Navigating the world of international trade can feel like walking through a minefield—especially when it comes to product classification. You might think, "How hard can it be to assign a code to my product?" But the truth is, getting your HS classification code wrong can lead to some serious headaches, including hefty fines, delays, and even legal issues. That’s why accurate HS code classification is crucial for your business.
In this blog, we’re going to explore the importance of getting your product classifications right, the potential pitfalls if you don’t, and how Customs4trade’s, AI-powered, CAS Classification platform, can be your secret weapon in avoiding these costly mistakes.
When you’re shipping products across borders, the classification code you choose isn’t just a number—it’s the key to your entire customs process. This code determines the duty rates, excise rates, and any import restrictions your product might face. It’s the first, and arguably the most important, step in ensuring your goods move smoothly from point A to point B.
But here’s the thing: with thousands of possible classification codes, making the right choice can be a real challenge. Misclassifying a product can have a ripple effect, disrupting your entire supply chain. Incorrect codes can lead to delays, fines, or even the seizure of your goods. In short, getting your classification wrong is a risk you can’t afford to take.
Let’s be honest—researching and verifying classification codes is no walk in the park. It’s time-consuming, and even after hours of research, there’s no guarantee you’ll get it right. Sure, you could hire a consultant or broker to take the task off your hands, but you’re still liable if something goes wrong. Plus, outsourcing can be expensive.
So, how can you streamline this process and reduce the risk of error? Enter CAS Classification. This AI-powered tool is designed to take the guesswork out of product classification. By analysing your SKU descriptions, images, PDFs, and even the country of origin, CAS suggests the most accurate product classification codes for you to use. All you have to do is review the suggestions, make any necessary tweaks, and you’re done. It’s that simple!
Making mistakes in product classification isn’t just inconvenient—it’s costly. Whether it’s an honest error or a misstep by a third party, using the wrong classification code can have serious consequences.
Take the case of Star Images Enterprises, a UK-based importer of licensed dolls and action figures. After an audit, HMRC (the UK’s customs authority) determined that the toys should have been classified under a code with a 4.7% duty rate, rather than the zero-rated code the company had used. This led to a lengthy tribunal where every tiny detail—from whether the figures were human or non-human, to whether they were dolls or statuettes—was hotly debated.
What’s the lesson here? Classification is complex, and even the smallest details can make a big difference. With CAS Classification, fines could have been avoided. For example, running a search for “Captain America Plastic Figure” in CAS Classification would have returned the correct duty rate of 4.7%, complete with a nine out of ten confidence score to back it up.
If you regularly introduce new products or SKUs, especially during peak seasons, you know how challenging it can be to classify them quickly and accurately. The stakes are even higher when you’re dealing with seasonal demand, where time is of the essence.
Here’s where CAS Classification shines. Not only does it generate classification codes for new products, but it can also perform a health check on your existing classifications. This ensures that your current codes are still valid and accurate, saving you from any unpleasant surprises down the road.
To use CAS Classification, simply upload a document with your current classification code, product description, images, and country of origin. The system validates this information and suggests the best product classification code, complete with a motivation and confidence score. The more details you provide, the more accurate the result.
For businesses operating on a global scale, obtaining classification codes for each jurisdiction is a must—and it’s a lot of work. But CAS Classification has got you covered. Currently, it supports product classification for both EU TARIC and UK TARIFF, with plans to add support for Switzerland, the United States, and more.
And here’s a handy tip: the first six digits of an HS code are universal, meaning they’re the same in every country. So, even if CAS Classification doesn’t yet support a specific country, you can still get a head start by using these six digits generated by our classification assistant and then completing the classification with the last two digits from your local HS database.
Ready to simplify your classification process and avoid costly mistakes? CAS Classification offers a free managed sample to help you get started. Apply here to see how CAS Classification can work for your specific products.
In conclusion, navigating the complex world of product classification doesn’t have to be a nightmare. With CAS Classification, you can streamline the process, avoid costly mistakes, and stay compliant with ease. Whether you’re managing new SKUs, adapting to seasonal changes, or handling classifications across multiple regions, CAS is here to help.
Simplify your classification process, stay ahead of potential issues, and keep your customs operations running smoothly with CAS Classification. Your business—and your bottom line—will thank you.
For more information or to request a demo, visit our website or contact us today!