HTS or HS is also known as the Harmonized System or Harmonized Tariff Schedule, developed by the World Customs Organization (WCO), which is again classified and defined as International Goods.

However, there is a slight difference between the HS and HTS codes. HS codes are usually six digit codes which is a universal standard code and then HTS codes come with seven to ten (7 to 10) digits. Codes are unique after the 6th digit, and codes after the 6th digit are generally determined by the respective countries of import. These codes are vital because they not only reveal the tariff/duty rate of the traded product, but also track records of international trade statistics prevailing in 200 countries.

The HTS code was promulgated by Congress and has been in effect since January 1, 1989, replacing the tariff schedules of the United States. HTS classification codes are a hierarchical structure to define all goods in trade for statistical, tariff and quota purposes. This structure is based entirely on the International Harmonized Commodity Description and Coding System, administered by the World Customs Organization in Brussels.

Now moving forward we will fix our eyes on the concept of ECCN classification. The Export Control Classification Number is abbreviated as ECCN, which has five-character alphanumeric designations used on the Trade Control List (CCL) to decide on dual-use items for export control purposes. ECCN differentiates the elements based on the nature of the product, such as the type of product, software and technology and its respective criteria.

Each product, technology and software is subject to the Bureau of Industry and Security (BIS) license included in the Trade Control List found in Supplement 1 to Part 774 of the Export Administration Regulations.

ECCN is completely different from a Schedule B number, which is used by the Census Bureau to collect business statistics. It is also very different from the Harmonized Tariff System (HTS) Nomenclature that is generally used to determine import duties. ECCNs provide different levels of control depending on the country of end use, the end user themselves, and the end user of the item.

Now moving a bit further, we move towards ITAR compliance which is known as the International Traffic in Arms Regulations which controls the export and import of defense related services and articles on the United States Munitions List (USML). According to the US government, all manufacturers, brokers, and exporters of defense or technical data-related items and services are required to comply with ITAR. Therefore, there is a constant demand for your supply chain to also be ITAR compliant in order for the process to run smoothly.

The government has severe charges for companies that do not meet ITAR requirements with civil charges that skyrocket up to $500,000 per violation and criminal fines of $1,000,000 and 10 years in prison.

So, at the end of the day, it is seen that a company doing business in a respective field must know and handle all business regulation compliances properly in order to run smoothly and avoid penalties that would ruin their hard work.