Меthodology of Determination of the Commodity Code According to the UCC FEA

For avoiding a wrong classification, i.e. assigning a commodity such classification code that contracicts the commodity’s description and does not comply with the requirements of commodity nomenclature, it is necessary to take into account the fact that the commodity nomenclature consists of three components — Main Rules of Interpretation of Classification of Commodities, notices to sections and groups аnd namely the nomenclature of commodities (textual description of grouping of the commodity nomenclature: section, group, item, subitem, category and subcategory) and their numerical values — a code of a commodity Structure of a code of the UCC FEA

ХХ Two signs Group Numbering with Arabian numerals which is not connected with the numeration of a section. First two signs of a commodity code comply with the number of a group in which this commodity is classified. A group contains notices that are legally effective for the classification of a commodity. At the group level, a commodity has a detailed description that depends on a material of which it is made; on a function that it fulfills; and on to what extent the commodity has been processed. In some groups there is an additional level of classification into subgroups which are numbered with Roman numerals and are not reflected in the structure of a numbered code. For making groups, in the commodity nomenclature a principle of a sequential processing of goods is used — from raw materials to intermediate products and ready goods. Similar to the State Standard
ХХХХ Four signs Commodity item Four valued numbering in which the first two figures comply with the number of a group in which this commodity is classified. A textual description of commodity items are legally effective for the classification of commodities (it is the First Rule of the Main Rules of Interpretation). Detalisation of goods at the level of the commodity items is performed with consideration of more various and specific characteristics than at the group level. Similar to the State Standar
ХХХХ ХХ Six signs Commodity subitem The last level of detalisation of goods on which a code of a commodity and its textual description are the similar as for the State Standard. The six valued detalisation, the first four signs of which define a commodity item in which this subitems are included. Similar to the State Standar
ХХХХ ХХ ХХ Eight signs Commodity category Eight valued numbering in which the first six signs indicate a subitem number which contains this category. Detalisation complies with the Combined Nomenclature of the European Union (CN EU). Similar to the CN EU, with the first six signs similar to the State Standard
ХХХХ ХХ ХХ ХХ Ten signs Commodity subcategory Соntains description of a commodity and its ten valued commodity code The first six signs are similar to the State Standard, the seventh and the eighth figures are similar to the CN EU

An example of the UCC FEA code 8418 10 20 91

84 Nuclear reactors, boilers, machines, installations and mechanical equipment; their parts
8418 Refrigerators, freezers and other refrigerating or freezing equipment, electrical or other types; heating pumps except installations for air conditioning, the commodity item 8415:
8418 10 - combined refrigerators-freezers, with separate outside doors:
8418 10 20 -- with capacity over 340 l:
--- other
8418 10 20 91 ---- for civil aviation

A «hyphenation system» is one of the important features of the commodity nomenclature. The hyphenation system foresees indication of a certain number of hyphens before a textual nomination of the detailed groups (subpositions, categories, subcategories). The number of hyphens indicates a level of grouping. Different number of indicated hyphens shows a degree of detalisation and makes easier a search of an appropriate textual nomination of a commodity under a certain algorithm, from the lesser to a larger number of hyphens. In some groupings of commodity nomenclature there are additional levels of detalisation, for those a numerical code is not determined, they are indicated with symbols « - », « - - », « - - - » placed before the textual descriptions. If these textual descriptions are not considered but they are available, it is impossible to classify the commodity.

In the commodity nomenclature, a special system of punctuation has a certain meaning (a comma - « , », a semicolon - « ; » and a colon (two spot) « : »), and it is applied in a textual description of groupings of commodities.

The comma « , » between two parts of a textual decsription of a grouping indicates that the characteristics of a commodity placed after the comma, relates exclusively to the commodity (commodities) that is (are) named before the comma, for example:

2517 «Shingle, gravel, road metal or crushed stone, which as usual, are used as fillings for concrete or a ballast for paving operations or rail roads or other ballast, shingle and gravel, treated or untreated with heat;...»

These characteristics of the commodities «which as usual, are used as fillings for concrete or a ballast for paving operations or rail roads or other ballast» is related to the following commodities exclusively - shingle, gravel, road metal or crushed stone that are denoted before the comma which is placed before this text.

The characteristics of the commodities « treated or untreated with heat» relate only to the commodity which is named before these characteristics, namely - shingle and gravel , and these characteristics does not relate to the commodity « Shingle, gravel, road metal or crushed stone».

A semicolon « ; » indicates differentiation of commodities under various features (characteristics) that are gathered in one commodity item or subitem. I.e., any definition in the textual description of a commodity grouping of the commodity nomenclature after the semicolon cannot be applied to the commodities denoted before the semicolon. It is worth to remember that after the semicolon a new description of another commodity starts, for example:

0306 «Crustacea in shells or without shells, alive, raw, refrigerated, freezed, dried, solted or in a solt solution; crustacea with shells, boiled in water or steamed, refrigerated or unrefrigerated, freezed, dried, solted or in solt solution; a flour, powder and granules, suitable for food»

There are three commodities classified in this commodity item:

the first one - crustacea in shells or without shells, alive, raw, refrigereted, freezed, dried, solted or in solt solution;
the second - crustacea with shells, boiled in water or steamed, refrigerated or unrefrigerated, freezed, dried, solted or in solt solution;
the third one – a flour, powder and granules, suitable for food.

We draw the attention to the fact that, taking into account the rule, according to which characteristics of a commodity denoted before a semicolon can not be applied to the commodities denoted after the semicolon, and vice versa; then, crustacea without shells, boiled in water or steamed can not be classified under the commodity item 0306. This commodity should be classified under the commodity item 1605.

A colon (two spot) « : » means continuation of detalisation of the commodity grouping at the other level.

The UCC FEA is designed in the way that each commodity that is a subject of trade, can be classified in the commodity nomenclature with assigning a separate code number. With that, commodity groupings should not overlap in terms of their contents, otherwise the classification of commodities would be free and rather unreliable. As the rule, in the commodity nomenclature, at the level of items and subitems, one or several types of commodities are selected that have the greatest world trade turnover. For the other types of commodities that are classified within this commodity item, there is a generalised grouping with the textual description «others», a so called «basket» grouping. The classification of each commodity or commodity item under the UCC FEA is guaranteed in the way that at the end of each section there is a «basket» group (for example, Section І «Alive animals; ingredients of animal origin» contains group 05 «Other ingredients of animal origin, that are not mentioned in another place»), аnd at the end of this commodity group there is a «basket» commodity item (for example, group 21 «Various food products» contains commodity item 2106 «Ready products that are not mentioned in another place»).

Classification of «parts» and «accessories» is one of important aspects. These two subjects can be difined as follows:

Parts are the components of the commodity that are necessary for fulfillment of its functions, for example, a wheel of a bicycle;

Accessories extend consuming properties of commodities, for example, a ring of a bicycle.

While classificating «parts» and «accessories», the following steps should be made:

  • 1) to search the contents of the textual components of commodity items for descriptions of those parts and/or accessories as specific commodities, for instance, pipes, tubes, hoses and connections to them, made of plastic (commodity item 3917);
  • 2) to search the contents of the textual components of commodity items for the references to the both a сomplete commodity and its parts, for example, commodity item 8715 «Baby carriages and their parts»;
  • 3) to search the notices to a section or a group for the regulations that coordinate classification of «parts» and «accessories», for instance, notice 3 for group 95 «At the condition of compliance of this group with notice 1, parts and accessories, designed exclusively or mainly for using together with the commodities of this group, should be classified together with these commodities».

In the case when it is impossible to classify «parts» and «accessories» under the above mentioned points, they should be classified within a relevant «basket» grouping.

Texts of notices to sections and groups have legal effect for the classification of commodities under the UCC FEA. These notices regulate disputable situations not only between a material and a function of a commodity, when it is required to identify what is the main characteristic, a material, from which the commodity is made or its functional purpose but also the cases of different extents of processing of the commodity. Therefore, notices to a section and a group provide for an exact distribution between different commodity items and identification of their priorities for the classification of certain commodities.