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25.06.2018 | Людмила Теселкина

Customs Dress code

The market of fashionable clothes, shoes and accessories has a unique specificity with characteristic seasonality, peak, work with colors and sizes within one model, as well as a huge number of product line identifiers. Ordered goods must be delivered to stores in the right quantity, in a timely and high-quality manner. At the same time, the high share of the import component imposes additional requirements on the organization of transportation, including customs clearance and cargo insurance services. All this implies a special organization of logistics in the fashion segment. One of the most difficult and demanding issues of customs clearance is the correct classification of goods in accordance with Commodity Nomenclature of Foreign Economic Activity (HS).
HS code a key concept in customs regulation, depending on which the rates of customs duties, payments and VAT are set, the requirements for mandatory non-tariff regulation applied to the goods are signed (declaration of conformity, certification, licensing, issuance of various kinds of import or export permits by competent regulatory authorities,  permits confirming compliance with prohibitions and restrictions imposed on trade with third countries, etc.), risk levels in the customs control system are established.
Incorrect classification of goods in accordance with the HS code at best results in additional customs duties and payments for the importer, at worst - administrative, and in some cases even criminal liability. Not to mention delays in the release of goods in customs terms and the resulting additional costs during transport downtime.
It is worth paying special attention to the fact that the verification of the correctness of the HS code stated in the customs declaration can be carried out by a customs inspector both before the release of goods in customs relation, and after  within three years after importation at the stage of the so-called "post-customs control».
Light industry goods (clothing and footwear) due to their wide assortment range are among the most difficult to classify for customs purposes. The classic of the genre has already become an example of coding in accordance with the HS of such a wardrobe item as a polo. Most of us at this mention will probably think of a knitted T-shirt (commodity item HS 6109 – «T-shirts, sweatshirts with sleeves and other undergarments knitted by machine or hand knitting »). But, according to the explanations to the HS, a knitted T-shirt cannot have a collar and a slit at the neck, therefore polo should be classified as shirts and blouses, which means that it is in the HS 6105 heading (if the polo male) or HS Code 6106 (if the polo is female).
To determine the HS code, information about the trade name of the product (for example, «skirt », «shirt », «dress », etc.), the age category for which it is intended, the percentage composition is also very important the fabric from which it is sewn, size characteristics in centimeters (especially if there are children's clothes in the line), its gender, model (article), trademark, manufacturer. Correct and, most importantly, a complete description of the goods in the 31 column of the customs declaration, even with an incorrectly defined code HS , in some cases can become insurance against unpleasant consequences for the importer. At the same time, relying on only the product codes specified in the export declaration is also too presumptuous and wrong.
In some particularly difficult cases, classification in accordance with the HS may require special knowledge and experience of specialists, then a participant in foreign economic activity may:
  • involve a customs representative or consultant;
  • request additional information about the goods from a foreign supplier/manufacturer or organize an independent examination;
  • get a preliminary decision on the classification of goods in the customs authorities.
It is important to remember: if a company with a large import flow turns to several customs representatives for help at once, it is necessary to ensure that goods of the same article are not declared with different codes HS! But this is a topic for a separate article.