WCO HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM (“HARMONIZED SYSTEM” OR HS) CHANGES

On 12 July, an article from Strategic Trade Control Research Group LLC explained that the HS is a uniform taxonomy used for Customs tariffs and international trade statistics (such as the basis of EU Commodity Codes), and that every 5 years, the WCO issues a new edition of the HS which features updates and modifications to the coding system to reflect emerging technologies, clarifications, and other approved changes.  In January 2020, the contracting parties to the HS Convention approved the 7th edition of the HS, which included 351 sets of amendments. It will come into effect on 1 January 2022.  It further explains that the HS code declaration on customs documents is used to not only assess tariffs, but also to assist in determining whether a shipment may contain strategic goods and is subject to export control licence requirements.  It does point out that the HS system was not designed to identify strategic goods and does not correlate well with Export Control Classification Numbers (ECCN) that correspond to national and multilateral export control regimes.  This lack of clear correlation makes it difficult to track strategic trade flows and harder for Customs authorities to use the HS to try an uncover shipments that should be licensed but are not.  The article goes on to explain how 16 of the 351 amendments being made to the system apply to dual-use, strategic goods covering materials, manufacturing and testing equipment, and key end-use products, and that this separates out strategic goods and generally make the correlation between ECCN and the HS code much clearer.  It goes on to explain how the changes may be used to better identify problem shipments, and to what the amendments involving strategic goods apply.  A table is provided which shows the details of the amendments, and the relevant ECCN that applies to the new or expanded HS codes under the amendments.  The article says that authorities should prepare for the opportunities presented by more accurate identification of strategic goods within the HS – and that this includes formulating domestic outreach plans and brainstorming ways to apply more robust data for future strategic trade control enforcement efforts.

https://www.stcresearchgrp.com/home/our-work/hs2022-amendments

 

 

 

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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