Classification Systems

Accurate product classification is the foundation of compliant international trade. It ensures that goods are declared correctly to customs authorities, enabling the correct application of duties, trade measures, and import or export controls. Within the European Union, the classification of goods is based on a harmonised structure that includes the Combined Nomenclature (CN) and is further developed through systems like TARIC and Binding Tariff Information (BTI). Increasingly, businesses are also using to classification technology to streamline the process.

Combined Nomenclature (CN) Code

The Combined Nomenclature code, often referred to as the CN code, is the EU’s system for classifying goods for customs and statistical purposes. It is based on the Harmonized System (HS) developed by the World Customs Organization and includes additional EU-specific subdivisions.

A CN code is an 8-digit number that determines the customs duty rate and identifies any restrictions or measures applicable to the goods. It is used in customs declarations, Intrastat reporting, and trade statistics.

Accurate use of the CN code is essential for correct duty payment and to qualify for tariff preferences, exemptions, or prohibitions. Misclassification can lead to underpayment of duties, customs penalties, or shipment delays.

TARIC (Integrated Tariff of the EU)

TARIC, the Integrated Tariff of the European Union, builds upon the CN code by providing more detailed information on applicable EU trade measures. This includes:

  • Preferential duty rates under trade agreements
  • Anti-dumping duties
  • Tariff quotas and suspensions
  • Prohibitions and other import/export restrictions

Each TARIC code can extend to 10 digits and is used by EU customs authorities to apply all relevant measures to imported and exported goods. Importers and exporters can use the online TARIC database to identify applicable duties, VAT, licenses, and other requirements. 

Proper use of TARIC ensures businesses comply with the full scope of EU customs legislation and avoid non-compliance.

Binding Tariff Information (BTI)

Binding Tariff Information (BTI) is a written decision issued by an EU customs authority that provides the correct tariff classification of  specific goods. A BTI is legally binding throughout the EU for up to three years and offers businesses legal certainty regarding the classification of their goods.

BTIs are particularly valuable for:

  • New or technically complex products
  • Goods with classification uncertainty and disputes
  • Ensuring consistency across multiple shipments or EU member states

Applying for BTI is voluntary, but highly recommended for businesses seeking predictability in duty rates and customs treatment. All issued BTIs are published in the EU BTI database, which is searchable by keyword or CN code.

Classification Technology

As customs regulations grow more complex and goods portfolios expand, businesses are increasingly adopting classification technology to improve accuracy and efficiency.

Classification technology includes software tools that use rule-based engines, AI, or machine learning to help determine the correct CN code or TARIC code based on product descriptions, specifications, and usage.

Benefits of classification technology include:

  • Faster and more consistent classification decisions
  • Reduced human error
  • Enhanced compliance in high-volume environments
  • Integration with customs management and ERP systems

These tools are especially valuable for companies managing thousands of SKUs across multiple jurisdictions.

How ALS Can Help

At ALS Customs Services, we help clients classify their goods with precision and confidence. Our experts provide:

  • Support on combined nomenclature codes and TARIC measures
  • Support with BTI applications and decision reviews
  • Implementation guidance for classification technology
  • Training and reviews to support to reduce misclassification risks

Whether you’re unsure of your product’s CN code or managing classification across multiple markets, ALS delivers clarity and compliance.

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