General rules of interpretation

Classifying goods can be extremely difficult and subjective and largely depends on the details provided for an item. When classifying, it's critical to follow the six general rules of interpretation (GRIs). These rules are applied sequentially to ensure uniformity and consistency when assigning HS codes to a product and should be applied every time an item is classified.

1. Terms of the headings, section/chapter notes 

"The titles of Sections, Chapters, and sub-Chapters are provided for ease of reference only; for legal purposes, Classification shall be determined according to the terms of the headings and any relative section or chapter notes." -World Custom's Organizations' GRI

If a product's details clearly describe a product that matches the HS schedule, it should be classified accordingly. For example, if you're classifying dried grapes, it should clearly be classified under heading 0806, "grapes, fresh or dried."

2. Unassembled or disassembled goods 

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.

2(a) If a product is unassembled or disassembled, it should be classified in the same heading as the assembled article. For example, a shipment of a bike missing the wheels would be classified in heading 8712, "bicycles and other cycles, not motorized."

2(b) Mixtures and combinations of materials. A wooden table (9403) with rubber endcaps (4016) would get classified as 9403 because the main material of the item is wood.

3. Two or more headings 

When goods are classifiable under two or more headings, classifications shall be effected by 3(a): the most specific heading, 3(b): goods consisting of different materials or components or sets shall be classified by the product's main essential character, and 3(c): last in numerical order.

3(a) When two or more headings each refer to part only of the materials or substances contained in mixed or composite goods. For example, a rubber yoga mat could get classified as a rubber item 4016, but the classification that clearly identifies the product is 9506, "articles and equipment for general exercise”.

3(b) Mixtures, composite goods consisting of different materials or made up of different components. For example: Chocolate covered graham crackers are classified under 1806. Even though it has equal amounts of chocolate and graham cracker, the essentical character is the chocolate.

3(c) If an item can't be classified in reference to GRI 3(a) or 3(b), then you'd default to the last in numerical order according to 3(c). Rule 3(c) is for use in cases in which a good seems to fit in more than one heading and the essential character cannot be determined. For example, combined gift sets that have both "hats" which are classified under heading 6505 and “socks” which are classified under heading 6115, it'd be classified under heading 6505, the last in numerical order. There is no item that gives this gift set its essential character.

4. Most akin (of similar character) 

Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods which they are most akin.

5. Containers 

5(a): Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases, and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use…, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character.

5(b): Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

5(a) applies to long-term use cases, boxes, and containers when they're made for the product inside and are classified together (both the product and the case). For example, a "drone" alone is classified in 8806, "Unmanned aircraft," and if the drone came with a case, the heading would remain 8806 for both items.

5(b) applies to packaging cases, boxes, and containers that are not intended to be reused. For example, a cardboard box with saltwater taffies inside should be classified as saltwater taffies.

6. Subheading rule 

For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative Section and Chapter Notes also apply.

Rules 1-5 cover every use case to classify to the heading level. Once you've selected your heading, you reapply rules 1-5 to determine your subheading classification.

For example, if you're classifying a "Duracell battery," you should have selected heading 8507, "Electric accumulators," by following rule 3(a). From there, you'd select the subheading 8507.60, "Lithium," based on reapplying rule 3(b), the product's essential character.

Exceptions 

Exceptions to the universality of the six-digit WCO code classification structure do exist. Since every country has the autonomy to make determinations where certain goods fall into their tariff schedule, the door is open for goods to be sorted differently from country to country. For example, in the U.S., a metal food cart is classified as a metal cart, whereas in Canada it is classified as a kitchen tool. In this case, the classification for these two items will be found in different chapters. Although these divided classification results do exist, they are the exception, not the rule. In most cases, goods are classified in the same chapter, heading, and subheading from country to country.