Commodity codes are based on the Harmonized System (HS), an international standard for identifying goods to customs and other government agencies. It is the basis for calculations of duty, and it eases the flow of goods across borders. The HS is maintained by the World Customs Organization (WCO).
The codes clarify the type of imported/exported goods, and define national tariffs and customs declarations worldwide. They also help governments to produce statistics on trade flows and understand the impact of trading agreements. Each commodity code is also known as 'tariff number' or 'HS code'.
The first 6 digits of each code are common to all countries. Each country is permit to add extra digits to suit its own tariff and statistical needs, creating country-specific codes.
Several trade zones established a common customs nomenclature based on the HS codes, such as the European Union and the MERCOSUR.