Every consumer product is in some way affected by imports or exports. Some products are made completely overseas and then shipped here. Others are made from parts imported from other countries. It is a big, complex world governed by things like HTS codes, Schedule B codes, and ECCNs.

You can be forgiven for not knowing what any of these things are. After all, there are companies who are regularly involved in imports and exports and still don’t know all the finer details. They have to hire a company like Vigilant Global Trade Services to help them make any sense at all. Vigilant provides worldwide import and export classification services, among other things.

With that said, let us talk about HTS codes, Schedule B codes, and ECCNs. You may forget all of this information in short order, but at least it makes for an interesting read.

1. HTS Codes

‘HTS’ is an acronym that stands for ‘Harmonized Tariff System’. It is the system by which we classify goods being imported into this country. Our system is based on the international Harmonized System (HS) implemented to control tariffs and duties around the world.

Every product imported into the U.S. is assigned an HTS code. That code consists of the international HS code plus additional digits our system includes to provide customs officials with more detail. Believe it or not, there are more than 19,000 HTS codes. Needless to say, the system is quite complex.

Importers are ultimately responsible for assigning HTS codes. They often work with product vendors, customs brokers, and foreign entities to figure it all out. But when push comes to shove, importers are the ones held accountable to regulatory compliance.

2. Schedule B Codes

It is not just importers that have to worry about product classification. Exporters do as well. They classify products according to Schedule B codes. Fortunately for them, their tasks are a lot less involved. They also do not bear ultimate responsibility for improper codes.

Schedule B codes exist so that the U.S. Census Bureau can track imports and exports. A Schedule B code is a six-digit code which is identical to the first six digits of a corresponding HTS code. The Census Bureau often converts HTS codes into Schedule B codes to keep things simple.

The law requires foreign parties agreeing to receive exported goods to assign Schedule B codes. However, they can only do so with information provided by domestic exporters. Thus, exporters work with their foreign counterparts to maintain compliance.

3. ECCNs

‘ECCN’ is an acronym that stands for ‘Export Control Classification Number’. This is generally a five-character number used to identify those products requiring a Department of Commerce export license. This implies that not all exported goods require licensing.

This is not to say that unlicensed products don’t need to be assigned proper Schedule B numbers. They do. Product classification is a matter of tariffs and duties. So all exported goods are subject to product classification. On the other hand, the ECCN system is more to prevent unlicensed organizations from exporting restricted goods.

The first alphanumeric character in an ECCN determines its category. There are ten categories numbered from 0-9. The second alphanumeric character designates product group, of which there are five. The remaining three numbers are control numbers.

And now you know the difference between HTS codes, Schedule B codes, and ECCNs. You may be the only person in your neighborhood armed with this knowledge. Next time you are at a dinner party, bring it up. Your friends will think you are the smartest person they know.