World Customs Organization makes changes to HS classifications

Pile of red ring bindersInternational customs officials at the World Customs Organization (WCO) have agreed on 234 changes to the global system that categorizes products that are imported and exported around the world, and countries are beginning their individual processes to incorporate those changes into their own domestic product category systems. Countries have until January 1, 2017, to incorporate the changes, but much work lies ahead.

The U.S. International Trade Commission (USITC) is the U.S. agency charged with maintaining and updating the United States’ product category system, the U.S. Harmonized Tariff Schedule (HTS).

“The first step for importers and exporters is to become aware of the changes being made at the international level. If they believe they will be affected, they will want to stay on top of the process as it moves forward.”

The USITC has posted the WCO document outlining the changes on its website at: http://www.usitc.gov/tariff_affairs/WCORecommendationofJune272014.pdf

USITC nomenclature analysts are analyzing the WCO document, and the Commission expects to issue proposed recommendations on changes to the HTS in December 2014. At that time, the USITC will seek public comments on the proposed recommendations. Detailed information on how to submit comments and related deadlines will be provided at that time.

The USITC will consider all public comments, as well as comments from other U.S. agencies, in making its recommendations. The recommendations will be submitted to the President (through the U.S. Trade Representative) by July 2015. Following expiration of a 60-day layover period before the Congress, the President may proclaim the modifications to the HTS.

More information about the USITC investigation can be found in the notice of investigation dated August 20, 2014.

Background

The Harmonized Commodity Description and Coding Systems, 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 supported by well-defined rules to achieve uniform classification. The system is used by more than 200 countries and economies as a basis for their customs tariffs and for the collection of international trade statistics. More than 98 percent of the merchandise in international trade is classified in terms of the HS.

The HS contributes to the harmonization of customs and trade procedures and the non-documentary trade data interchange in connection with such procedures, thus reducing the costs related to international trade. It is also extensively used by governments, international organizations and the private sector for many other purposes such as internal taxes, trade policies, monitoring of controlled goods, rules of origin, freight tariffs, transport statistics, price monitoring, quota controls, compilation of national accounts, and economic research and analysis. The HS is thus a universal economic language and code for goods, and an indispensable tool for international trade.

The Harmonized System is governed by “The International Convention on the Harmonized Commodity Description and Coding System.” The official interpretation of the HS is given in the Explanatory Notes (5 volumes in English and French) published by the WCO. The WCO is responsible for securing uniform interpretation of the HS and its periodic updating in light of developments in technology and changes in trade patterns. The WCO manages this process through the Harmonized System Committee (representing the Contracting Parties to the HS Convention), which examines policy matters, takes decisions on classification questions, settles disputes and prepares amendments to the Explanatory Notes. The HS Committee also prepares amendments updating the HS every four to six years.

A Guide to the Harmonized Tariff Schedules of the United States

Welcome to “A Guide to the Harmonized Tariff Schedule of the United States” (HTS) e-learning module.

“This module is designed to provide a basic understanding of the HTS and explain how to read the tariff schedule. It was originally designed for analysts and other staff of the United States International Trade Commission, but is now available to the public to enhance understanding of the HTS. The HTS is used to determine tariff classifications for goods imported into the United States. The United States International Trade Commission (USITC) plays a unique role in maintaining the HTS for Congress. The USITC also advises the United States Trade Representative (USTR) and Congress about trade proposals that might modify any or all of the thousands of product categories and duty rates.