Product Categorization

As volumes of data become larger and larger, an increasing need for classifications of goods and services, as well as for systems to compare among different regions has emerged for solving several purposes: standardize names of goods, analyse trends, establish fees or for generating local and/or international statistics.

Organizations such as the United Nations (UN), World Customs Organization (WCO), and United Nations Economic Commission for Europe (UNECE) have created different classifications in order to seek harmonization and standardization of data among countries.


International classifications can be divided into three groups, whether they are defined by goods, services, or industries. These identified classifications are the following:

Classification Definition Type Entity
HS Harmonized Commodity Description and Coding System Goods World Customs Organization
SITC Standard International Trade Classification Goods United Nations
CPC Central Product Classification Product (Good+Service) United Nations
ISIC International Standard Industrial Classification Industry (Economic activity) United Nations


The international classifications (HS, SITC, ISIC and CPC) have been established as references of the different categories of products and services. The diagram below shows the relationship among these classifications.  The blue lines represent classifications that were used as reference to generate others and green lines to show if there is compatibility (correlation) between codes. A correlation table is a chart that translates a given code from one classification to the other.  For example: when CPC was generated, it used as reference the HS and the SITC. Additionally, CPC has correlation tables with the HS, SITC and ISIC.

Classification Differences

This table shows a typical example of the same commodity classified using all four categorizations.

Detailed commodity list General good classification Good+Services Industry of Origin
Vegetables have an entire assigned section Vegetables are a division within a section Vegetables belong to a division within a section Only refers to the industry of activity, no detail at the commodity level
0804.30 057.95 01318 0122
Section II: Vegetable products Section 0: Food and live animals Section 0: Agriculture, forestry and fishery products Section A: Agriculture, forestry and fishing
Chapter 08: Edible fruits & nuts, peel of citrus/melons Division 05: Vegetables and fruit Division 01: Products of agriculture, horticulture and market gardening Division 01: Crop and animal production, hunting and related service activities
Heading 0804: Dates, figs, pineapples, avocados, etc., fresh or dried Group 057: Fruit and nuts (not including oil nuts), fresh or dried Group 013: Fruit and nuts Group 012: Growing of perennial crops
Sub-heading 0804.30: Pineapples Subgroup 057.9: Fruit, fresh or dried, n.e.s. Class 0131: Tropical and subtropical fruits Class 0122: Growing of tropical and subtropical fruits
  Basic heading 057.95: Pineapples, fresh or dried Subclass 01318: Pineapples  


HS Code

The Harmonize System (HS) is an international good nomenclature used by customs authorities around the world to identify products for the application of duties, taxes and regulations, and as a basis for the collection of international trade statistics.  Over 98% of the world’s merchandise is classified in terms of the HS.


HS Panama

Since 2013, Panama has joined the Central American Customs Union, aligning itself with the Central American Harmonize System (SAC).

The Central American Harmonize System (SAC) constitutes the nomenclature for the official classification of goods at the Central American level and is based on the nomenclature of the Harmonized System (HS), designation and codification of goods.

In November 2016, through Cabinet Decree No. 35, Panama adopts the sixth amendment approved by the World Customs Organization and the codes of the Central American Harmonize System (SAC) are extended to ten digits.

Subsequently, Panama through Cabinet Decree No. 27, decide to modify the structure of the national import tariff to 12 (twelve) digits. This new nomenclature reflects the structure of the SAC; the addition of 2 (two) digits is done to provide a more specific description of the products and improve monitoring.

The Ministry of Economy and Finance (MEF) has available on the website the Import Tariff in terms of the SAC nomenclature. For its part, SIECA (Secretariat of Central American Economic Integration) has a consultation tool to search Regional Import Tarrif, in this tool it is possible to download the SAC Correlation Table detailing changes from one amendment to another.




HS Code throughout the Supply Chain

HS codes can be used to track product demand across the supply chain. In the example below, two different products are imported, each with a different HS code. After the manufacturing process, both product turn into one and the new product to be exported receives a new HS code.

By using trade data classified into HS coding, researchers can identify how much product is imported, manufactured, and exported.