Customaite Glossary

Classification

A Harmonized System code is an internationally standardised numerical system used to classify traded goods. The first six digits form the internationally harmonised classification, while countries and customs territories may add further digits for tariff and statistical purposes.

A commodity code is the tariff classification assigned to a product for customs purposes. It helps determine duties, taxes, restrictions, licences and other measures applicable to the goods

Tariff classification is the process of determining the correct commodity or tariff code for goods based on their characteristics, composition, function and other relevant information.

Customs classification is the process of categorising goods under the applicable customs tariff. Correct classification is essential because it can affect duties, documentation requirements, restrictions and other declaration data.

The Harmonized System is the international nomenclature used as the basis for classifying goods traded across borders.

An HS chapter is the two-digit level of the Harmonized System and represents a broad category of goods.

An HS heading is a four-digit classification within an HS chapter.

An HS subheading is the internationally harmonised six-digit classification level within the Harmonized System.

The Combined Nomenclature is the EU's system for classifying goods, extending the international six-digit HS classification to eight digits.

A TARIC code is part of the EU's integrated tariff system and provides additional classification detail used to determine EU customs measures applicable to imported goods.

Binding Tariff Information is an official decision by a customs authority concerning the tariff classification of specific goods.

A classification rationale records why a particular commodity code was selected, including the product characteristics and classification rules considered.

Product classification is the process of assigning products to the appropriate customs nomenclature so they can be correctly declared when traded internationally.

Customs Compliance

Customs compliance is the process of ensuring that cross-border trade activities meet applicable customs laws, regulations and reporting requirements, including correct classification, valuation, origin and declaration data.

Customs controls are checks performed by customs authorities to verify that goods and declarations comply with applicable customs requirements.

A customs audit is a review of customs transactions, declarations, records and procedures to assess whether an organisation has complied with applicable customs requirements.

Customs risk management is the systematic identification, assessment and mitigation of risks associated with customs activities, such as incorrect classification, origin, valuation or missing documentation.

Trade compliance is the broader discipline of ensuring international trade activities comply with customs, sanctions, export controls, licensing and other regulatory requirements.

Customs data quality refers to the accuracy, completeness, consistency and reliability of information used to prepare and submit customs declarations.

Customs validation is the process of checking customs data against defined rules and requirements before or during declaration processing.

Compliance by Design is an approach where compliance checks and controls are embedded directly into processes and systems rather than applied only as a final check before submission.

An audit trail is a chronological record showing what data, decisions and changes were made during a customs process, by whom or by which system, and when.

In customs automation, explainability is the ability to understand why a system produced a recommendation, classification or decision.

Customs Declarations

A customs declaration is the formal submission of information about goods entering, leaving or moving under a customs procedure. It typically contains information about the goods, parties, value, classification, origin and procedure.

An import declaration provides customs authorities with the information required to place imported goods under the appropriate customs procedure.

An export declaration provides customs authorities with information about goods being exported from a customs territory.

The declarant is the person or organisation responsible for making a customs declaration in their own name or in whose name a declaration is made.

A customs broker or agent assists businesses with customs formalities such as preparing and submitting declarations. Terminology and legal responsibilities differ between jurisdictions.

A customs procedure determines how goods are treated by customs, such as release for free circulation, export, transit, warehousing or special procedures.

Customs clearance is the process through which goods and the associated customs information are processed so they can enter, leave or move through a customs territory.

Customs data elements are the individual pieces of structured information required in a customs declaration, such as commodity code, value, origin, parties, procedure and transport information.

Supporting documents are records such as invoices, licences, certificates or transport documents used to support information declared to customs.

Origin, valuation & tariffs

Customs value is the value established for customs purposes and is used, among other things, to calculate value-based customs duties and certain taxes. International customs valuation principles are based on the WTO Customs Valuation Agreement.

Transaction value is generally the price actually paid or payable for imported goods, subject to applicable conditions and adjustments, and is commonly the primary method of customs valuation.

Country of origin identifies where goods are considered to originate under applicable origin rules. It is not necessarily the same as the country from which the goods were shipped.

Preferential origin determines whether goods qualify as originating under a trade agreement or preference scheme and may therefore benefit from reduced or zero customs duty.

Non-preferential origin determines the economic nationality of goods for customs purposes outside preferential tariff arrangements.

Rules of origin are the criteria used to determine the origin of goods. Under preferential agreements, they determine whether goods qualify for preferential tariff treatment.

Proof of origin is documentation or other permitted evidence supporting a claim about the origin of goods. The exact form depends on the applicable trade arrangement.

Customs duty is a tax that may be charged when goods cross a customs border. The amount can depend on factors including classification, customs value and origin.

A tariff measure is a requirement, duty, restriction, preference or other rule associated with a particular tariff classification and trade movement.

Automation & AI

Customs automation is the use of software to automate or assist tasks involved in preparing, validating, processing and submitting customs declarations

Customaite is a customs decleration automation. Customs declaration automation uses software to transform shipment and trade data into declaration-ready information, reducing repetitive manual work while maintaining appropriate controls and human oversight.

AI for customs refers to the use of artificial intelligence to support customs-related activities such as document processing, data extraction, classification, validation and compliance checks.

AI customs classification uses artificial intelligence to analyse product information and assist users in identifying potentially applicable tariff classifications.

Automated HS code classification uses software to analyse product information and propose or determine relevant HS classifications according to defined workflows and controls.

Customs document automation uses technology to extract, structure and validate information from invoices, packing lists and other documents used in customs processes.

Customs data extraction is the process of converting information contained in trade documents, emails or other sources into structured data that can be used in customs workflows.

Customs validation rules are automated or manual checks used to identify missing, inconsistent or potentially incorrect customs data before submission.

Human in the Loop is an automation approach in which people remain involved in reviewing, validating or correcting system-generated outputs, particularly where judgement or compliance responsibility is required.

Straight-through processing is the automated processing of transactions from intake through subsequent workflow steps with minimal manual intervention, where predefined conditions and controls are satisfied.

A customs API enables systems to exchange customs-related information programmatically, for example between ERP, customs preparation and declaration systems.

Customs software integration connects customs workflows with ERP, TMS, declaration, document management or other systems so information can move between them without repeated manual entry.

Customs & Customs Compliance Glossary

Classification

Customs Compliance

Customs Declarations

Origin, valuation & tariffs

Automation & AI

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