Country of Origin and Harmonized System Tariff Code

Country of Origin

The Country of Origin (COO) is a product-specific code. It specifies the country where a product was manufactured, produced, or grown. Various national laws and international treaties apply rules based on this COO code. You set up the Country of Origin codes in SA Table Code Value Setup. The Country of Origin can then be associated with an HS Tariff Code and used with purchasing and accounts payable, or Vendor, functions.

Each individual product should have a single Country of Origin. We recommend that identical SKU products from different countries be set up as a separate SKUs. You can search or lookup a specific SKU that is based the country designation. Warehouse transfers are not tracked.

Harmonized System Tariff Code

"The Harmonized Commodity Description and Coding System generally referred to as 'Harmonized System’ or simply ‘HS’ is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). It comprises about 5,000 commodity groups; each identified by a six-digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification.” [www.wcoomd.org]

HS Tariff Codes provide consistency in international trade and are becoming the industry standard. If you purchase products from a foreign vendor, there may be a tariff assessed with the product during import. In Distribution SX.e, you can set up an HS tariff code and assign it to a product. Set up the HS tariff code and associate it with a Country of Origin, a duty rate, and a general ledger account in SA Tariff Rate Setup.

How it works

Functionality provides for setup, use, and printing of the Country of Origin (COO) code and HS tariff code. Codes are assigned to products in Product Setup and are maintained in applicable records. This enables the codes to be included on applicable product records, purchase orders, reports, and Commercial Invoice Documents. Use of these codes is optional. You can also use them in tandem or separately.

You can set up a default Country of Origin and HS tariff code to be assigned to each stock and nonstock catalog product ordered. You can also manually assign the codes to a true nonstock product ordered. You must plan and coordinate to build the data relationships for these codes based on how you intend to use them. For example, do you want to:

• Define an HS Code with or without an associated COO
• Assign the COO and HS codes to a product for identification
• Assign the COO and HS codes to a product for tariff calculation

Commercial Invoice Document

This is a form you must provide as a customs declaration for items you are exporting across international borders. The form must contain specific and required information about the seller, buyer, and goods/services, and it is typically used by customs to calculate tariffs. Use the Sales Commercial Invoice Print Report to print the Commercial Invoice Document. If you assign the Country of Origin for a product, the system adds this code to the line of an invoice and includes it in the data stream so it can print on the form.

Stock products

When you create new or revise existing stock products in Product Setup and Warehouse Product Setup, you can select the applicable COO and HS tariff code for each product. Typically, the values in Product Setup and Product Warehouse Product Setup should match. The COO code that you select should be the country where the product was manufactured. For kits, the code should be the country where the kit is assembled.

During Purchase Order Entry, if you enter a stock product, the system logic checks for existing settings in both in Product Setup and Product Warehouse Product Setup. The COO and HS tariff code from Product Warehouse Product Setup default to the order line.

During Sales Order Entry, if you enter a stock product, the COO and HS tariff code from Product Warehouse Product Setup default to the order line. In Sales Order Entry, these fields are informational for the customer service representative (CSR). The fields are also enterable and intended primarily for occasional correction, not for routine modification of product setups.

When a sales order or purchase order is copied, the COO and HS tariff code values from Product Warehouse Product Setup default to the order line.

Catalog products

When you create new or revised existing nonstock catalog products in Product Catalog Setup, you can select the applicable COO and HS tariff code for each product.

During Purchase Order Entry, if you enter a catalog product, the system logic checks for existing product settings. If you accept the existing settings, the COO and HS tariff code values from Product Catalog Setup default to the order line.

During Sales Order Entry, if you enter a catalog product, the COO and HS tariff code from Product Catalog Setup default to the order line. In Sales Order Entry, these fields are informational for the customer service representative (CSR). The fields are also enterable and intended primarily for occasional correction, not for routine modification of product setup.

Nonstock products

During Purchase Order Entry, select a Line Type of Non-Stock. Follow the normal work flow for entering a nonstock product. In the Non Stock window, if the product you specified already exists in the existing stock inventory or in the catalog, the system logic checks for existing product settings from either Product Warehouse Product Setup or Product Catalog Setup. These settings display in the Use Existing Settings window. If you accept the settings, the COO and HS tariff code values default to the order line. If the nonstock product cannot be found, the system returns no settings and you must specify the appropriate information in the Non Stock window, which can include the COO and HS tariff code.

During Sales Order Entry, if you enter a catalog product, and the product you specified already exists in the catalog, the system logic checks for existing product settings from either Product Catalog Setup, Product Line Setup, or Product Warehouse Description Setup.

• If you accept these settings, the COO and HS tariff code values default to the order line, if an inventory item is also created, or to the Purchase Order Entry - Nonstock window, if creating an inventory item is not an option.
• If you create a stock product from the catalog product, the COO and HS tariff code values default in a similar manner.
• If the nonstock product cannot be found, the system returns no settings and you must specify the appropriate information in the Purchase Order Entry - Nonstock window, which can display the COO and HS tariff code.

If you are copying a sales order or purchase order, the COO and HS tariff code values for lines with non-stock product are copied as-is from the source order.

PO receiving/AP costing

Country of Origin and HS tariff code is tracked by PO, but only for purposes of calculating the correct tariff on any incoming product. During PO receiving and AP costing, the system checks the tariff code loaded on the PO line, versus the Product Warehouse Product Setup record. The duty rate applies to true nonstock items and stock items.

The duty rate calculation continues to restrict ‘Not for Resale’ line items according to normal work flow. The default Country of Origin on product records is not changed based on PO receipts. If the Country of Origin is changed for a product in a warehouse, Country of Origin on the relevant product record must be changed manually. Records relating to Duty Drawback must be kept manually.

Blanket orders and releases

Items in different warehouses may have different Countries of Origin. When consolidated buys or blanket orders are used and items are released for different warehouses, ensure that you verify the Country of Origin and HS Code on the released order. You cannot maintain the Country of Origin or HS tariff code in Purchase Blanket Release Entry. Instead, to change the data on a BR line, maintain the blanket release in Purchase Order Entry.