By the Numbers
New products in trade call for new classification codes
With the New Year, an updated 2012 edition of the 6-digit Harmonized System (HS) of product classification codes overseen by the World Customs Organization (WCO) goes into effect.
It’s the fourth such update, the culmination of a five-year process of review and amendment to ensure the global system of nomenclature for trade goods clearly identifies what’s actually being bought, sold and subjected to tariffs. Some 40 subheadings are being retired because trade in these products has slipped below a defined threshold (currently US$50 million) – although the banishment of HS 530810, coir yarn, has been stayed by appeal.
On the other hand, distinct codes will be available for the first time to identify water pipe tobacco (240311), lithium-ion batteries (850760), and quinoa (100850).
Changes in trade volumes, new inventions and/or product evolution can signal the need for reclassification. The WCO offers the example of hygiene absorbent products, which include infant diapers, adult incontinence products, and feminine sanitary products. Under the previous HS 2007, these products would be classified by the materials from which they are made (and fall variously under headings 48.18, 56.01, 61.11, or 62.09). As of January, all these products will fall under one heading, 96.19.
In the US, in anticipation of HS 2012, the International Trade Commission (ITC) adopted many of its classification changes with the 2011 edition of the 10-digit Harmonized Tariff System of the US (HTSUS). Among the notable additions are codes to identify separately fruits, vegetables, coffee, and grains (under headings 0709, 0804, 0808, 0810, 0901, 0902, and 1201) that are “Certified Organic”, an increasingly important subset of trade in these products. [See Mexico Leads US Organic Fruit Imports]
Not incidentally, the ITC has just issued a preliminary 2012 version of the HTS – preliminary in that changes are expected as Presidential Proclamations are issued to implement or modify trade agreements.
Date posted: December 22, 2011