Are HS code and CN code the same?

If you’re involved in international trade, you know that classifying your products correctly is crucial for smooth customs clearance. Two terms you’ll frequently encounter are the HS Code and the CN Code. While they are closely related, they are not interchangeable. Understanding the distinction is essential, especially if you are shipping goods to or from the European Union. This guide will clarify the relationship between these two critical classification systems.

What is an HS Code?

The Harmonized System, or HS Code, is an international standard for classifying traded products. Developed and maintained by the World Customs Organization (WCO), it is used by more than 200 countries and economies as a basis for their customs tariffs and for collecting international trade statistics. This system categorizes about 5,000 commodity groups in a logical structure, assigning each a unique six-digit code. The universal nature of the first six digits of an HS Code helps customs authorities worldwide identify products and apply the correct duties and taxes.

What is a CN Code?

The Combined Nomenclature (CN) is the European Union’s own system for classifying goods. It is used for processing customs declarations for import and export within the EU. The CN Code is built directly upon the foundation of the international HS Code. It takes the six-digit HS Code and adds two more digits to provide a greater level of detail specific to the EU’s needs. This results in an eight-digit CN Code. These extra digits are used for applying customs duties, managing import quotas, and gathering more detailed trade statistics across the EU member states.

The Relationship: How HS and CN Codes Work Together

The core relationship is hierarchical: the CN Code is a more detailed extension of the HS Code. Think of it this way:

• First 6 Digits: These are the universal HS Code digits, recognized globally. For example, a grand piano might have an HS Code of 9201.20.
• Next 2 Digits (7th and 8th): These are the CN subdivisions, creating the eight-digit CN Code. An upright piano, for instance, might be classified under CN Code 9201.10.90 within the EU. This further detail is necessary for applying specific EU tariffs and trade policies.

Essentially, every CN Code contains an HS Code within its first six digits, but not every HS Code is a complete CN Code.

Key Differences Summarized

Let’s look at a quick comparison. The HS Code is a six-digit global standard managed by the WCO, updated every five years, and used worldwide for customs classification. The CN Code, on the other hand, is an eight-digit system used exclusively within the EU, managed by the European Commission, and updated annually. While the HS Code forms the base, the CN Code provides additional specificity required for EU customs and statistical purposes.

The Consequences of Misclassification

Using the wrong code—whether it’s an incorrect HS Code or an incomplete CN Code for an EU shipment—can lead to significant problems. Misclassification can result in:

• Incorrect Duty and VAT Payments: You might overpay on duties and taxes, hurting your bottom line, or underpay, leading to penalties.
• Customs Delays: Shipments with incorrect codes are often flagged for inspection, causing significant delays and disrupting your supply chain.
• Fines and Penalties: Customs authorities can impose heavy fines for non-compliance, viewing misclassification as a serious error.
• Loss of Credibility: Repeated errors can damage your company’s reputation and lead to increased scrutiny on all future shipments.

Frequently Asked Questions

1. Is an HS Code enough to import goods into the EU?
   No. For customs declarations in the EU, you must use the full eight-digit CN Code. A six-digit HS Code is considered incomplete and will be rejected.
2. Where can I find the correct HS or CN Code?
   The official HS Code database is managed by the WCO. For CN Codes, you should refer to the EU’s official TARIC database or the national customs authority website of the EU country you are shipping to.
3. How often do these codes change?
   The global HS Code system is updated by the WCO every five years. The EU’s Combined Nomenclature (CN) is updated annually, with changes typically taking effect on January 1st.
4. Can the same product have different codes?
   A product will have the same six-digit HS Code base globally. However, the subsequent digits (for the CN Code in the EU or other national tariff codes elsewhere) will vary by country or economic union.

Ensure Compliance and Avoid Delays

Navigating the complexities of HS codes and CN codes can be challenging, especially with regulations constantly evolving. A single mistake can cost you time and money. Don’t leave your customs declarations to chance. LCS Customs Brokers can verify your product classifications, ensure you are using the correct codes, and accelerate your clearance process.

Contact us today to ensure your shipments are fully compliant and avoid costly delays.