This article is for informational purposes:
With all international trade, each country - that means both the exporting country as well as the importing country - will impose restrictions on merchandise. While some items will have no restrictions, most will have some form of duties and/or taxes. Some may have license restrictions (e.g. you must be a registered and licensed entity for those types of goods, such as firearms) and some are completely banned. Thus, a shipment is required to have paperwork describing the commodities within so that these regulations can be more uniformly applied (and not as subject to the whim of interpretation of a customs agent having a bad day).
With the number of different languages, dialects, cultures, character sets, etc, it can be difficult to correctly assume what is needed - but luckily, there is a standardized format accepted by nearly all commercial trade.
Well, sorry, that’s not really true- there are actually two formats. One is used by the Universal Postal Union - the consortium of post offices across the world - and the other is used by the rest of commercial carriers. They both use basically the same fields, but simply produce different documentation formats. We’re going to call both of them the “Commercial Invoice” (or “CI” for short), but in postal terms, it is a document called the “CN22” or “CN23”.
To identify each commodity as uniquely as possible for the sake of brokerage, it is strongly recommended to specify the “Harmonized Code” for each item. This is a four digit number that specifies the general classification, followed by a two digit number with some additional specifics, and optionally followed by an additional four digits for maximum clarification. MOST countries agree on the first six digits; the last four may vary slightly.
For example, the code “6401.92.3000” represents:
- “6401” - Waterproof footwear with outer soles and uppers of rubber or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging, or similar processes
- “92” - Covering the ankle but not covering the knee
- “3000” - Ski-boots and snowboard boots
To find the code for your items, you can search for it online, or hire a number of firms to classify them for you. Remember when we said “the last four may vary slightly” ? Even in the US, there are actually two lists (which can differ slightly) valid for trade:
- The US Harmonized Tariff Schedule https://hts.usitc.gov/
- The Census Schedule B: https://uscensus.prod.3ceonline.com/
With most carriers, you do not HAVE to specify the harmonized code, but it is strongly recommended for ease of customs clearance. If you do not, make sure text you pass in the description field is detailed. Certain terms considered legally “vague” can get your package held or even rejected outright. Examples of such vague terms include (but are certainly not limited to) “apparel”, “cable”, “computer parts”, “electronic goods”, “gift”, “machine part”, “plastic goods”, “sample”, and “tools”.
Once you have identified the item, the next set of fields quantifies the item. While most sales are completed with a unit of measure such as “each” (“I bought two each of the snowboard boots”), the tariffs may be imposed on a different metric such as the total cost or the weight of the item. It is recommended to supply both for each item, even if a particular carrier does not REQUIRE both.
First, note that the line items on your CI do not need to be a 1:1 to the ones on your bill of sale (whether you include one or not). It can be, though, and many integrations find it easier to do it this way; however, conversely, for large orders, a significant number of items may have the same classification to customs that it is easier to represent only the sum of each type.
One more item not covered by the harmonized code is the country of origin. This is the country where the item was made- or in the case of multiple assembly points, most significantly manufactured or assembled. Please use the ISO-3166 two letter code here.
Most Commercial Invoices have a line level field called “Marks/Numbers”. This field is used to identify the product in the physical box, such as by a human readable SKU or product number. Why would you use it? Say, for example you ship an end-user a number of gear fittings in two different metals- one out of cheap cast iron and the other from a highly corrosion resistant alloy… and they are taxed at different rates. An inspector may want to verify “oh, yes, there are ten of the cheaper ones and one of the more expensive ones” and could use this field to differentiate the inventory of physical products.
For items that may be restricted and require a license, such as weapons, cryptography equipment, lasers, or other such items you may need to specify the Export Control Classification Number (see https://www.bis.doc.gov/index.php/regulations/commerce-control-list-ccl ), and, if a license is required, the license number.
Beyond the information required for the creation of the customs documentation, some countries (Such as, but not limited to, America and Canada) also have electronic export information requirements - that is, you must submit what you are shipping prior to doing so.
While you could read the entirety of 15 CFR §30.7 ( https://www.govinfo.gov/app/collection/cfr/2021/title15/subtitleB/chapterI/part30/subpartA/Section%20%C2%A7%2030.7 ) for the US origin rules, the crash course mandates that filings be made for every shipment that:
- Has a single commodity valued over USD2500 (e.g. the sum of all products under a single harmonized code exceeds USD2500);
- Has any item that requires an export license;
- Is destined, regardless of content or intention for use, to a “terrorist supporting country” as defined in Country Group E:1 in Supplement 1 to 15 CFR §740 ( https://www.govinfo.gov/app/collection/cfr/2021/title15/subtitleB/chapterVII/subchapterC/part740/Supplement%20No.%201%20to%20Part%20740 ) , which currently includes Cuba, Iran, North Korea, Sudan, and Syria.
- Has items classified as “rough” diamonds (e.g. Harmonized codes starting with 7102.10, 7102.21, and 7102.31)
If this applies to you, you need to file your shipment prior to tendering to carrier using the US Automated Export System ( https://www.cbp.gov/trade/aes/introduction ) or an authorized trading partner. Doing so will give you a serial number called an “ITN” that you cite on the CI as proof of filing (e.g. “AES ITN X20220915000056”)
If this does NOT apply to you, the shipment should specify an Exception Citation instead. The full list can be found at https://www.ecfr.gov/current/title-15/subtitle-B/chapter-I/part-30/subpart-D , but popular ones include:
- “NO EEI 30.37a” - No single commodity exceeds the USD2500 mark or otherwise has qualities mandating EEI Filing
- “NO EEI 30.36” - Shipment is of any value to Canada that does not require an export license
- “NO EEI 30.37q” - Shipment is a temporary export (such as a repair) that will be returned to the US within one year
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