The customs classification of goods is a fundamental aspect of import-export operations and, with the reengineering of customs systems, also for goods in transit.

Incorrect classification of goods can lead to unnecessary costs, delays in customs clearance, misapplied duties (penalties apply for both over- and under-declarations), the avoidance of certain border controls, and even substantial fines.

What is customs classification of goods?

Customs classification is the process of determining the nature of a product by assigning it a unique 6- to 10-digit code—known as a customs tariff code—to correctly classify the goods according to shared standards.
This classification is valid for both imports and exports, depending on the length of the code used.

The classification system is based on a series of RULES and support systems to ensure the accurate categorization of goods.

Assigning a unique code is necessary to precisely identify the type of goods, their origin, intended use, tariff treatment, and any import/export restrictions.

What classification systems exist?

Harmonized classification systems were introduced by the World Trade Organization to create a globally consistent and shared framework, allowing people from different backgrounds to classify goods for import-export operations.

There are three main classification systems:

• Harmonized System (HS Code): A 6-digit code recognized worldwide for classifying goods and determining applicable customs rules and duties.

• Combined Nomenclature (CN): A 2-digit extension introduced by the European Union to harmonize classification within the EU.

• TARIC (Integrated Tariff of the EU): An additional 2-digit code used to provide the most detailed description of goods entering the EU.

Structure of a TARIC Code

Harmonized System (HS):

• 1st–2nd digit: Chapter

• 3rd–4th digit: HS heading

• 5th–6th digit: HS subheading

Combined Nomenclature (CN):

• 7th–8th digit: EU subdivision (import/export)

TARIC:

• 9th–10th digit: TARIC subdivision (EU measures)

Additional TARIC Codes:

• 11th digit: Anti-dumping or countervailing duties

• 12th digit: Agricultural elements, pharmaceutical substances

• 13th digit: Preferential tariff quotas

• 14th digit: CITES-listed products, refunds, and other specific measures

Code length by trade type:

• Intra-EU trade (purchases/sales): 8 digits

• Export to non-EU countries: 8 digits

• Import from non-EU countries: 10 digits

There are 99 chapters divided into 21 sections, and approximately 20,000 TARIC codes—regularly updated—that allow for the classification of all goods.

What are the rules for customs classification?

Correct classification is essential to determine applicable import duties and to identify any binding trade measures (e.g., anti-dumping or safeguard duties).

To ensure proper standard application, countries using the HS Code must follow the 6 General Rules of Interpretation (GRI) established by the World Customs Organization (WCO).

What happens in case of incorrect classification?

An incorrect classification may result in:

• Evasion of customs duties, with serious penalties (Art. 303 of the TULD 43/73 and Legislative Decree 141 of 2024) for the declarant

• Criminal consequences if the misclassification qualifies as smuggling

• Customs disputes and revisions initiated by customs authorities or the declarant

• Incorrect revenue collection for the State and possible consequences outside of the tax sphere (e.g., public safety, economic restrictions, health)

What is Binding Tariff Information (BTI)?

If there is doubt about the correct classification of goods, one can request a Binding Tariff Information (BTI) from the customs authorities.

BTI is an effective tool for determining the correct classification because:

• It is issued by the National Directorate of Customs in the country where the applicant is based

• It is valid across the EU (a BTI issued in Germany can be used in Italy)

• It is published on the EU BTI portal and continuously monitored

• It remains valid for three years from the date of notification, unless revoked

• It is binding on the importer/exporter (the holder must reference the BTI in every customs declaration concerning the goods covered)

• It is binding on Customs authorities, who must accept the classification unless there are legitimate reasons not to

Final Notes

It is important to know that classification rules and HS codes are frequently updated, and require careful prior review.
In conclusion, accurate customs classification can be particularly complex, making the guidance and support of professionals more important than ever.

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