Understanding the EU Common Tariff and TARIC System
Theme 5: The Common Tariff
1. Classification of Goods
Classification is performed for customs purposes. It allows customs authorities to establish the type of duty to be applied to every type of goods according to the tariff classification. Goods must be correctly classified according to this unique classification.
Restricted Goods
Restricted goods have the potential to pose economic, health, environmental, safety, cultural, or moral risks.
Prohibited Goods
Prohibited goods are completely illegal to export to other countries.
Strategic Goods
Strategic goods are products and commodities related to a country’s security interest.
Quotas
Quotas are quantitative limits placed upon the importation of goods from all countries or specific countries.
What is a Tariff and What is its Basic Structure?
The EU tariff is an instrument of trade policy, economics, and taxation that is used as a protective barrier to regulate the entry of goods from outside the customs territory of the EU. It is composed of two parts:
- The tariff nomenclature, which is the structure or systematic cataloging of goods.
- The tariff is a set of charges applied to each item of goods to set the degree of protection.
What is the Harmonized Tariff System?
The Harmonized System (HS) is a systematic listing of products (not services). The Harmonized System contains a name and code for all goods that are traded. This sorts them into two criteria: by their kind of nature and by the degree of processing of products, from less developed to more developed.
Content of the Sections, Chapters, Headings, and Subheadings of the HS
Goods are grouped into headings, which represent a description of the goods. The headings are subdivided into subheadings, and they give a more comprehensive description of the goods. Used in more than 120 countries, every type of goods is allocated a 6-digit code, and every part of the code has specific information on the goods.
Structure of CN:
Chapter: 2 digits; Heading: 4 digits; Subheading: 6 digits; CN-Subheading: 8 digits
The Combined Nomenclature (CN)
The CN is the EU coding system for classifying products for customs statistical purposes. The Combined Nomenclature is an 8-digit coding system.
TARIC
What is TARIC?
TARIC is the EU’s online customs tariff database. It is a multilingual database that integrates all measures relating to tariff, commercial, and agricultural legislation. Daily transmission of TARIC data via an electronic network guarantees that it is always up-to-date and correct.
Content
- Tariff Suspensions
- Quotas
- Tariff Preferences
- Prohibitions on Imports
- Import Restrictions
- Export Restrictions
- The Rate of Excise Duty
7. Binding Tariff Information (BTI)
BTI assists economic operators in obtaining the correct tariff classification for goods.
BTI is: issued on request to economic operators by the customs authorities of Member States, valid throughout the company, and provides legal certainty with regard to tariff classification.
BTI is generally valid for 6 years.