In this article, together with a customs clearance specialist from GoodLogistics company, we will find out what is UCCFEA and how to choose a product code according to this classification for import-export activities.
So, UCCFEA is the Ukrainian Classification of Goods for Foreign Economic Activity. Each product that undergoes customs clearance when crossing the border is assigned a code according to this classification. The code consists of ten digits, and it determines the customs duty rates and necessary non-tariff measures for a specific cargo.
The meaning of the digits is as follows: the first two indicate the product group, the first four – the product position, the six digits together denote the product sub-position, and eight indicate the product category. The full code, that is, 10 digits, indicates the product subcategory.
Not all countries have a 10-digit code like in Ukraine. Abroad, six- and eight-digit designations are used. But it is important that the first four digits match, no matter which country the cargo undergoes customs clearance in.
To select the correct code, you need to study in detail the technical characteristics, the method of application, and even the composition of the product that you are processing.
In this algorithm, the first step is the field of application of the product, its functionality. If it can be clearly defined, the category is chosen according to this criterion. For example, if you are exporting a car part, you will categorize it as «spare parts for a car».
However, in many cases, it is not easy to clearly define the field of application. For example, if there's plastic as a raw material, which can be used in many different ways. It should be classified by material. If the material that the product is made of is not homogeneous, then the one that mainly determines it should be chosen.
In general, the Ukrainian Classification of Goods for Foreign Economic Activity (UCCFEA) contains detailed explanations for each category: what products can be identified by a particular code. But sometimes, similar products can fall into different categories with different rates of customs duties.
As an example, let's consider two positions: rods and televisions. Rods can be classified into different categories based on the content of copper in their composition. And televisions – depending on the number of connectors. If a television has one connector, it can be transported at a 0% duty rate, and if it has more than one, only at a 10% duty rate.
Customs clearance is an extremely responsible process. If a subject of foreign economic activity deliberately declares goods incorrectly and this is discovered, they will have to pay a fine in the form of three times the difference between the actual payment and the one that should have been done according to the law.
If the violation is very serious, the transported cargo can even be confiscated.
If for any reason you are not completely sure about the technical description of the product provided to you, it is better to conduct a physical inspection.
There are also cases where classifying a product is extremely difficult. In this case, customs officials will not fine the owner, even if they decide that the code in the shipping documents is incorrect.
Recently, customs services have been conducting post-audits more actively: within three years after the declaration with the product code was issued and confirmed, the information provided in it may be reviewed and challenged. So take this issue as seriously as possible.
The correct selection of the code according to the Ukrainian Classification of Goods for Foreign Economic Activity (UCCFEA or UCGL) is a crucial stage in the process of customs clearance of goods. Incorrect classification of goods can lead to delays in customs clearance, additional costs, and even fines. Therefore, the correct selection of the product code is important not only for the timely delivery of goods but also for the success of the business as a whole.
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