Classification of goods according to the Commodity Nomenclature of foreign economic Activity of the Eurasian Economic Union (hereinafter referred to as the EAEU Customs Code)

The classification of goods according to the Commodity Nomenclature of foreign economic activity is one of the most pressing issues for participants in foreign economic activity. The correct classification of goods according to HS is of great economic and legal importance. Firstly, the rate of import/export customs duties and, accordingly, the amount of customs duties paid, the application of non-tariff measures, prohibitions and restrictions to goods and vehicles depends on which classification code of the EAEU HS code the goods will be assigned to. Secondly, the assignment of goods to one or another classification code of the EAEU Customs Code of Foreign Economic Activity often requires special technical knowledge and additional expertise related to determining the technical characteristics of goods, methods of its production, etc. The accuracy of the classification of goods is also of great importance for improving the objectivity of customs statistics on foreign trade, used in developing the customs policy of the member States of the Eurasian Economic Union and taking concrete measures to implement it in the process of customs clearance and control of goods and vehicles. The Russian legal literature expresses the opinion that "neither customs officials nor declarants can make legally correct decisions regarding the classification of goods under the HS Code without appropriate scientifically based recommendations on the classification of goods."

Classification of goods according to the Commodity Nomenclature of foreign economic Activity of the Eurasian Economic Union (hereinafter referred to as the EAEU Customs Code)

According to Russian scientists, "the peculiarity of such a classification is that it has a legal rather than a commodity value, which is often not taken into account by both customs officials and judges considering disputes between declarants and customs authorities." In accordance with Article 51 of the TC CU, the Commodity Nomenclature of foreign economic Activity is based on the Harmonized Commodity Description and Coding System of the World Customs Organization. The Harmonized Commodity Description and Coding System (HS) is an international multipurpose classification system administered by the World Customs Organization, intended for use by countries in developing customs tariffs and statistical accounting of foreign trade operations, organizing freight forwarding operations, etc. HS consists of a nomenclature containing commodity items, subheadings and related items. numerical codes, notes to sections, groups and subheadings, as well as basic classification rules for interpretation of HS. The first six characters of the HS nomenclature code are used universally in any HS (national or interstate) without changes. The structure of international commodity flows is constantly changing, which makes it necessary to periodically update the HS nomenclature. The World Customs Organization approves a new version of the HS nomenclature every five years. By Law No. 525-II of February 3, 2004, the Republic of Kazakhstan joined the International Convention on the Harmonized Commodity Description and Coding System (Brussels, June 14, 1983). The Eurasian Economic Union has a Unified Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union, approved by the decision of the EEC Council dated July 16, 2012 No. 54. The Unified Customs Tariff of the Eurasian Economic Union (EAEU CCT) is a set of import customs duty rates applied to goods imported into the customs territory of the Eurasian Economic Union from third countries. In connection with the entry into force of the 6th edition of the Harmonized Commodity Description and Coding System (some codes have changed), the decision of the EEC Council dated October 18, 2016 No. 101 approved a new edition of the Customs Code of the EAEU and the EAEU ETT, which entered into force on January 1, 2017. HS is a classifier that is used for state regulation of the export and import of goods, that is, a systematic list of goods, including the names of goods, their code designation, units of measurement of the quantity of goods, as well as notes and rules of interpretation.

In order to ensure uniformity of interpretation of the Customs Code of Foreign Economic Activity, based on proposals from the customs authorities, the EEC adopts and publishes decisions and clarifications on the classification of certain types of goods (paragraph 7 of Article 52 of the TC CU). The integral structural elements of the EAEU Customs Code of Foreign Economic Activity, which have the same legal force, are: - Basic rules of interpretation of the HS (hereinafter referred to as the OPI); - Classification part (Commodity nomenclature – a list of names of goods with 10-digit numeric codes); - Notes to sections, groups, items, subheadings, subheadings, as well as additional notes (contain instructions on the assignment of the product to this level of detail or exclusion from it). The EAEU Customs Code of Foreign Economic Activity clearly adheres to the principle of unambiguous entry of goods into classification groupings. That is, each product has its own ten-digit code designation. The first two digits indicate the product group, the first four indicate the product position, the first six indicate the subheading, and all ten indicate the subheading. There are "basket" items or "other" items for unnamed, not particularly highlighted products. The description of the goods in column 31 of the goods declaration must be complete in accordance with the requirements of the Customs Code of Foreign Economic Activity, indicating the mandatory and additional characteristics (if provided for by the customs legislation of the EAEU) and correspond to the product code under the Customs Code of the EAEU in column 33 of the DT. The classification part of the nomenclature contains information about the units of measurement of the product, the main of which is the kilogram, the rest are called additional. Note – text material preceding the classification part of the Customs Code of Foreign Economic Activity and clarifying the meanings of each classification grouping (sets of goods having common characteristics named in the Customs Code of the EAEU) The classification grouping includes sections, groups, commodity items, subheadings and subheadings. All notes are legally binding, as is the EAEU Customs Code itself. The functions of the notes are: - exclude goods from classification groupings; - include goods in the classification grouping; - define the meaning of terms in order to prevent overloading of the texts of commodity items; - they explain the concepts, because the interpretations of certain words and terms available in the HS are not mandatory, they correspond to their generally accepted concept, and the existing GOST standards are not always applicable in the nomenclature.; - they recommend coding certain products in a certain way.

The notes apply only to the classification grouping above which they are located, with the exception of those where it says that they apply to the entire HS TEAE. If there is no such remark, then this note should not be extended to the entire nomenclature, but should be limited to just a section or group. Thus, for accurate classification, it is necessary to know well the device and purpose of the product, the principle of operation, the material from which it is made, sometimes you also need to know the manufacturing technology of the product, the highly professional terms that characterize many products in the descriptions of product items. For the purposes of unambiguous classification of goods in the Customs Code and in the Customs Code of the EAEU, based on it, the classification uses the OPI. The procedure for the application of OPI is defined in Section 3 of the Regulation on the Procedure for the Application of the Unified Commodity Nomenclature of Foreign Economic Activity of the Customs Union in the Classification of Goods, approved by CCC Decision No. 522 of January 28, 2011 (as amended by CCC Decision No. 767 of August 6, 2011, hereinafter referred to as the Regulation on the Procedure for the Application of HS).  According to paragraph 5 of the said Provision, OPIS are designed to ensure that a specific product is unambiguously assigned to a specific classification grouping, coded at the required level. OPIS are applied uniformly and consistently in the classification of any goods.: OPI 1 is applied first; OPI 2 is applied if it is impossible to classify goods in accordance with OPI 1; OPI 3 is applied if it is impossible to classify goods in accordance with OPI 1 or OPI 2; OPI 4 is applied if it is impossible to classify goods in accordance with OPI 1, OPI 2 or OPI 3; OPI 5 It is applied if necessary after the application of another OPI; OPI 6 is applied if it is necessary to determine the code of a subheading/ subheading (paragraph 6 of the Regulation on the Procedure for the Application of HS). Thus, the OPI is a kind of algorithm for classifying goods. The six rules of the OPI provide for the inclusion of a specific product in a specific heading, and then in the corresponding subheading and further in the subheading. Failure to comply with this algorithm may lead participants in foreign economic activity to make mistakes when declaring imported and exported goods. The OPI formulates the main principles of the classification of goods, where the first five rules are intended to establish the position, and the last (sixth) – to determine the subheading and subheading. 

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