What is UKTZED?
In this article, together with a specialist from Grand Logistics Company, we will consider what UKTZED is and how to choose the right product code for import and export activities. UKTZED is the Ukrainian Classification of Goods for Foreign Economic Activity. Each product that undergoes customs clearance when crossing the border receives a code according to this classification. This code consists of ten digits and is used to determine the duty rates and necessary non-tariff regulation measures for a particular shipment.
The meaning of the digits in the code is as follows:
- The first two digits indicate the commodity group.
- The first four digits indicate the commodity item.
- Six digits together indicate a subheading.
- Eight digits define the product category.
- The full ten-digit code represents a product subcategory.
In other countries, codes may consist of six or eight digits. It is important that the first four digits match regardless of the country through which the cargo passes.
How to choose a code
To select the correct code, it is necessary to study in detail the technical characteristics, method of application, and composition of the product. The first step of the algorithm is the scope of the product and its functionality. If the area of application can be clearly defined, the code is selected according to this criterion. For example, a car part will be classified as “car parts”.
In cases where the application is difficult to determine, such as with plastic, which can be used in different ways, it is classified by material. If the product consists of heterogeneous materials, the main material that defines it is selected.
The UKTZED contains detailed explanations for each category, but sometimes similar goods fall into different categories with different rates of customs duties. For example, rods can be classified into different categories depending on their copper content, and TV sets can be classified into different categories depending on the number of connectors. Televisions with one connector are subject to zero duty, while those with multiple connectors are subject to a 10 percent duty.
What happens if I declare the goods incorrectly?
Customs clearance is an extremely responsible process. If the goods are intentionally declared incorrectly and this is discovered, the foreign economic operator will be fined three times the difference between the actual rate and the legal rate. In serious cases, the cargo may be confiscated. In other situations, a protocol is drawn up.
If you are not sure about the technical description of the product, it is better to conduct a physical inspection. There are cases when it is difficult to classify products. In this case, customs officials may not fine the owner, even if the code is incorrect.
Recently, the customs services have been more active in conducting post-audits: within three years after the declaration is made, the data can be reviewed and challenged. Therefore, the issue of code selection should be treated as responsibly as possible.
Order cargo transportation from Grand Logistics Company
Contact Grand Logistics Company for reliable and fast customs clearance and cargo transportation. We will ensure the correct selection of the UKTZED product code and help you avoid problems with customs. Your cargo will be delivered on time and without any hassle!
