How to ace tariff classification: mastering compliance in today’s complex trade environment

Accurate tariff classification is a critical success factor in global trade compliance — yet it’s often overlooked or underestimated.

A small slip in your EU Combined Nomenclature (CN) or US Harmonized Tariff Schedule System (HTSUS) classification can lead to unexpected duties, customs delays, or even legal exposure.

At Veros, we’ve worked in and with trade teams across Europe and beyond, seeing firsthand what separates companies that nail classification from those that struggle. Here’s what experience teaches us about getting it right; and how you can set your team up for success.

1. Don’t blindly trust supplier codes, verify every time

Suppliers often include tariff codes in their paperwork, but those codes might not be accurate for your jurisdiction or how you use the product. Different countries interpret HS codes differently, and a code valid in Brazil or the US may not apply in the EU.

Expert tip: Use supplier codes as a starting point always verify against the latest tariff schedules and your product’s true use.

2. Classify by product function, not just name

Customs authorities don’t care what the product is called on the label; they classify based on what it is and does. Many misclassifications happen when teams rely on product names instead of digging into function and composition.

Expert tip: Study the General Rules of Interpretation (GRIs) and section notes to classify by essential character, not marketing language.

3. Material matters: don’t Overlook Composition and Specs

Material type, technology, and structure heavily influence classification and duty rates. A plastic part might be under one heading, metal under another.

Expert tip: Collaborate closely with engineering and procurement to get clear specs, datasheets, and bills of materials. This knowledge is key for audit defense.

4. Stay on top of updates: tariff schedules evolve

The base Harmonized System is updated every five years by the World Customs Organization, while countries update their tariff schedules at least once per year. Using outdated codes leads to costly errors.

Expert tip: Subscribe to tariff update notifications and review classification annually, especially for high-value or frequently imported items.

5. Master the General Rules of Interpretation (GRIs)

The six GRIs govern how to apply tariff codes. Misunderstanding them (especially GRIs 1, 3, and 6) is a top reason for customs disputes across Europe and globally.

Expert tip: Train your team regularly on GRIs using practical, real-world examples. Consistent application builds defensibility.

6. Centralize and standardize your classification processes

Many organizations struggle because classification is done inconsistently across departments and/or external service providers like customs brokers and consultants, with no centralized records. This leads to duplicated effort, conflicting classification codes, and weak audit trails.

Expert tip: Use a centralized system with version control and clear Standard Operating Procedures (SOPs) for classification, review, and updates.

7. Document your classification rationale

Even a correct tariff code can cause issues if you can’t explain why it was chosen. Auditors expect a defensible, traceable process, not “we've always classified it this way.”

Expert tip: Maintain clear written justifications referencing chapter notes, rulings, or Explanatory Notes.

8. Leverage customs rulings and legal precedents

Customs rulings give insight into how authorities interpret tricky classifications. Many companies miss out by relying only on internal logic.

Expert tip: Use resources like the EU’s Binding Tariff Information (BTI) system or US CROSS classification rulings to compare your products against similar rulings.

Final thoughts: structure beats guesswork

Classification errors usually come from a lack of process, not a lack of knowledge. Even a team of experts will make mistakes along the way when not supported by a fully developed process.

By building a consistent, documented, and reviewable classification process, your trade compliance team will reduce errors, defend decisions, and clear customs more smoothly across all jurisdictions.

Next Step: Build Classification Consistency with Veros

Accuracy and consistency are the backbone of compliance; and your competitive advantage.

At Veros, we combine AI-powered classification with expert customs knowledge to speed up workflows, document your classification reasoning and stay current with tariff changes across the EU, UK, US, Brazil, and beyond.

Stay tuned for our upcoming series diving deeper into each of these points, and learn how intelligent automation can transform your classification process.