisions requires a precise knowledge of the product to be
classified, something that the importer or exporter has, as well as knowledge of the
Tariff and the principles of classification, something readily know-able.

Whether goods are eligible for any of the special provisions of the Tariff that allow for
lower duty rates usually depends on the use or purpose for which they are being

Page | 6
imported, or on the availability of certificates of origin. Again, the importer is in the best
position to know these facts.

Verifying the classification decisions of customs brokers and professional classification

suppliers is a good way of protecting both compliance records and revenue outlay in the
form of duties and taxes. By understanding how the tariff classification process works,
importers will be able to work together with their classification provider (usually a
customs broker or consultant) to ensure that their goods are classified correctly.

An international "Harmonized System" for the description and classification of goods

was created in 1988, and soon after adopted by nations around the world. The broad,
core specifics and structure of Harmonized System classifications is universal, with
each participating country eligible to add and define specific detail items, and to create
and assign rates of duty in any required categories for all classifications.

The Harmonized System — A Brief History

The Early Years

As early as a century ago, the lack of uniformity between the many different
classification systems that had grown up throughout the world had become a major
concern. Since that time, several attempts have been made to create an international
system of classification.

In 1950, the Customs Cooperation Council was formed in Brussels. Shortly thereafter,
the classification system it developed, known as the Customs Cooperation Council
Nomenclature, came into use. By 1970, it became apparent that this system would have
to be revised both in order to make it usable by more countries and to ensure
compatibility with modern, computerized methods of doing business. Thus the
development of the Harmonized Commodity Description and Coding System began.

On January 1, 1988 most members of the WTO adopted the new Harmonized System. In
the United States, the HTSUS (Harmonized Tariff Schedule of the United States) was
enacted by subtitle B of title I of the Omnibus Trade and Competitiveness Act of 1988,
and became effective on January 1, 1989 - replacing the TSUS (Tariff Schedules of the
United States).

There are now more than 200 countries using the international Harmonized Tariff. So are
they all the same? Yes, and No. Yes to the 6 digit level. No beyond that level. Before
being adopted into law by a country, the WTO Harmonized System is augmented to
accommodate particular national goals. For example, most add additional levels to
provide a finer breakout of products. Duty rates and units of measurement are added —
generally at the 8th digit level, but often enough at the 10th digit level.

Recent Changes

Page | 7
The Harmonized System has undergone several changes, called revisions. The following
is the count of affected six-digit levels (sub-headings), by revision:

Revision Number of Number of Number of Number of

Year unchanged codes new codes reused codes deleted codes

1988 0 5020 0 0

1996 4421 348 344 255

2002 4713 338 173 227

2007 4451 262 341 432

2012 4748 329 128 176

Basic Classification Methodology

This section illustrates how to classify goods.

Two methods are discussed, the Reference or Keyword method, and the Hierarchical
method.

Hierarchical (or "Drilldown") Method

This method of classification follows the structure of the Tariff. It is the most thorough
method, as it ensures that all exceptions, exclusions and so on are noted, and that the
logic of the hierarchy is followed.

On the downside, this method is more time consuming than the Reference or Keyword
method, and for novices, can be a little challenging. Before using the Hierarchical
method, we recommend following one or more of the practice examples.

Step by Step

1. Locate the Section in which the product is likely to be found.

2. Carefully read the Explanatory Notes that apply to the Section. If the product seems
like it could be in more than one Section, read the Explanatory Notes for each.

3. Once the pertinent Section(s) is identified, look at the Chapters in the Section(s).
Read the Chapters Notes in question, and look at the Chapter Notes within the
Explanatory Notes as well.

Page | 8
4. Look at the Headings in the Chapter(s) you have selected. Assigning the product to
the correct Heading is of crucial importance — as explained in the Rules of
Interpretation, remember that the words in the Section and Chapter titles only point you
in the direction of the correct Heading. Check the words in the Heading very carefully to
make sure it fits the product. Re-check the Section, Chapter and relevant parts of the
Explanatory Notes to confirm that the product is not excluded, or that you are not
directed to another Heading.

5. Remember that Headings are mutually exclusive. Legally, a product can only be
classified under one Heading. If you have more than one Heading under consideration,
you will need to use GIR 3 to decide between them. Refer to the General Rules of
Interpretation, any Legal Notes related to the Heading, and the Explanatory Notes.

6. Once the Heading has been selected, the item must be classified down to the
Subheading level. Subheadings are breakouts of the 4-digit Headings. Thus, they can
include only products which are included in the Heading to which they apply.
Subheadings exhaust the Heading from which they are derived. All products may be
listed, or a few categories may be named explicitly and the rest referred to as "Other". If
there are first and second level Subheadings, first find the appropriate first level
Subheading and then locate the second level one below it. Note that there are some
Subheading Notes amongst the Legal Notes and there are also some Subheading-level
Explanatory Notes.

In going below the Subheading level of classification, you will have left the international
part of the Tariff and are now dealing at the level that is unique to the country.

For most countries, including the U.S., Canada, and Mexico, it is at the Tariff Item level,
the 7th and 8th digit levels, that the duty rate is determined. Your aids in deciding about
this level are the Supplementary Notes (ie. the country-specific notes) and the country-
specific Explanatory Notes. Where there are first and second level Tariff Items, first find
the appropriate first level Tariff Item, then, below that find the correct second level Tariff
Item.

Where a country has added another level, such as the U.S. and Canada, the next step is
to look at the 9th and 10th characters if they are non-zero. The logic at this level is the
same as at the other levels. It is advisable to check any applicable Notes. Also, there
may be first and second level Classification Numbers.

The lowest level Classification Number is the number that is generally used on most
country's import documentation. In the case of the U.S. and Canada this is 10 digits, for
Mexico it is 8 digits. The duty rates for the most commonly used Tariff Treatments are
found associated with the Tariff Item. Pick the one that applies to the country you are
importing your product from. Don't forget to ensure that your certificates are in order for
preferential treatments.

Page | 9
Example

A Canadian importer wants to import packaged low protein biscuits suitable for special
dietary needs. They will be imported from the United States and sold in health food
stores. The first step is to find the appropriate Section. Looking through the Section
descriptions, we see that Section IV: Prepared Foodstuffs; Beverages, Spirits and
Vinegar; Tobacco and Tobacco Manufactured Substitutes is most likely to be the correct
one.

Next, we look at the Legal Notes for this Section to see if there are any exclusions or
special considerations that could affect whether this product actually belongs in this
section. Nothing in the Notes would seem to rule out classifying this product in this
section.

Now we need to find the correct Chapter. Part of the Chapter list for Section IV is shown
below:

16. Preparations of meat, of fish or of crustaceans, molluscs or other aquatic

invertebrates.

17. Sugars and sugar confectionery.

18. Cocoa and cocoa preparations.

19. Preparations of cereal, flour, starch or milk; pastrycooks' products.

20. Preparations of vegetables, fruit, nuts or other parts of plants.

The most likely candidate is Chapter 19: Preparations of cereal, flour, starch or milk;
pastrycooks' products.

Nothing in the Chapter Notes seems to disqualify our placing the product in this
chapter.

We now look through the Headings in the Chapter, a partial list of which is shown below:

19.01 Malt extract; food preparations of flour, meal, starch or malt extract, not
containing cocoa powder or containing cocoa powder in a proportion by weight of less
than 50%, not elsewhere specified or included; food preparations of goods of heading
Nos. 04.01 to 04.04, not containing cocoa powder or containing cocoa powder in a
proportion by weight of less than 10%, not elsewhere specified or included.

19.02 Pasta, whether or not cooked or stuffed (with meat or other substances) or
otherwise prepared, such as spaghetti, macaroni, noodles, lasagna, gnocchi, ravioli,
cannelloni; couscous, whether or not prepared.

1903.00.00 Tapioca and substitutes therefor prepared from starch, in the form of flakes,
grains, pearls, siftings or in similar forms.

Page | 10
19.04 Prepared foods obtained by the swelling or roasting of cereals or cereal products
(for example, corn flakes); cereals, other than maize (corn), in grain form, pre-cooked or
otherwise prepared.

19.05 Bread, pastry, biscuits and other bakers' wares, whether or not containing cocoa;
communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing
wafers, rice paper and similar products.

Biscuits are specifically stated under the Heading 19.05, so it should be the correct one.
(Obviously determining this requires detailed product knowledge). Going back to the
Section and Chapter Notes, we can see that none of them apply to this Heading.

The next step is to look below the Heading level in order to find the correct Subheading,
Tariff Item and Classification Number.

Look at the following partial breakdown of this Heading:

1905.10 Crispbread
1905.20.00 Gingerbread and the like
1905.30 Sweet biscuits; waffles and wafers
1905.40 Rusks, toasted bread and similar toasted products
1905.90 Other
1905.90.11 Ordinary bread, leavened with yeast
1905.90.12 Unleavened bread for sacramental purposes
1905.90.13 Other bread, in packages of a weight not exceeding 11.34 kg each
1905.90.14 Other bread, in bulk or in packages of a weight exceeding 11.34 kg each
1905.90.21 Biscuits: valued at not less than 44¢/kg, said value to be based on the net
weight and to include the value of the usual retail package
1905.90.29 Other:
1905.90.29.10 Soda biscuits
1905.90.29.90 Other

Subheading 1905.90 refers to Other. We know that this biscuit product can only fall
under this Subheading because the Subheadings above exclude biscuits, but not
1905.90. As we go through the Classification Number levels, we see our product falls
under the first level 1905.90.29. The second level Classification Number,
1905.90.29.90, referring to Other is the one we must use on our accounting documents.

Now we can look at the duty rate information for the Tariff Item.

Top

Using Indexes or Keywords

Indexes and keyword systems can help you to zero in on the Classification Number
more quickly. While they can be a bit misleading if used incorrectly, if used properly,

Page | 11
they should be at least as accurate as the more formal hierarchical method described
above. In indexing and keyword methods you are using words or phrases found in the
product description to look up the Classification Number. Most indexes consist of an
alphabetical list of product descriptions. Beside each is the suggested 10-character
Classification Number and sometimes other information such as duty rates etc.
Computerized keyword lookups allow you to enter one or several keywords. If these
words are found in the Tariff, further screens appear to show where they are located and
display any relevant Tariff Items, Classification Numbers and duty rates.

The essential step in ensuring accurate classification when using indexes or keywords is
to properly verify the Classification Number found in the lookup. If several numbers are
suggested, you must also choose between them. Assess the suggested classification(s)
by checking the relevant Section and Chapter Notes for each looking for any exclusions
or qualifications.

Then proceed to the Heading level. Compare the Heading description to what you know
about the product. Use any Legal Notes that apply at the Heading level, and the
Explanatory Notes if you have access to them. As explained earlier, Headings are
mutually exclusive. If you have retrieved Classification Numbers that belong to more
than one Heading, rule out all but one Heading before proceeding.

Once certain that you have the correct Heading, proceed to verify the Subheading, Tariff
Item and Classification Number levels in the same way.

Example

We are trying to classify an item whose product description reads, Crude sulphur put up
in 1 kilogram packages for retail sale as a fungicide. The most obvious word
combination to try is crude sulphur. Looking up this combination, or in some
alphabetical index books, sulphur, crude retrieves the Classification Number:

2503.10.00.00 Crude or unrefined sulphur

It looks like this classification might fit. But what if we had looked up the word fungicide
instead? The closest match is the following:

3808.20 Fungicides
3808.20.10.00 In packages of a gross weight not exceeding 1.36 kg each.

Now our problem is to determine which of the two Classification Numbers is correct.
Here we rely on the Legal Notes for the Chapter and Section. There are no notes for
Section V. The only note in Chapter 25 that mentions sulphur refers to "sublimated
sulphur, precipitated sulphur or colloidal sulphur" as being excluded from this Chapter.
But these designations do not apply to our product.

However, look at the following notes for Section VI and Chapter 38 respectively:

Page | 12
Section VI - Note 2:

Subject to Note 1 above, goods classifiable in Heading No. 30.04, 30.05, 30.06, 32.12,
33.03, 33.04, 33.05, 33.06, 33.07, 35.06, 37.07, 38.08, by reason of being put up in
measured doses or for retail sale are to be classified in those headings and in no other
headings in the Nomenclature.

Chapter 38 - Note 1:

This Chapter does not cover:

(a) Separate chemically defined elements or compounds with the exception of the
following:

(1) ...

(2) Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and

plant-growth regulators, disinfectants and similar products, put up as described in
heading No. 38.08.

The note for Chapter 38 says that separate chemically defined elements or compounds
(which description may apply to our product) are not covered by this Chapter except if
used as insecticides, rodenticides, fungicides etc., put up as described in heading No.
38.08. Thus our product seems to fit into this heading. The note for Section VI confirms
this impression and in fact says that we must classify it in this Heading. Therefore
3808.20.10.00 is the correct Classification Number.

Understanding the Harmonized Tariff System (HTS)

Nomenclature is the term used to describe the systematic naming of things. The
Harmonized System (HS) is an international goods nomenclature consisting of General
Rules of Interpretation (GRI's), Section and Chapter legal notes, and the 4-digit Heading
and 6-digit Subheading numerical codes.

Each World Trade Organization (WTO) member country has agreed to utilized the
foundational international Harmonized System nomenclature, however, duty rates are
not harmonized and are established country by country or through multilateral
agreements.

The United States has augmented the international nomenclature, referring to it as the
Harmonized Tariff System of the United States (HTSUS, or HTS for short), assigning U.S.
import duty rates and making trade agreements with trading partners worldwide that
can confer preferential import rates. An additional U.S. General Rule of Interpretation
with four parts was also added, as well as national-level notes for each Section and
Chapter to specifically administer classification of commodities as ruled in the United
States. Finally, special duty provisions were added as additional chapters in the
systems (Chapter 98 and 99), along with reference material at the end of the tariff.
Page | 13
The "Harmonized System of Tariff Classification and Statistical Coding" contains a
considerable amount of information. However, because it is very systematically laid
out, it is not difficult to understand, navigate and apply.

The following provides an explanation of each major area of the Tariff, covering the type
of information, how it is structured, and how it can best be interpreted and used. There
is also a discussion of the specialized language that is used throughout the Tariff.

Harmonized Tariff Legal Notes

In the Harmonized Tariff, some of the Sections and Chapters are preceded by Notes.
These are known as Legal Notes because they have legal force as an integral part of the
Harmonized System. Section Notes, Chapter Notes and Subheading Notes are included
in the international core of the Harmonized System Nomenclature. The international
Legal Notes define the precise scope and limits of each Chapter, Section, Heading or
Subheading. Specifically, they perform the following functions:

1. Define the limits of a Heading.

2. Provide lists of goods included in a particular Section, Chapter, Heading or group

of Headings.

3. Provide lists of goods excluded from a particular Section, Chapter or Heading.

4. Direct the user to the appropriate Section, Chapter or Heading for a particular
product.

5. Subheading Notes specifically define what is to be included in or excluded from

given Subheadings after classification to the Heading level has taken place.

Tariff Sections and Chapters

The primary division of goods in the Tariff is into Sections and Chapters. At the
International Level, there are 21 Sections in all, comprising 97 Chapters.

In the United States, the last section, Section 22 contains two chapters (98 and 99) that
are particular to the United States and cover special provisions and conditions. Other
countries have adopted a similar approach and include chapters 98 and 99. Note
however, that the provisions and conditions can differ substantially.

In the U.S., Chapter 98 covers such articles and types of import conditions as:

1. American goods returned (9801)

2. United States Merchandise assembled abroad (9802)

3. Temporary importations (9813)

4. Personal baggage (9804)

Page | 14
 5. Military Departments (9808)

6. Articles for Religious Institutions (9810)

7. Samples (9811)

8. Certain unwrought Metals (9817)

9. Free trade (duty preference) provisions

Chapter 99 highlights:

1. Temporary legislation affecting duty rates

2. Punitive retaliatory tariffs

3. Safeguard Measures affecting agricultural products

Top

Agricultural Products

Sections I through IV contain the majority of animal and plant products. This group of
Sections provides a good illustration of the classification logic used throughout the
Harmonized System. These Sections, taken together, deal with a broad commodity
grouping. The basic commodities themselves, in their raw or moderately processed
state are covered in the first two Sections. More processed products are dealt with in
the next two Sections. Within the Sections that contain more than one Chapter, the
Chapters are also defined according to further commodity specification and degree of
processing.

Section I: Live animals; animal products

Section I deals with the classification of living animals and their primary products. The
following Chapters are included:

1. Live animals.

2. Meat and edible meat offal.

3. Fish and crustaceans, molluscs and other aquatic invertebrates.

4. Dairy produce; birds' eggs; natural honey; edible products of animal origin, not
elsewhere specified or included.

5. Products of animal origin, not elsewhere specified or included.

Section II: Vegetable products

Section II covers vegetable products progressing from live plants to highly processed or
specialized plant products. It includes the following Chapters:

Page | 15
 6. Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental
foliage.

7. Edible vegetables and certain roots and tubers.

8. Edible fruit and nuts; peel of citrus fruit or melons.

9. Coffee, tea, mate and spices.

10. Cereals.

11. Products of the milling industry; malt; starches; inulin; wheat gluten.

12. Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial
or medicinal plants; straw and fodder.

13. Lac; gums, resins and other vegetable saps and extracts.

14. Vegetable plaiting materials; vegetable products not elsewhere specified or

included.

Section III: Animal or vegetable fats and oils and their cleavage products; prepared
edible fats; animal or vegetable waxes

In Section III is found a specialized group of animal and vegetable products, the fats and
oils. Its one Chapter is entitled:

15. Animal or vegetable fats and oils and their cleavage products; prepared edible
fats; animal or vegetable waxes.

Section IV: Prepared foodstuffs; beverages, spirits and vinegar; tobacco and
manufactured tobacco substitutes

This Section deals with animal and vegetable products, other than the fats and oils
specified above, that have been prepared beyond preliminary processing steps. Most,
but not all, are edible or consumable. The Chapters in this Section are as follows:

16. Preparations of meat, of fish or of crustaceans, molluscs or other aquatic

invertebrates.

17. Sugars and sugar confectionary.

18. Cocoa and cocoa preparations.

19. Preparations of cereals, flour, starch or milk; pastrycooks' products.

20. Preparations of vegetables, fruit, nuts or other parts of plants.

21. Miscellaneous edible preparations.

22. Beverages, spirits and vinegar.

Page | 16
 23. Residues and waste from the food industries; prepared animal fodder.

24. Tobacco and manufactured tobacco substitutes.

Top

Mineral Products

Section V: Mineral products

In Section V are grouped products taken from the earth through mining or similar
processes that are, for the most part in a relatively unprocessed state. These form the
raw materials used in the industries that produce many of the products found in
subsequent sections. The Chapters included are:

25. Salt; sulphur; earths and stone; plastering materials, lime and cement.

26. Ores, slag and ash.

27. Mineral fuels, mineral oils and products of their distillation; bituminous
substances; mineral waxes.

Chemical and Related Products

The next two Sections are related in that Section VI covers the chemical industry and its
products; Section VII deals with the rubber and plastics industries which are closely
related to the chemical industry.

Section VI: Products of the chemical or allied industries

This is a relatively large Section, comprising 11 Chapters. Chapters 28 and 29 deal with
chemicals and chemical compounds. The remaining Chapters classify the finished
products of the chemical and allied industries, according to relatively straightforward
categories. The Chapter titles are as follows:

28. Inorganic chemicals; organic or inorganic compounds of precious metals, of rare

earth metals, of radioactive elements or of isotopes.

29. Organic chemicals.

30. Pharmaceutical products.

31. Fertilizers.

32. Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and
other colouring matter; paints and varnishes; putty and other mastics; inks.

33. Essential oils and resinoids; perfumery, cosmetic or toilet preparations.

34. Soap, organic surface-active agents, washing preparations, lubricating

preparations, artificial waxes, prepared waxes, polishing or scouring

Page | 17
 preparations, candles and similar articles, modelling pastes, "dental waxes" and
dental preparations with a basis of plaster.

35. Albuminoidal substances; modified starches; glues; enzymes.

36. Explosives; pyrotechnic products; matches; pyrophoric alloys; certain

combustible preparations.

37. Photographic or cinematographic goods.

38. Miscellaneous chemical products.

Section VII: Plastics and articles thereof; rubber and articles thereof

The following Chapters are included in this Section:

1. Plastics and articles thereof.

2. Rubber and articles thereof.

Top

Non - Consumable Animal and Plant Products

The next 3 Sections seem to be a bit out of order in that they go back to the animal and
plant kingdoms to deal with leather and wood products respectively.

Section VIII: Raw hides and skins, leather, furskins and articles thereof; saddlery and
harness; travel goods, handbags and similar containers; articles of animal gut (other
than silk-worm gut)

This Section includes raw hides, skins and furskins, articles made from furskins, saddle
and harness items and travel goods such as luggage and handbags. Note that although
most products in the Section are based on animal skins, some products which serve
the same purpose as articles traditionally made from these raw materials but which are
made of other materials, are also included. Examples include artificial fur and some
kinds of non-leather luggage and handbags. On the other hand, some leather articles
such as shoes and furniture are not covered in this Section.

Three Chapters are covered by this Section:

41. Raw hides and skins (other than furskins) and leather.

42. Articles of leather; saddlery and harness; travel goods, handbags and similar
containers; articles of animal gut (other than silkworm gut).

43. Furskins and artificial fur; manufactures thereof.

Forestry and related products are covered by the next two Sections.

Page | 18
Section IX: Wood and articles of wood; wood charcoal; cork and articles of cork;
manufactures of straw, of esparto or of other plaiting materials; basketware and
wickerwork

In this Section are grouped products made of wood and a few other related plant
materials. The Chapters are as follows:

1. Wood and articles of wood; wood charcoal.

2. Cork and articles of cork.

3. Manufactures of straw, of esparto or of other plaiting materials; basketware and

wickerwork.

Section X: Pulp of wood or of other fibrous cellulosic material; waste and scrap of paper
or paperboard; paper and paperboard and articles thereof

This Section is concerned with products made of wood pulp and fiber. The following
Chapters are included:

47. Pulp of wood or of other fibrous cellulosic material; waste and scrap of paper or
paperboard.

48. Paper and paperboard; articles of paper pulp, of paper or of paperboard.

49. Printed books, newspapers, pictures and other products of the printing industry;
manuscripts, typescripts and plans.

Top

Textiles and Apparel

The next two Sections deal with textile fibres, textiles, wearing apparel and related
personal accessories.

Section XI: Textiles and textile articles

The textile and textile products Section is a large one due to the variety of such products
and the volume of international trade due to them. Further breakdown is based on the
raw materials used and degree of manufacture. The Chapter titles are as follows:

50. Silk.

51. Wool, fine or coarse animal hair; horsehair yarn and woven fabric.

52. Cotton.

53. Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn.

54. Man-made filaments.

Page | 19
 55. Man-made staple fibres.

56. Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables
and articles thereof.

57. Carpets and other textile floor coverings.

58. Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings;
embroidery.

59. Impregnated, coated, covered or laminated textile fabrics; textile articles of a

kind suitable for industrial use.

60. Knitted or crocheted fabrics.

61. Articles of apparel and clothing accessories, knitted or crocheted.

62. Articles of apparel and clothing accessories, not knitted or crocheted.

63. Other made up textile articles; sets; worn clothing and worn textile articles; rags.

Section XII: Footwear, headgear, umbrellas, sun umbrellas, walking-sticks, seat-sticks,

whips, riding crops and parts thereof; prepared feathers and articles made therewith;
artificial flowers; articles of human hair

This Section is concerned with articles of apparel that are not considered clothing. It
includes the following Chapters:

64. Footwear, gaiters and the like, parts of such articles.

65. Headgear and parts thereof.

66. Umbrellas, sun umbrellas, walking sticks, seat sticks, whips, riding crops and
parts thereof.

67. Prepared feathers and down and articles made of feathers or of down; artificial
flowers; articles of human hair.

Top

Non - Metallic Mineral Products

Section XIII: Articles of stone, plaster, cement, asbestos, mica or similar materials;
ceramic products; glass and glassware

This Section covers articles made from non-metallic minerals. The Chapter titles are as
follows:

68. Articles of stone, plaster, cement, asbestos, mica or similar materials.

69. Ceramic products.

Page | 20
 70. Glass and glassware.

Top

Metals and Manufactured Articles Made Mostly of Metal

Sections XIV through XIX form a very important progression. They deal with the huge
number of products made largely from metals.

Section XIV: Natural or cultured pearls, precious or semi-precious stones, precious

metals, metals clad with precious metal and articles thereof; imitation jewelry; coin

Precious metals, jewels and related products stand alone and are covered in the one
Chapter of this Section:

71. Natural or cultured pearls, precious or semi-precious stones, precious metals,

metals clad with precious metal and articles thereof; imitation jewelry; coin.

Section XV: Base metal and articles of base metal

Section XV takes the more common metals from their primary forms, through semi-
manufactures as far as tools and implements. Note that chapter 77 is not used in either
the International Nomenclature or the Canadian Tariff at the present time.

72. Iron and steel.

73. Articles of iron or steel.

74. Copper and articles thereof.

75. Nickel and articles thereof.

76. Aluminum and articles thereof.

77. (Reserved for possible future use in the Harmonized System)

78. Lead and articles thereof.

79. Zinc and articles thereof.

80. Tin and articles thereof.

81. Other base metals; cermets; articles thereof.

82. Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of
base metal.

83. Miscellaneous articles of base metal.

Section XVI: Machinery and mechanical appliances; electrical equipment; parts

thereof; sound recorders and reproducers, television image and sound recorders and
reproducers, and parts and accessories of such articles

Page | 21
This is the first of three Sections dealing with highly complex products made largely of
metals. Even though it is a huge Section, there are only 2 Chapters, the first dealing with
non-electrical machinery and the second with electrical machinery:

84. Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof.

85. Electrical machinery and equipment and parts thereof; sound recorders and
reproducers, television image and sound recorders and reproducers, and parts
and accessories of such articles.

Section XVII: Vehicles, aircraft, vessels and associated transport equipment

The specialized machinery for the transportation sector has its own Section. The
Chapters are as follows:

86. Railway or tramway locomotives, rolling stock and parts thereof; railway or
tramway track fixtures and fitting or parts thereof; mechanical (including electro-
mechanical) traffic signalling equipment of all kinds.

87. Vehicles other than railway or tramway rolling-stock, and parts and accessories
thereof.

88. Aircraft, spacecraft and parts thereof.

89. Ships, boats and floating structures.

Section XVIII: Optical, photographic, cinematographic, measuring, checking, precision,

medical or surgical instruments and apparatus; clocks and watches; musical
instruments; parts and accessories thereof

This is another highly specialized Section, comprising the following Chapters:

90. Optical, photographic, cinematographic, measuring, checking, precision,

medical or surgical instruments and apparatus; parts and accessories thereof.

91. Clocks and watches and parts thereof.

92. Musical instruments; parts and accessories of such articles.

Section XIX: Arms and ammunition; parts and accessories thereof

This is another very specialized Section, the title of whose one Chapter is quite self-
explanatory:

93. Arms and ammunition; parts and accessories thereof.

Top

Other Highly Manufactured and Special - Purpose Goods

Page | 22
The next two Sections cover a variety of types of goods that did not fit into any of the
other Sections.

Section XX: Miscellaneous manufactured articles

It is hard to characterize the products in this Section. Most are highly manufactured,
usually made of a mixture of materials. Many are consumer products. The Chapters
included in this section are:

94. Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed
furnishings; lamps and lighting fittings, not elsewhere specified or included;
illuminated signs, illuminated name-plates and the like; prefabricated buildings.

95. Toys, games and sports requisites; parts and accessories thereof.

96. Miscellaneous manufactured articles.

Section XXI: Works of art, collectors' pieces and antiques

Only the first Chapter in this Section reflects the Section title. The next one, Chapter 98,
is used for "special classification provisions". These refer to importations of goods for
very specialized purposes such as commercial samples, medals and trophies won
abroad, articles imported for public museums or schools. Note that Chapter 99 is not
used in the Canadian system.

1. Works of art, collectors' pieces and antiques.

2. Special classification provisions.

3. (Reserved for special uses by Contracting Parties)

Top

The Tariff Classification Number

Within each Chapter, goods are listed according to a hierarchical classification system,
broken down into finer and finer categories. The lowest breakdown level is called the
Classification Number. This is the number that must be used on the Customs
documents. There is a Classification Number for every product that anyone could ever
wish to import.

The Classification Number is put together in a very logical manner. Consisting of 10

digits, each digit provides specific data used to systematically produce an increasingly
accurate description of the item. Because the Harmonized System was designed to be
used on a global basis, the first 6 digits fulfil the international requirements while the
last 4 have been designated for Country-specific Tariff and statistical purposes.

Page | 23
Example: 0406.20.90.20 Cheese, as an animal product, is found in Section I: Live
Animals; Animal Products. Classification down to the 10 digit level can be reached as
follows:

04 is the Chapter designation indicating that the item belongs to Chapter 4: dairy
produce; birds' eggs; natural honey; edible products of animal origin not elsewhere
specified or included.

04.06 is the Heading within Chapter 4, creating a more specific description of the type
of dairy product: Cheese and Curd.

0406.20 is the Subheading indicating the type of cheese or curd: grated or powdered
cheese of all kinds. Note that the decimal in between the first two digits and last two
digits of the Heading level moves to after the first four digits in the Subheading level and
below.

0406.20.90 is the Tariff Item, describing the variety of grated or powdered cheese: other
than cheddar and cheddar types. The Canadian duty rate is assessed at this level. The
official unit of measurement is assigned, where applicable, at this level when the
Statistical Suffix is 00.

0406.20.90.20 is the Classification Number, specifying the exact type of grated or

powdered cheese other than cheddar: Romano. The classification number is built by
adding a two digit code, the Statistical Suffix (in this case 20) to the Tariff Item. Note that
all Classification Numbers belonging to a given Tariff Item will have the same duty rate.
As well, the official unit of measurement is assigned, where applicable, at this level
when the Statistical Suffix is other than 00.

The classification of an item can be somewhat more complicated than this. Often, the
digits at a given level are filled in with zeros indicating that no further breakdown is
required at that level. For example, look at 8502.20.00.00 the Classification Number for
Generating sets with spark-ignition internal combustion piston engines.

Note that the digits for the Tariff Item and Classification Number levels are zeros. This
indicates that no further breakdown beyond the Subheading is required and that the
Subheading, Tariff Item and Classification Number levels are all encompassed by the
same number. It is quite common for the last 2 digits of the Classification Number to be
filled in with zeros to indicate that the duty rates and statistical classification are to be
determined at the same level of detail.

On the other hand, when a more complex breakdown than that shown in the powdered
cheese example, above, is required, both digits of one or more levels are filled in with
non-zero digits. Look at the following examples:

8413.30.10 Fuel injection pumps for diesel or semi-diesel engines; pumps for the
marine propulsion engines tariff item No. 8408.10.10.
Page | 24
8413.30.10.10 For marine engines
8413.30.10.20 For locomotive engines
8413.30.10.30 For aircraft engines
8413.30.10.40 For engines for motor vehicles of Chapter 87
8413.30.10.90 For other engines
8413.30.90 Other
8413.30.90.10 Fuel pumps
8413.30.90.11 For marine engines
8413.30.90.12 For locomotive engines
8413.30.90.13 For aircraft engines
8413.30.90.14 For engines for motor vehicles of Chapter 87
8413.30.90.19 For other engines

Note that the first Tariff Item on the page, 8413.30.10, is broken down into 5
Classification Numbers by adding the pairs of digits, 10, 20, 30, 40, 90, respectively.
These are known as first level Classification Numbers.

The second Tariff Item shown, 8413.30.90 breaks down differently. Below the Tariff Item
is the Classification Number 8413.30.90.10 with the description, Fuel pumps. This is a
first level Classification Number. Below this are the numbers 8413.30.90.11 to
8413.30.90.19, each with a description. These are second level Classification Numbers.
Where there are second level Classification Numbers, the first level Classification
Number at the top of a group of second level Classification Numbers is simply a
Heading for the group of second level Classification Numbers. It cannot itself be used
on Customs documents. In many versions of the Tariff, the actual number would not be
shown, only the description so that the portion of the Tariff page shown above would
appear as follows:

8413.30.90 Other
Fuel pumps 11
For marine engines 12
For locomotive engines 13
For aircraft engines 14
For engines for motor vehicles of Chapter 87 19
For other engines

Similarly, there can be first and second level Subheadings and first and second level
Tariff Items.

Another important feature of the Tariff is the dash or series of dashes preceeding the
Subheading and Subheading description lines. The following table shows which dash
lines correspond to which tariff classification digit.

Page | 25
8413.30.90 Other
Fuel pumps 11
For marine engines 12
For locomotive engines 13
For aircraft engines 14
For engines for motor vehicles of Chapter 87 19
For other engines

Similarly, there can be first and second level Subheadings and first and second level
Tariff Items.

Another important feature of the Tariff is the dash or series of dashes preceeding the
Subheading and Subheading description lines. The following table shows which dash
lines correspond to which tariff classification digit.

Tariff Classification Digit

# of Dash lines
- 5th
-- 6th
--- 7th
---- 8th
----- 9th
------ 10th

When classifying, you must always classify within like description categories that have
the same number of dashes. The minimum number of dashes is one; the maximum is 6.
[Note: The exceptions to this rule occur when a Heading, Subheading or Tariff Item have
no further divisions. That is, a 6-digit item may have a single dash or an 8-digit item may
have 2 dashes.]

Example: The product you are classifying is pasta: fresh spaghetti. Using the stylized
Tariff page below, the steps involved to arrive at the correct Classification Number
(1902.19.90.10) is as follows:

1. First you must decide whether or not you pasta product is uncooked pasta, stuffed
pasta or other pasta. (The Headings with a single dash.)
2. Determine that your product is uncooked pasta. From here, you must determine
whether or not the pasta contains eggs or falls in the Other category. (The Headings with
2 dashes.)
3. Your product does not contain eggs so it falls in the Other category. From here, you
must determine whether or not it is macaroni and vermicelli, containing flour and water
only, or Other. (The Headings with 3 dashes.)
4. Since your product is spaghetti, it falls in the Other category. From here, you must

Page | 26
determine whether or not the product is fresh, frozen or dried.
5. Your spaghetti is fresh so you select Classification Number 1902.19.90.10.

Tariff Item SS Description of Goods 19.02 Pasta, whether or not cooked or stuffed (with
meat or other substances) or otherwise prepared, such as spaghetti, macaroni,
noodles, lasagna, gnocchi, ravioli, cannelloni, couscous, whether or not prepared. -
Uncooked pasta, not stuffed or otherwise prepared:

1902.11.00 --Containing eggs

10 -----Fresh
20 -----Frozen
30 -----Dried
1902.19 --Other
1902.19.10 ---Macaroni and vermicelli, containing flour and water only
10 -----Fresh
20 -----Frozen
30 -----Dried
1902.19.90 ---Other
10 -----Fresh
20 -----Frozen
30 -----Dried
1902.20.00 -Stuffed pasta, whether or not cooked or otherwise prepared
10 -----In air-tight containers
90 -----Other
1902.30 -Other pasta
1902.30.10 ---Without meal
10 -----In air-tight containers
90 -----Other

Tariff Item Details

At the Tariff Item and Classification Number levels can be found important information
needed in order to calculate the duty payable on an imported item and complete the
Customs accounting forms. The following example refers to 3204.17.10.12 the
Classification Number for quinacridone violet. A stylized tariff page is shown to
illustrate the type of information found at the Tariff Item and Classification Number
levels.

3204.17 Pigments and preparations based thereon

3204.17.10 Quinacridone pigments and preparations based thereon
MFN 5% Codes 0911, 3475, 3476
GPT Free
UST Free

Page | 27
3204.17.10.10 Pigments
3204.17.10.11
Red Unit of Measure KGM
3204.17.10.12
Violet Unit of Measure KGM
3204.17.10.19
Other Unit of Measure KGM
3204.17.10.20
Preparations
3204.17.10.21
Dispersions Unit of Measure KGM
3204.17.10.29
Other Unit of Measure KGM

Description of Goods - is an explanatory statement verifying the characteristics of the

item. Often the descriptions for a few levels above the Classification Number must be
examined in order to verify that the description associated with the Classification
Number really refers to the product in question. In this example, we need to look at the
following three descriptions:
Quinacridone pigments and preparations based thereon:

Pigments
Violet

These are the descriptions for the Tariff Item, the first level Classification Number and
the second level Classification Number respectively.

Unit of Measure Code - indicated by abbreviated units measuring the item by

volume/capacity, weight, area, number, etc. The unit of measure is used to determine
the value for duty on goods which have a specific or compound rate of duty.

eg. KGM--Imported quantities of Quinacridone Violet are measured by weight in

kilograms.

Trade Agreements and Associated Duty Rates - the rates of duty imposed upon the item
according to tariff agreements in effect with the country of origin are shown here. Duty is
calculated in the following ways: on an ad valorem rate (which is a percentage of the
value of the goods), on a specific rate per measure, or on a compound rate (which is a
combination of both).

eg. If this commodity was being imported from a country where the Most Favoured
Nation Tariff applies and provided all the conditions are met, duty is assessed on an ad
valorem rate of 5%. Both the General Preferential Tariff rate and the United States Tariff
rate are free.

Page | 28
Tariff Terminology

Certain principles are of help in interpreting the terminology of the Tariff. First, it is
essential to remember that because the main body and structure of the Tariff is based
on the international Nomenclature, a lot of the wording used will not match the type of
terminology commonly used in the U.S. or Canada, but will often sound a bit more
British. Second, the updating of the Tariff tends to lag behind technological innovation.
The descriptions of some products, especially those of a technologically sophisticated
nature, might seem a little old-fashioned or out of date. For example, "computers" are
referred to as "electronic data processing machines".

In addition, certain phrases and punctuation patterns have very specific uses and
meanings. These are detailed in the following sections.

Terminology in Tariff Item Descriptions

Punctuation: Punctuation is important in interpreting the wording of the Tariff. Semi-

colons, colons and commas are used for very specific purposes.

A semi-colon in a Tariff Item indicates a full stop and that the portions of the Tariff Item
divided by means of a semi-colon are separate and distinct from each other. Take, for
example, a description such as that given for heading 84.21:

Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus,

for liquids or gases.

This description refers to two separate product groups centrifuges and filtering or
purifying machinery and apparatus. The qualifying phrase, including centifugal dryers
refers only to the first product group, whereas the qualifying phrase for liquids or gases
refers only to the second.

Colons: Colons (:) are used to indicate that additional information follows which
pertains to the goods specified. Most commonly, it means that the product being
described at one level is further divided at the next level down by some characteristic
such as the material it is made of or whether it includes a certain part or performs a
certain function. For example, the text for Subheading 8501.30 is worded Other DC
motors, DC generators:. It is further divided into a second level of Subheadings that
describes various types of motors and generators ie. 8501.31, Of an output not
exceeding 750 W, 8501.32, Of an output exceeding 750 W but not exceeding 75 kW, etc.

Commas: Commas (,) are used to separate a list or series of goods within the product
groups delineated by the semi-colons. At the end of a product group, a comma is used
to separate the descriptor phrase from the list of goods to which it applies.

And/Or: The word 'And' is used in the same way as a comma, to connect items in a
series which are all to be included together. 'And' may also be used when there is more

Page | 29
than one condition which pertains to an item as in footwear with outer soles of leather
and uppers of canvas. This means that the footwear must satisfy both conditions in
order to be classified here.

The word 'Or' is generally used to show that alternatives exist. For example, in heading
73.20, Springs and leaves for springs, of iron or steel, the product in question can be
made of either metal in order to be classified in that Heading.

Other: The word 'Other' is very important in the Tariff and can be a little tricky. It can
occur on any level. At each level of the Tariff, the product in question is divided into
groups. Typically, the first few groups on a given level are described specifically, with
products that don't fit into any of these groups put into an Other category. For example,
the Heading 73.20 refers to Springs and leaves for springs, of iron or steel. It is divided at
the six digit level into 7320.10.00, Leaf springs and leaves therefor, 7320.20, Helical
springs and 7320.90, Other. The Other refers to springs that do not fit into the other two
groups. However, 7320.90 is also divided further, into 7320.90.10, Disc springs of a kind
used in machine tools for working metal. and 7320.90.90, Other. Note that the digits 90
at every level are reserved for the Other category.

Top

Terminology in the Legal Notes

Special terminology is also sometimes used in the Legal Notes portions of the Tariff.

Throughout the Nomenclature: One commonly used phrase is 'Throughout the

Nomenclature'. This is used in case in which words or expressions are defined in the
notes for a specific Chapter or Heading, but the definition will apply throughout the
whole Tariff. On the other hand, if these words are not used in a definition given in the
notes for a particular Section or Chapter, the definition should be taken as applying only
to that Section or Chapter.

Inter Alia: This means "among other things". Typically it is used with a list of similar
objects to indicate that the list is not exhaustive, and the classification is not restricted
to just what is listed.

Mutatis Mutandis: The literal definition is "making due alteration for detail". When this
wording is found in the Tariff, it allows an individual to make alterations for small
specific details in order to complete classifying the item being imported.

Context: The phrases 'Except where the context otherwise requires' and 'Unless the
context otherwise requires' mean that in those cases in which the Chapter or Section
Notes are incompatible with the Heading/Subheading Notes or the text of Headings and
Subheadings, the lower level notes and text will prevail.

WCO Explanatory Notes

Page | 30
As an aid to in-depth understanding, the international version of the Harmonized
System from the World Customs Organization has associated Explanatory Notes.

The Notes are arranged in the same order as the Tariff itself. They can be used to assist
in classification but have no legal force. They typically contain more detailed
descriptions of the products or groups of products to be included in a given area of the
Tariff often including detailed accounts of the manufacturing processes to be used.

ECCN, Tariff Classification and Duty Rates for your Cross-

Border and International Sales
The trade content and tools you need to classify your goods with their export ECCN
or import harmonized tariff classification numbers, find duty rates, and calculate
landed costs.

Studies show that taking the guesswork out of the additional import duty and tax costs
increases the chances of making cross-border or international sales on your
eCommerce or Internet shopping sites, especially in crowded markets! As well,
providing your on-line shoppers with accurate landed cost estimates has been shown to
reduce returns, and encourage repeat business.

Even if your business model excludes being the importer of record and controlling
deliveries to door, efficient and economical shipping has become a necessity.

• At a minimum, you need to classify your goods for export

• Going that extra mile, you'll also want to classify your goods according to the
import tariff of your customer's country

Trade Content and Web-Based Tariff Classification Tools

So how do you efficiently and economically get the information and tools you need to
power import and export tariff classification and calculation of landed costs?

It's simple, contact us. Customs IQ provides the technical content you need to
accurately calculate landed costs. As well as the world's most popular web-based site
to help you classify your goods for export or import into more than 170 different
markets.

Customs IQ solutions will keep you up to date with the latest trade content, easily
and affordably.

Call 1 (877) 328-7866, or for a prompt call-back use the Contact form.

Page | 31
Page | 32