Schedule B, HTS, ECCN, NAICS, SIC - How many numbers do I really need to know??

Schedule B

Schedule B is a 10-digit number used by the Bureau of Census to collect trade data. The first 6 digits of your schedule B number are identical to the first 6 digits of the HTS code used for importing your product into the US. You need to have your schedule B number on all of your export documents.

In April, 2018, you can use: https://uscensus.prod.3ceonline.com/ to help determine your schedule B number (and interestingly enough, the first 6 digits of you HTS code should you want to know that).

Harmonized Tariff Schedule (HTS)

 The Harmonized Tariff Schedule number is a 10-digit number used by customs to determine any tariffs when you import this product into the US. The first 6 digits of the HTS are identical to the first 6 digits of the products schedule B number and determine how the product is classified, but the last 4 digits vary specify the actual tariff associated with this product (unless there are Trade Agreements that reduce or remove the tariff). You need to have the HTS code clearly on all documents used for importing this product into the US.

Export Control Classification Number (ECCN)

Export Control Classification Numbers are five character alpha-numeric designations used by the Department of Commerce on the Commerce Control List (CCL) to identify dual-use items for export control purposes. An ECCN categorizes items based on the nature of the product, i.e. type of commodity, software, or technology and its respective technical parameters. You need to know your ECCN, even if it only to show that your product can ship under an ECCN of EAR99.

NAICS and SIC

The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. Lots of US marketing data will require the NAICS code to extract information.

Standard Industrial Classification (SIC) System numbers are used by the US Department of Labor and Occupational Safety and Health Administration to classify the type of business and sometimes was used instead of the NAICS, but unfortunately there is no real correlation between the two systems. Some marketing data is searched by SIC code.

About 95% of the world's population, and therefore customers, live outside the United States, so businesses wanting to grow beyond just their local neighborhood market should seriously consider getting involved in International Trade. And even many businesses who don't want to go too far from home could become involved in International Trade because it involves among other things Importing and Exporting products or services and you can make your business as big as you can dream.

Another interesting factor is that people around the world often consider U.S. products and services to be the Gold Standard of innovation, quality and safety, and because "the rising tide lifts all boats", your American products and services are likely to have an initial advantage, and you could reap enormous benefits from the global market.

In a recent book entitled The World Is Flat, Thomas L. Friedman told us that the playing field has been significantly leveled - to the point that he saw the world as flat. In this section we look at what you should be considering and doing in terms of importing and exporting to reach the rest of the world.

Businesses in general do not need a special license to import products, but in some cases many require a license, permit or other registration to possess, transport or sell the product in the United States, in their particular state or in a local jurisdiction.

This section covers how to import products into the United States.

eCommerce is Great! -- Global eCommerce sometimes won't work

Sure, we have all seen how great Amzaon, Alibaba and other eCommerce giants are doing. Lots of small businesses are leveraging them to get their own products sold and delivered around the world. Amazon even has set up operations with warehousing within their different regions to give local, fast, efficient sales, delivery and service.

But eCommerce, as most people envision it, doesn't work with anything that requires an export license and has the additional burden that you legally need to know not just what you sell, but where you sell it, to whom you sell it and what the end user will use if for, BEFORE you transact the sell (more on this in a moment)

I am not crazy - check the shipping documents for DHL, FedEX, and all the rest of the 3rd party shippers and you will probably see an innocuous little check box for you to affirm that the shipment is NLR (No License Required). That means they want you to tell them that no export license is needed. That is important because an export license, if it is granted, can take several weeks to obtain and no shipper is going to hold your product for several weeks waiting for an uncertain license and most customers don't think of eCommerce as taking several weeks to ship (eCommerce being instant gratification after all).

Back to that silly list of things you legally need to know.... It's true in general, but especially true of US exports, that you cannot sell things to the bad guys or bad things to companies or people you haven't checked out. In the US part of that checking out could include an export license and certainly includes some due ciligence checking the right information, lists, etc. (and documenting your due diligence).

In the end you need to know what you are selling and whether or not it needs an export license (and it's not as simple as you hope because many products are "Dual Use" and you need to know whether yours is or not).

Then you need to make sure the country you plan to export to isn't on any prohibited country list (yes, there are a few, mostly well known countries on these lists).

Once you get this far, then you need to check the Denied Persons Lists to make sure the Company, Person(s) or address are not on the list.

And finally, though it will definitely cause some heartburn, you technically need to know what the end user will use your product for... a vegetale store probably shouldn't need biochemical equipment, a clothing business probably shouldn't need super computer parts, so if they order it you need to ask and understand what they will use your product for. Okay, Okay, so there is not way for you to know to whom your distributors will ultimately sell to or for what purpose, BUT you need to do due diligance and at least attempt to determine this and document the distributors reply.

So, yes, eCommerce is a great thing and many businesses will benefit from it, but don't do it blindly without checking the questions above.