Improve Revenue with Improved HS Code Accuracy
by on Jul.25, 2010, under Internet
Sifting the volumes of harmonized codes is labor intensive, often requiring more than one knowledgeable individual to research and validate the correct category and code. Validation of HS codes is required for accurate trade compliance for products that are exported or imported. So why do so many commercial agencies avoid automating such lookups when robust software systems can match the appropriate code with the product description?
According to the World Customs Organization, governments and businesses face escalating problems due to ongoing fraudulent conduct by commercial entities, which continues to erode revenue. As commercial enterprises attempt to misrepresent products as part of the international trade consortium, governments and businesses that accept inaccurate or faulty identification cannot adequately identify goods entering or leaving customs.
Most human inspections rely on a few simple inspection techniques when evaluating HS codes as a product enters customs. The inspector must evaluate the product description and then compare the code against the list of potential codes, possibly guessing if the two match. There is no statistical comparison to evaluate how many times parts of the description occur as part of a code and then recommend a potential match.
A harmonized code search compares not only words, but also phrases and categories, adding inclusion and exclusion as part of the matching process. Such comparisons are nearly impossible for humans to do in a short period of time, assuming the data is available at the customs office to perform the analysis.
An automated HS code analysis engine compares a high number of point comparisons in a matter of seconds and presents all possible solutions to the inspector or individual. Such quick analysis not only eases the customs process, it also reduces the potential for fraud, due to the accuracy of the code and description-matching functions. The revenue potential also improves with increased accuracy, as products intentionally mislabeled do not get a free pass.
