Nomenclature
Also known as: Combined Nomenclature, goods nomenclature
Nomenclature is the system of goods descriptions and codes in which you classify a product. Worldwide that is the HS of six digits, in the EU the Combined Nomenclature of eight, on import TARIC of ten.
How is the nomenclature built?
The base is the Harmonized System of the World Customs Organization: six digits that mean the same thing in more than two hundred countries. The EU adds two digits to make the Combined Nomenclature of eight, for export and statistics. For import two more are added, to the TARIC code of ten. A cotton coat then runs like this: HS 610120, GN 610120.10, TARIC 610120.10.00. Each layer is a refinement, not another product. Anyone who stops at six digits on import has no rate and no measures. The nomenclature is not a catalogue of brands. It is a legal classification. The text of the heading, the notes to the sections and chapters, and the six general rules determine where the product belongs, not the trade name on the invoice. Anyone who types the trade name into the Gebruikstarief and takes the first hit skips that legal step. Reading the heading text is the classification. The search term is only the way into the right branch of the tree.
When do you use six, eight or ten digits?
Six digits suffice for e-commerce consignments under one hundred and fifty euro, the H7 set in DECO. You use eight digits on export and for Intrastat. You use ten digits on import into the EU, because that is where the measures hang: rate, anti-dumping, quotas, prohibitions, document codes. Anyone who files the GN code on import gets a rejection. Anyone who supplies ten digits on export may do so, but the last two do nothing there. The nomenclature is the same system, the depth follows from the declaration type. Customs transit as a rule asks for six digits. No rate is set, the description must make the goods recognisable. A six-digit code with the description goods is reason enough for a control order. Put in the master data which layer the article carries and for which declaration type. An SKU that is both imported and exported needs ten digits, of which the last two are ignored on export. That is cleaner than two codes side by side that drift apart.
How often does the nomenclature change?
The HS is revised every five years. The last round was HS 2022, the next is HS 2028. The Combined Nomenclature changes every year on 1 January. TARIC changes daily, because measures go on and off. A code that was valid in December can have lapsed or split in January. Declarations with an old GN code are rejected from 1 January, even if the product has not changed. The EU correlation tables show which old code goes to which new one. Article master data should keep that change. Without a date of last check it is not visible which articles must be walked through after the year turn. The spike of rejected declarations in the first week of January almost always comes from here. Put a check in November, not in January. The new GN is in the Official Journal in the autumn. Anyone who corrects then has a file that is accepted on 1 January. Anyone who waits for the first rejection has a week of standstill.
How do you classify a product in the nomenclature?
Classification follows the six general rules, in order. Rule 1 says that the text of the headings and the notes is decisive. The titles of sections and chapters are only a guide. Rule 2 opens headings to incomplete and unassembled goods. Rule 3 gives the order when several headings fit: first the most specific description, then essential character, then the last heading in numerical order. Rules 4 to 6 catch the rest, packings and the subheadings. In practice most disputes stay at rule 1 and rule 3. A composite product, a set, or a machine with accessories is where classification is worth money, because two plausible headings can differ by ten percentage points of duty. Write the applied rule against the article. At a check that is the difference between a substantiated classification and a code from habit. Habit is not a rule.
What is the difference between nomenclature, HS, GN and TARIC?
Nomenclature is the system. HS, GN and TARIC are the layers of it. Anyone who says nomenclature and means the GN is talking about the European layer. Anyone who says nomenclature and means the ten-digit code is talking about TARIC. In the Dutch Gebruikstarief they stand in one tree. The DTV, the Douane Tarief Voorziening, is the data source behind that tree, supplemented with VAT and excise. A declaration system checks the code against the DTV before the message goes to DMS. The nomenclature does not only determine the rate. It determines whether an inspection is needed, whether an authorisation is required, whether anti-dumping sits on it, and which document codes belong on the declaration. A wrong layer in the system pulls the rest of the file the wrong way. Treat the nomenclature therefore as master data, not as something the declarant looks up per consignment. The declarant checks. The system is fixed until the next change, and that change is file work, not declaration work.
How do you keep the nomenclature in your article file?
Record per article the code, the layer you use (six, eight or ten), and the date on which it was last checked. Also record what the classification rests on: the heading text, a note, a BTI or a classification regulation. At a check the question is not which code you use, but why. A reference to the reasoning saves days of searching. A BTI is for three years the strongest answer, and valid across the EU. Walk the file along the correlation tables every autumn. Lapsed codes are rejected on 1 January. Anyone who only notices that in January has a week of rejected IMAs and a team looking up codes instead of filing declarations. A BTI on an article does not make the annual round unnecessary. The BTI can lapse if the heading splits. Check BTIs in the same round as the correlation tables, or in January there is a binding code on a heading that no longer exists.