Product Classification made by RespectUs, to determine dual-use and military codes

ML, DU, HS, CN: all codes that you will meet during your product classification.

Starting with right customs codes is key. If you use wrong codes, your products may get delayed going through customs, or even held indefinitely, you may have to pay too much in customs duties, your customers get disappointed and you may get subject to fines and penalties. And, did you know that some sanctions against countries and persons are built on the customs number ? Are you aware of the differences between the HS (Harmonized System) code and the CN (Combined Nomenclature) code? And what the hell is TarLux and TarBel?

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Dual-use classification is a strictly technical check. It is necessary to compare the technical attributes of the product to be classified with the technical description in the checked list item. If there is match, your product is a listed dual-use item. The relevant control list for European exporters is Annex I (and Annex IV) of the EU Dual-Use Regulation 2021/821. But this list is amended at least once a year. Classification requires a lot of technical knowledge of your product, and often also needs input of a legal officer able to jungle through Annex I with its definitions, general notes, technical notes and code descriptions. Good to know, here, is that the actual use of the products does not have any effect on their classification. That is, a listed item does not lose its dual-use status because it will actually be used only for civilian purposes. At the same time, a product that is not on the dual-use list does not become a dual-use item because of a critical use for military purposes, for example. Dual-use classification is independent of the recipient and the use as well.

The same approach is valid for the check against military lists (in Europe, the EU Common Military List; ITAR in the US). But how to check if your product meets the criteria of "specially designed or modified" for a military use (a condition often used by control lists to include the product in the list)? Do you have a clear understanding of what this means? Do you have internal processes in place to get technical information to do this assessment?

All control lists may be easy to understand on the surface, but the challenges and difficulties to implement the checks are considerable.

Product classification also requires a clear documentation of technical checks and systematic maintenance of master data. The process needs most often cooperation of different people in the same company. Where are you storing all your classification sheets? Do you have alerts in place reminding you that the technical code against which you assessed has changed during a yearly update?

How are you handling classification of components you purchased from the manufacturer or supplier? The level of technical detail of the item descriptions in the control lists makes it difficult to classify a product that you yourself did not develop or manufacture. Are you checking the manufacturer’s information for export control classification, and if the information is not plausible, are you reclassifying the part independently?