Today, international trade is a complex web of regulations and standards. To facilitate the smooth flow of goods across borders, it’s crucial to have systems in place to classify and track products accurately. Two such systems are the International Transaction Number (ITN) and the Harmonized System (HS) Code.
In this blog, we will delve into the key differences between the two and explore how to use them effectively in international trade.
Understanding ITN (International Transaction Number):
An ITN, also known as an Electronic Export Information (EEI) filing, is a unique number assigned by the U.S. Census Bureau’s Automated Export System (AES). Its primary purpose is to track and monitor exports from the United States. When goods are shipped out of the U.S., exporters are required to submit electronic export information to the AES, which generates an ITN as proof of compliance.
Key Characteristics of ITN:
- Uniqueness: Each ITN is specific to a particular export transaction, ensuring accurate tracking and reporting.
- U.S. Focus: ITNs are used exclusively for exports from the United States and are not applicable to imports or other countries.
- Regulatory Compliance: Obtaining an ITN is a legal requirement for U.S. exporters, and non-compliance can result in penalties.
Your ITN number request for Canada shipment is mandatory if you are importing to Canada.
Understanding HS Code (Harmonized System Code):
HS Codes are part of a globally recognized system for classifying products for customs and statistical purposes. HS Codes assign a unique code to each product based on its characteristics, such as materials, use, and function.
Key Characteristics of HS Codes
- Global Standard: HS Codes are internationally recognized and serve as a common language for trade across borders.
- Comprehensive Classification: These codes provide detailed information about products, making it easier to determine import/export duties and restrictions.
- Versatile: HS Codes can be applied to both imports and exports, facilitating consistency in trade documentation globally.
How to Use ITN and HS Codes:
- Identify Your Product: Start by determining the exact nature of the product you are importing or exporting. This involves a detailed examination of its composition, purpose, and features.
- HS Code Assignment: Use the HS Code system to classify your product accurately. The code consists of a series of numbers, with the first six digits being standardized globally, and additional digits providing more specific information.
- ITN Generation: If you are exporting from the U.S., ensure that you obtain an ITN through the AES when filing your Electronic Export Information. This step is crucial for compliance with the U.S. export regulations.
- Customs Declaration: When you submit your product for customs clearance in the destination country, include the HS Code on all relevant documentation. This helps customs authorities assess duties and ensure proper handling.
- Record Keeping: Maintain detailed records of your ITNs and HS Codes for future reference, audits, and reporting purposes.
While ITNs and HS Codes serve different purposes in international trade, they are both vital for smooth and compliant cross-border transactions.