Import and customs guide: HS codes, duties and landed cost
The true cost of importing raw materials is set by the duties, additional taxes and customs charges added to the product price. Correct classification and the right regime – inward processing, bonded warehousing, preferential origin – save serious money, while wrong declarations lead to back duties and penalties. This guide explains the core concepts of importing, from classification to landed-cost calculation and sanctions checks.
Updated October 14, 2026
In this guide
- HS code (Harmonized System)
- Customs valuation (transaction value)
- Import duty (customs tariff)
- VAT (value added tax) on imports and exports
- Anti-dumping and countervailing duty (AD)
- Certificate of origin and preferential origin proofs (EUR.1, A.TR, Form A) (C/O)
- Inward processing relief (IPR)
- Bonded warehouse
- Customs broker
- Landed cost
- Sanctions and export-control screening
- Dual-use goods and export controls
- Carbon Border Adjustment Mechanism (CBAM)
HS code (Harmonized System)
The World Customs Organization’s goods classification system, used in about 200 countries. The first six digits are the same everywhere (e.g. 3902.10 polypropylene); countries add their own subdivisions – 12-digit GTİP in Türkiye, 8-digit CN and 10-digit TARIC in the EU, 10-digit HTS in the USA. The correct code determines the duty rate, import licences, anti-dumping measures, preferential origin rules and trade statistics. Misclassification can lead to back duties and penalties; where unsure, a binding tariff information (BTI) ruling can be requested.
Full entry and related terms in the glossary →
Customs valuation (transaction value)
The value on which duty is calculated. Under the WTO Customs Valuation Agreement the primary basis is the price actually paid or payable (transaction value). Most countries, including the EU and Türkiye, add freight and insurance up to the point of entry (CIF basis), while some, such as the USA, use a FOB basis. Commissions, royalties and buyer-supplied assists such as moulds may also be added. If under-invoicing between related parties is found, customs applies other methods and penalties.
Full entry and related terms in the glossary →
Import duty (customs tariff)
A tax charged on imported goods on their customs value, according to the HS code and country of origin. It is usually a percentage of value (ad valorem), sometimes an amount per quantity (e.g. EUR per tonne). The rate can change with the general WTO rate (MFN), free trade agreements (zero or reduced rates), additional duties or anti-dumping measures. In landed-cost calculations it is computed on the CIF value including freight and insurance and is then added to the VAT base.
Full entry and related terms in the glossary →
VAT (value added tax) on imports and exports
A tax on consumption. Exports are zero-rated in most countries, so the exporter can reclaim the input VAT it has paid. On imports, VAT is collected at customs on the customs value plus duty and other taxes, and a registered importer can usually deduct it, so the main impact is on cash flow. Between VAT-registered businesses in intra-EU trade the reverse-charge mechanism applies. Standard rates vary widely (e.g. 20 % in Türkiye, 19 % in Germany), and some raw materials enjoy reduced rates.
Full entry and related terms in the glossary →
Anti-dumping and countervailing duty (AD)
An extra duty a country imposes on imports sold below the exporter’s home-market price (dumping) or supported by state subsidies, where these injure domestic producers. After an investigation, rates are set for specific origin countries and even individual companies; they are very common for raw materials such as steel, aluminium, PET, PVC, chemicals and fibres. Rates can exceed 100 %, so measures in force for the HS code and origin must always be checked when planning imports, and misdeclaring origin through transshipment brings severe penalties.
Full entry and related terms in the glossary →
Certificate of origin and preferential origin proofs (EUR.1, A.TR, Form A) (C/O)
A document showing the country in which goods were produced or obtained, usually certified by a chamber of commerce. Non-preferential certificates serve anti-dumping, quota and import-ban rules; preferential proofs give reduced or zero duty under free trade agreements – the A.TR movement certificate for industrial goods between the EU and Türkiye, EUR.1 or an origin declaration on the invoice where origin rules are met, Form D in ASEAN, Form E under China’s agreements, and so on. Origin rules vary by product, and false documents bring large duty differences and penalties.
Full entry and related terms in the glossary →
Inward processing relief (IPR)
A customs regime that lets manufacturers import raw materials used to make export products without paying duty, anti-dumping duty or import VAT (or against a guarantee). It is granted through an inward processing authorisation – in Türkiye the DİİB certificate – and the export commitment must be discharged within a set period. It is a major cost advantage for exporters sourcing raw materials at world prices.
Full entry and related terms in the glossary →
Bonded warehouse
A customs-controlled facility where imported goods can be stored for a long or unlimited time without paying duties. While in bond, goods can be resold to another country (transit trade), released into free circulation in instalments, or sampled; duties are paid only on the quantity withdrawn. Raw material distributors use bonded warehouses widely to hold stock while protecting cash flow and delivering quickly.
Full entry and related terms in the glossary →
Customs broker
A licensed specialist who prepares customs declarations on behalf of importers and exporters, declares the classification (HS code), value and origin of goods, calculates duties and deals with the customs authorities. In many countries brokers are licensed by the customs administration and share responsibility for the accuracy of declarations. A good broker saves money through regimes such as inward processing, bonded warehousing, preferential origin and anti-dumping planning.
Full entry and related terms in the glossary →
Landed cost
The total cost of a raw material until it reaches the manufacturer’s warehouse: product price + freight + insurance + customs duty and additional taxes + port, terminal and demurrage charges + customs broker fees + inland haulage + financing (letter of credit, interest) + exchange-rate effects. Offers with different Incoterms, origins and payment terms can only be compared correctly once converted to a landed-cost basis. A distant supplier with a low FOB price may end up more expensive than a nearby one after freight and anti-dumping duty.
Full entry and related terms in the glossary →
Sanctions and export-control screening
Checking whether the buyer, seller, banks, vessel and end user appear on UN, EU, US (OFAC) or UK (OFSI) sanctions lists, and whether the goods are going to sanctioned countries or prohibited uses. Banks may freeze payments that carry sanctions risk, and breaches lead to heavy fines and account closures. Because sanctions change often, screening should be repeated for every deal, watching for evasion signs such as ship renaming or switched-off AIS.
Full entry and related terms in the glossary →
Dual-use goods and export controls
Licensing requirements for exporting items that can serve both civilian and military purposes – certain special steels, titanium and superalloys, carbon fibre, rare earths, some chemicals and precursors. Lists and rules are set nationally on the basis of the Wassenaar Arrangement, Nuclear Suppliers Group, Australia Group and Missile Technology Control Regime (e.g. EU Regulation 2021/821, US EAR). Exporting without a licence carries criminal penalties, so the seller should request an end-user certificate.
Full entry and related terms in the glossary →
Carbon Border Adjustment Mechanism (CBAM)
The European Union’s mechanism that charges imports of iron and steel, aluminium, cement, fertilisers, hydrogen and electricity for the carbon emissions embedded in their production, at a price linked to the EU ETS. The 2023–2025 transitional phase required reporting only; from 2026 authorised declarants must buy CBAM certificates. Suppliers selling these products into the EU now need verified installation-level emissions data to stay competitive.