Learn about HS CODE/SMN and what they are good for

Learn about HS CODE/SMN and what they are good for

Since January 1995, Mercosur member countries have adopted the Shared Mercosur Nomenclature (SMN) based on the Harmonized System (HS).

SMN stands for “Shared Mercosur Nomenclature” and is an eight-digit code established by the Brazilian Government to identify the nature of goods and foster the development of international trade, also facilitating the collection and analysis of foreign trade statistics. Any merchandise, imported or purchased in Brazil, must have an SMN code in its legal documentation (invoice, legal books etc.), whose purpose is to classify the items according to Mercosur regulations.

The SMN is based on the Harmonized Commodity Description and Coding System (HS). Hence, the acronym: SMN/SH (HS CODE).

The Harmonized Commodity Description and Coding System, or simply the Harmonized System (HS), is an international method of classifying goods based on a structure of codes and their descriptions that was created to promote the development of international trade and to enhance the collection, comparison and analysis of statistics, particularly those of foreign trade. Furthermore, the HS/SMN facilitates international trade negotiations, the compilation of freight rates and statistics on the various modes of transport of goods and other information used by the various players in international trade.

Of the eight digits that make up the SMN, the first six are made up of the Harmonized System, while the seventh and eighth digits correspond to specific developments attributed within MERCOSUR.

A search for SMN code 0102.10.10 makes it possible to determine that these are:

01 – Live Animals
0102 – Live Animals of Cattle Species
010210 – Purebred Breeders
01021010 – Pregnant or nursing calves.

The tax classification of goods is the responsibility of the Federal Revenue Service (SRF). From January 1, 2010, the inclusion of SMN/HS categorization of products in tax documents became mandatory. You can find tables with SMN codes. You can also search the IRS website by entering the product description or searching according to chapter, position, subheading, item and subitem codes.

HS CODE New Version

Since January 1, 2017, the new edition of the nomenclature of the Harmonized Commodity Description and Coding System, adopted by more than 200 customs administrations, has entered into force. In Brazil, the change entailed updating the Shared Mercosur Nomenclature (SMN), which directly affects the Shared External Tariff (SET), the IPI Table (Tipi) and all other information based on the HS.

The 2017 version of the HS nomenclature, under the administration of the World Customs Organization (WCO), includes 233 sets of amendments, up from the last revision in 2012, when 220 sets of amendments were promoted. In the division by sectors, the SH-2017 brings 85 changes to the agricultural sector; 45 for the chemist; 25 in machines; 13 for woods; 15 in textiles; 6 for base metals; 18 for the transport sector and 26 from other segments.

New versions of HS are scheduled to take place every five years, however there is an understanding among parties involved in the process that the review needs to be streamlined.

If you still have any questions about SMN/HS or would like to clarify other foreign trade questions, please contact us!

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