About Customs rules and standards

Who are the WCO Customs rules meant for?

The World Customs Organization’s Customs standards and procedures apply across a huge value chain and a wide range of stakeholders in international trade:

• goods manufacturers and industrial producers, to help them to define their import needs and assess their export trade capacities;

• wholesalers, importers and exporters;

• Customs brokers, experts in Customs formalities;

• specialist legal advisers;

• international carriers and logisticians;

• intergovernmental and international organizations, on the basis of trade agreements and arrangements;

• States and their administrations responsible for supervising trade in goods, compliance with the rules, Customs formalities and recovery of Customs duties;

• training bodies in this sector.

What are the customs "standards"? 

Customs “Standards” (HS, Origin and Valuation) are essential components of the trading system and are used by Customs around the world. The WCO, as the only international organization bringing together national Customs administrations, plays a major role in setting these customs standards and in ensuring common interpretation thereof.

What is the HS, the Harmonized System? 

The Harmonized Commodity Description and Coding System, generally referred to as the "Harmonized System" or simply the "HS", is a multipurpose international product nomenclature developed by the WCO, in the early 1970’s, to classify traded products. Since then, the HS has become the universal economic language essential to the fluidity of international trade. Used by more than 200 countries the system enables the classification of over 98% of merchandise in international trade.

The HS is made up of information at multiple levels. It comprises 21 Sections, which are subdivided into 97 Chapters. These are further split into approximately 1,300 headings and over 5,000 subheadings, classifying more than 5000 group of commodities. Each subheading is identified by a six-digit code, arranged in a legal and logical structure, and is supported by well-defined rules to achieve uniform classification. This structure, called the Nomenclature, is freely accessible on the WCO’s platform. Every five years, a new version of the Nomenclature is published, featuring new commodities. The last edition was issued in 2017 and the next one is planned for 2022.

What is Origin ? 

The WCO defines rules of origin as "the specific provisions applied by a country to determine the origin of goods and using principles established by national legislation or international agreements." (Revised Kyoto Convention). In parallel with customs classification and assessment, country of origin determination is an essential element in determining the amounts of customs duties and taxes.

There is no international definition of origin, although a distinction is made between two systems: preferential and non-preferential. In the case of preferential Origin, everything is based on bilateral or multilateral agreements (free-trade agreements (FTAs), Customs unions, free-trade areas, etc.) or unilateral non-reciprocal preferential arrangements (GSP, etc.). In the case of non-preferential Origin, each country applies its own rules, even if they can be harmonized within some regional economic unions.

What is Valuation ?

Determining the customs value of imported goods is essential to the application and calculation of customs tariffs. All customs administrations of the current WTO Members value imported goods in accordance with the provisions of the WTO Customs Assessment Agreement (including the former GATT Article VII and Tokyo Round Valuation Code), adopted in 1994. The Agreement essentially bases the customs value on the transaction value of imported goods, i.e., the price paid or payable for imported goods, if any, after certain costs and fees adjustments. 90% of trade is valued on the basis of the transaction value method. The Agreement is intended to provide a single, fair, uniform and neutral customs valuation system for imported goods.