Various HS classification tools have emerged, and there are attempts to automate HS classification using technologies such as AI.

Currently, as international organizations and countries are advancing AI-based HS classification technologies, and many trading practitioners, desiring to be relieved from the struggles of HS classification, are hoping for AI-based solutions.
Therefore, it is expected that AI-driven HS classification will become widely adopted in the future.

However, I believe that to automate HS classification with technologies like AI, it is necessary to resolve the unique paradoxes inherent in the HS system.

Below, I present an example illustrating the challenges and paradoxes AI may encounter in HS classification.

Interpretations that vary by country or officer

Ice scrapers

US customs(CBP) classifies Ice scrapers as Parts and accessories of the motor vehicle in 8708.99(CROSS:NY G88216). On the other hand, the EU classifies Ice scrapers as “Articles of plastics” in 3926.90(BTI:DEBTI48996/22-1)

Step stools case

①German customs(EU) classified it in 9403.70 as “Furniture”
➁U.S. customs(CBP) classified it in 3924.90 as “Household articles of plastics”CBP’s interpretation is that stool is the kind of “Ladder” but German customs did not think so.

Wheels

HS classification for general-purpose wheels can vary by country.
This example involves a wheel composed of an iron mounting and plastic wheels, which, if not classified as a caster,
is interpreted according to GRI 3(b) to determine its essential character.

Depending on the country, interpretations may differ on whether the mounting or the wheels constitute the essential character,
so caution is needed when classifying such items.

At first glance, the classification of wheels may seem simple and straightforward, but it can be surprisingly complex.
Similarly, for other items that may seem easy to classify at first, there can be a wide range of opinions,
leading to potential pitfalls if one relies too heavily on automatic classification tools.

When it comes to automatic HS classification tools or AI, there might be an intention to automate the classification of products deemed “simple” to classify.
However, determining whether a classification is “simple” is something that only human experts may understand.

7326:
EU:DEBTI40177/21-1 and https://lnkd.in/g94mMBmf
Türkiye:TR160000210032

3926:
Korea:품목분류3과-6422
U.S:NY 859395

Bluetooth earphones case

Both items are nearly identical as they are Bluetooth earphones, yet they have different HS codes. Listed below are the features they have in common:

1. They are Bluetooth earphones.
2. They can answer and end calls.
3. They have a microphone and other similar functions.

①Bluetooth hands-free device
8517.62(DEBTI11598/24-1,Germany)

➁Bluetooth earphones
8518.30(DEBTI11598/24-1,Germany)

However, WCO opinion classified Bluetooth earphones in 8518.30 in “Amendments to the Compendium of Classification Opinions – HS Committee 73rd Session 8518.30-1,” (with a built-in microphone, designed to pair with a host device, put up in a set for retail sale with a charging case, charging cable, and instruction manual. The earphones have functions to control audio file playback and to direct the host device to answer, reject, or hang-up calls.) are classified under 8518.30.(Application of GIRs 1 (Note 3 to Section XVI), 3 (b) and 6.)

Therefore, when clearing customs for Bluetooth earphones in the future, this WCO opinion might serve as an important guideline for classification decisions.

Interpretation of GRI1

Castors case

The HS code for casters changes depending on their size.
When considering the HS code for iron casters, one might consider
“Other articles of iron or steel” under 7326.90, but due to the size specifications outlined in Note 2 of Chapter 83, it is necessary to classify the casters by size, even for the same product.

It might be difficult to arrive at this regulation for those considering classifying iron casters under 7326.90, as they might not readily think to refer to Note 2 of Chapter 83.

Hourglass case

Images from EUBTI and Christies

Normally, an hourglass is classified based on the material of its chamber; for instance, if the chamber is made of glass, it falls under HS code 7013.99, while a plastic chamber would place it under 3926.90.

However, there’s an intriguing case regarding an expensive hourglass containing diamond sand.
According to the U.S. Customs (CBP) ruling (NY E89454), this particular item was classified differently from a standard hourglass.
Recognizing the diamond as the essential character, it was classified under 7116.20 as precious stones.

In this case Note1 to Chapter 71 is applied

In this case, if AI classify based on the material of the chamber solely because it is a sandglass, AI might overlook the description in Note 1 to Chapter 71 and mistakenly apply HS classification based on the material of the chamber using GRI 3 instead of the appropriate classification under GRI 1.
It is necessary to broadly refer to legal notes depending on the situation.

The Impact of Import Customs’ Subjective Views

Instant noodles case

①1902.30(DE10285/15-1,DEBTI35290/22-1)
The character is determined by the noodles, as these make up the largest part of the product.
GRI3b

➁2104.10(DE13146/10-1,DEBTI45845/19-1)
Assortment of goods for which headings 1902 and 2104 come into consideration.
Preparation for making a broth/soup imparts the essential character.
GRI3b

It seems that whether the noodles or the soup of Cup Noodles is considered the essential character depends on the subjective judgment of the importing country’s inspectors.

Electronic Piano case

It is up to the local customs officer whether it’s a toy or not

Wooden table

The table top is made of solid wood and the legs are made of metal.

Item① is classified in 9403.20 – Other metal furniture(DEBTI11594-19-1)
Item② is classified in 9403.60 – Other wooden furniture(DEBTI29850-18-1)

According to DEBTI11598-19-1 Item① is classified as “metal furniture” because

The material character of the product is determined by its importance for use as

a stability-imparting element by the metal. (GRI3b)

According to DEBTI29850-18-1 Item② is classified as “wooden furniture” because

the physical character of the goods can not be determined by the metal frame,
which is considered a stability-conferring element, nor by the wooden table top,
which has the highest value (in a ratio of 90 to 100% by weight) ,

Thus, the product is to be classified under the latter subheading.(GRI3c)

Cotton swab

They look similar but are classified differently depending on material or usage.

Polyurethane jacket case

They look very similar and they are made of Polyurethane but classified differently.

What matters is whether the fabric is classified in Heading 5903 “Textile fabrics impregnated, coated, covered or laminated with plastics” or not.

It seems both items fulfill the condition but according to note 2(a)(5) to CH 59, they are classified differently.

Exclution list” Note 2(a)(5) to CH 59

Plates, sheets or strip of cellular plastics, combined with textile fabric.
The tissue is dense, colored, sanded and thicker than the cell plastic film

where the textile fabric is present merely for reinforcing purposes (Chapter 39)

① is made of a fabric of heading “5903” because the textile layer is not only mare support. Therefore it goes to 6210.50.

➁ is not made of a fabric of heading “5903”, because the textile layer is a mere support without advanced work. Therefore it goes to 3926.20

It’s challenging to judge if the layer is a mere support or not by item description, picture, or actual item.

Cat tree case

①Wood and textile fabric 4421.90 (DE2458-11-1,Aug. 8, 2011)
In this case, Wood is considered an essential character.
note 3 to 44.CBP(U.S customs) also has the same decision

➁Wood and plaiting materials 4602.19 (DEBTI26816-17-1,Nov. 27, 2017)
On the contrary of① scratching post is considered an essential character. (plaiting of plant-based materials) Note 1 to chapter 46

③Wood and knitted fabrics 5609.00 (DEBTI25148-17-1,Feb. 6, 2018)
The scratching post is made of ropes and is considered an essential character.
note 2a) to 63, 7f) to XI,8a) to XI

④Wood and textile materials 6307.90 (DE8144-15-1,April 1, 2015)
The scratching post is made of textile(heading 5802) and is considered an essential character.
note1 to 63, 7f) to XI, 8a) to XI
EU Regulation (3 April 2014)has the same opinion https://lnkd.in/gggCB-ZN
But still many Cat trees are classified based on material.

⑤Cushions 9404.90(NLBTI2019-0069,April 24, 2019)
A top side and a frame of wood, on the inside provided with a removable,
padded foam cushion with a textile cover with an imitation sheepskin on top;
The whole consists of different goods and derives the essential character from the textile. The last posted item is that of cushions.

① considered wood as an essential but ➁③④considered scratching post as an essential.
➁③ classified the item based on textile material but ④ classified it as made-up articles.
⑤ is classified based on GRI3C

Examples of the Cat tree show us several patterns of classification when it comes to applying GRI 3b)and 3c)

Contact lenses case

It appears that there are multiple methods for classifying “Fantasy colored contact lenses without optical correction function”.

■ EUBTI classified “Fantasy lenses” in 9505.90 as “entertainment articles” (DEBTI38979/22-1,DE18231/16-1).

■ US Customs (CBP) classified “Fantasy lenses” in 9001.30 as “Contact lenses” (NY J83159).

The HS classification and interpretation of “Fantasy colored contact lenses” can vary significantly among countries and examiners.

Cannot be determined by product name

Smartphone holder

Even for items named ‘Smartphone holder,’ the functions vary, and these functions change the HS classification.

Electrical display case

They look similar but are classified differently.

①Indicator panels 8531.20 (PLPL-WIT-2012-00001)
Indicator panels with LEDs, equipped with a control unit.
The signal containing the display information is transmitted from the computer.
GRI1

➁illuminated sign 9405.61 (DE5160/11-1)
The LEDs are the letters “BAR” and the outline of a horizontal bottle filled a glass,
the lamps in the bottle (the liquid representing) light fluently.
GRI1

③Xmas illuminated decoration article 9505.10(DEBTI11639-19-1)
The product consists of cut-to-size corrugated cardboard, some of which is coated with silver,
that reproduces the word “XMAS”
GRI1

Bath unit case

When the bath unit is equipped with massage jets,
it might be classified as massage apparatus in 9019.10.

Both bath units are made of acrylic.
①is classified as a plastic article in 3922.10 but ② is classified as massage apparatus.
Please refer to Classification opinion (9019.10 1.)

Lanterns case

They are both called ‘lanterns’ but are classified under different headings.
Item ① is classified as lighting fittings under heading 9405.
However, Item ② is not classified as Item ① because it does not serve to illuminate the environment,
therefore, it is not considered a non-electrical lamp or lighting fitting under heading 9405. (DE5315/13-1)
This is a good example of items with the same name being classified differently.

The reason for not classifying ② under heading 9405 is stated as “not serving the purpose of illumination indoor decoration.”
Even if the item emits light, determining whether it qualifies as illumination is a challenging distinction to make.

EN to 9405 exclusion
(c) Signs, name plates and the like, not illuminated or illuminated by a light source not permanently fixed, (heading 39.26, Chapter 70, heading 83.10, etc.).

Sticker case

These products are related to stickers, but their HS codes differ depending on the material and structure.
① is a plastic sticker.
② is a paper sticker.
③ is called a decalcomania, which differs from ① and ② in its method.
It involves moistening the printed paper and applying it to surfaces such as glass, ceramics, wood, metal, stone, or paper, then lightly pressing to transfer the printed image onto these surfaces.
④ it is categorized as ornamental articles.
⑤ it is similar to item ④, but the item description states “These stickers can be placed anywhere on the cardboard card, removed, and repositioned to recreate various scenes. For example, by layering the stickers, you can change the clothes on the girl figures. This product is designed for children to play
⑥ The sticker includes a magnetic barcode and functions as a sticker, but its essential character is the magnet, so it has been classified under 8505.

Due to their similar appearance, it is important to understand the details of their material, structure, and use to classify them correctly. and structure and use them

Based on the manufacturing process

Potato chips

“Potato chips made of potato slice” is classified in 2005.20
“Potato chips made of potato powder, flakes, starch” is in 1905.90

Their appearance is similar but manufacturing process change the HS code.

Shoelace case

There are two types of shoelaces here, but depending on the manufacturing process, they can be classified into completely different HS codes,

The shoelace manufactured with a ‘Round braid’ on the left side of the image is classified under 5609.00,
while the shoelace manufactured with a ‘Flat braid’ on the right side of the image is classified under 6307.90.
The reason for classification under 6307 is described as follows: ‘not a product of heading 5609 due to the processed products

Whether it is a Round braid or a Flat braid, there’s no doubt that they are both manufactured shoelaces, but the fact that they are classified into completely different Headings based on their manufacturing process makes it very confusing and a stringent classification.

Velcro case

Those are two kinds of Velcro. The difference between them is whether it’s a Made up article or not.
The definition of “Made up articles” is stated in Note 7 to Section XI

Warning sign case

These items have several common points but are classified under different HS codes.

• 1. They are made of plastic.
• 2. They serve as signs to convey dangers to humans.
• 3. They are placed on the ground to be easily seen by road users.

Despite these commonalities, item ①DEBTI3013/23-1 is classified under HS code 3926.90 based on its primary material, plastic. In contrast, item ②DEBTI28270/21-1 is classified under HS code 4911.99 as printed matter, due to the illustrations and text printed on the plastic surface.

This is an interesting example of how simple printing can influence classification.
Regarding HS code 4911.99, there are many highly interesting classification cases,
so I would like to delve deeper into this and introduce them again.

Here is the method of how I image search for HS classification.
https://customslegaloffice.com/landing/imagesearch/
Using this method can help you classify HS codes smoothly and serve as a valuable source of case studies for your customers.
It can also be a great way to disseminate useful information on web media and attract attention from many trade practitioners because many face common problems with HS classification.

Based on the where to be used

Coffee makers case

The classification of these three types of coffee makers varies depending on the place of use, even though their purpose is the same.

Even for the same coffee maker, if the usage location differs—Domestic, Commercial, Vending Machine—the HS classification also differs.

Wheels

In cases where Wheels are designated for a specific use, their HS classification may be categorized as parts of their principal commodities. This example introduces instances where wheels, although being wheels are classified as parts of various products.

Before determining that the item in question is a general-purpose wheel, it is crucial to thoroughly check what the wheels will ultimately be used for, as failing to do so may lead to errors in HS classification.

Furthermore, under the rules of origin’s CTC (Change in Tariff Classification) rule in FTAs (Free Trade Agreements), if an item considered to be of general use is determined to be a part of a specific product, it could be disadvantageous in the determination of origin, which is another point that requires attention.

LED lights

Both products are LED lights, yet they are classified under different HS codes due to their different uses.

①General LED Light(DEBTI39401/19-1-1,invalidated)
A general LED light used for ordinary lighting purposes is classified as a standard lighting fixture classified in 8513.10 as Lamps.

➁Photographic Flashlight(DE5243/16-1-1,invalidated)
On the other hand, a photographic flashlight, which can be connected to a smartphone and used in conjunction with the camera function to make subjects in photographs appear more attractive, is classified under the more specialized subheading 9006.69.

EN to 8513 state below

The heading excludes :
(a) Photographic flash-light apparatus (heading 90.06).

As seen in this example, accurately classifying HS codes requires a deeper investigation into the product’s final use and function, not just its appearance or superficial use. This case, based on an old ruling, highlights the importance of understanding the specific purpose behind a product’s use.

Cup and Notebook

Classifying this boxed set product under a single HS code is not allowed.
Instead, it needs to be divided, with each item assigned a different HS code and declared as individual items.
This is necessary even if the items are packed in the same box and delivered directly to the consumer.

Two-part set, consisting of crockery (cup) and a notebook, so-called gift set cup and notebook, packed in a cardboard box for retail sale, the goods are neither intended to satisfy a specific need nor to carry out a specific activity and therefore do not constitute a set of goods within the meaning of AV 3(b).

To see a rationale for the rule of 3(b), please see “General Rules for the Interpretation of the Harmonized System“:

RULE 3 has Explanatory Notes; see RULE 3(b)(X)(b) which states that…
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity;

6911.10(DEBTI46373/21-1)
4820.10(DEBTI46373/21-2)

New products and combining multiple functions

3D printer

Image from WCO

3D printers used to be classified under several Headings, but with HS2022, they have been newly classified under heading 8485 (according to note 10 to chapter 84), and are now classified in 8485.

This case is a good example of how the introduction of a newly developed product can lead to many different interpretations, causing considerable confusion until the WCO (World Customs Organization) revises the HS classification.

Not limited to 3D printers, the continuous emergence of new products and products combining multiple functions presents a challenging issue in maintaining uniformity in classification worldwide.

Smart watch

① Smartwatch with Telephone and Health Monitoring Functions, 8517.62 (PLBTIWIT-2019-001325)
This smartwatch, featuring a telephone, camera, music player, pedometer, blood pressure and heart rate monitors, calorie counter, sleep tracker, and Anti-Lost function, is classified under subheading 8517.62, as per Classification Opinions 8517 62/22 to 8517 62/24. Notably, similar devices like the AppleWatch are also classified in this category by the CBP (Cross HQ H260060), emphasizing its primary function as a communication device.

➁ Hybrid Wristwatch with Communication and Health Tracking, 9102.12 (ESBTIESBTI2022SOL332)
Differing from ①, this device is not categorized as a Transmission apparatus. It includes communication, radio navigation, pedometer, heart rate monitoring, and timekeeping functionalities. However, lacking capabilities for phone calls, emails, SMS messaging via voice commands, it doesn’t align with the Classification Opinions 8517 62/21 to 8517 62/24 but Classification Opinions 9102.12/1 wco classified running watch in 9102.12.
It seems that there is no clear criterion for the difference between 8517 and 9102 according to Classification Opinions.. Spain customs, recognizing its multifunctional nature, classified it under various headings (8517, 8526, 9029, 9031, 9102) using GRI 3c, ultimately categorizing it as a Wristwatch in 9102.12.

③ Advanced Measuring Instrument with GPS and Connectivity, 9031.80 (PLBTIWIT-2018-000664)
Equipped with GPS, step counting, distance tracking, heart rate, calorie monitoring, sleep analysis, Bluetooth for call and message notifications, and internal music storage, Poland customs determined its principal function as measurement. Therefore, it’s classified as a Measuring instrument in 9031.80.

Classifying modern watches requires a thorough understanding of each function and the application of relevant General Rules of Interpretation (GRIs). The complexity increases as these devices integrate more functionalities beyond traditional timekeeping.

Solar panels case

① is classified in 8541.43 as Photovoltaic cells by ITBTIIT922104-2022-BTI0264

➁ is classified in 8501.71 as a photovoltaic DC generator by CZBTI48/149242/2023-580000-04/01

Item ① is just an ordinary solar panel designed to turn sunlight into electricity.
On the other hand, item ② has two USB charging ports.
This means that Item ② not only converts sunlight into direct current but also supplies power suitable for specific devices or systems (e.g., charging devices through USB ports).

Although both items are primarily designed to convert sunlight into electricity, the additional functionality of adapting the current for use with other devices leads to their classification under entirely different headings.

This is a fascinating example of how seemingly similar products can be classified differently based on their specific functions.
When classifying solar panels, it is important to understand how the energy obtained from sunlight is utilized.

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EN to 8541 (B)(2)(i)
The heading also covers solar cells, whether or not assembled in modules or made up into panels.
However the heading does not cover panels or modules equipped with elements, however simple,
(for example, diodes to control the direction of the current),which supply the power directly to, for example, a motor, an electrolyser (heading 85.01).

The Dynamics of Interpretation in the Flow of Time

Walking Poles case

In Germany, a notable shift occurred in the classification of these poles. Initially, on September 13, 2005, a Binding Tariff Information (BTI) ruling (DEF-3485-05-1) categorized them under code 6602 as walking sticks.

However, this perspective evolved, and by June 28, 2021, a subsequent BTI ruling (DEBTI46089/22-1) reclassified them under code 9506, recognizing them as equipment for physical training.

Conversely, the United States has exhibited an opposite trend in classification. On May 8, 2007, a CROSS ruling (N010380) aligned with Germany’s later stance, placing “Nordic Walking Poles” under code 9506 as physical training equipment.

Yet, in a reversal on October 5, 2020, they were reclassified under code 6602 as walking sticks.H262581

This divergence highlights a fascinating aspect: both the EU and the US have altered their interpretations of “Nordic Walking Poles” over time but in opposite directions. This evolving understanding reflects the dynamic nature of international trade classification and the complexity involved in categorizing such multifunctional items.