The Harmonized SystemThe Harmonized System and its GIRs :and its GIRs : a brief introductiona brief introduction Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 1 a brief introductiona brief introduction Izaak WindIzaak Wind The HS : a WCO instrumentThe HS : a WCO instrument WCO : the intergovernmental organizationWCO : the intergovernmental organization uniquely competent in Customs mattersuniquely competent in Customs matters 177 Members (latest Member : Guinea177 Members (latest Member : Guinea-- Bissau)Bissau) Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 2 Bissau)Bissau) Global Centre of Customs expertiseGlobal Centre of Customs expertise Leading role in development, andLeading role in development, and implementation of modern Customsimplementation of modern Customs proceduresprocedures Harmonization and SimplificationHarmonization and Simplification of Customs Systems andof Customs Systems and ProceduresProcedures •• Conventions, other instruments andConventions, other instruments and Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 3 •• Conventions, other instruments andConventions, other instruments and bestbest--practice approachespractice approaches •• Harmonization and simplification ofHarmonization and simplification of Customs systems and proceduresCustoms systems and procedures The Harmonized System (HS)The Harmonized System (HS) Multipurpose Goods NomenclatureMultipurpose Goods Nomenclature Basis for Customs Tariffs and Trade Statistics of 200Basis for Customs Tariffs and Trade Statistics of 200 countries and economiescountries and economies More than 98 % of World trade in terms of the HSMore than 98 % of World trade in terms of the HS A universal economic language and code forA universal economic language and code for Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 4 A universal economic language and code forA universal economic language and code for transportable goodstransportable goods Implemented internationally in 1988 by the HSImplemented internationally in 1988 by the HS Convention (139 Contracting Parties by June 2011)Convention (139 Contracting Parties by June 2011) Maintained by WCO through the HS CommitteeMaintained by WCO through the HS Committee Nomenclature SubNomenclature Sub--Directorate acts as SecretariatDirectorate acts as Secretariat The Harmonized System (HS)The Harmonized System (HS) MAIN OBJECTIVESMAIN OBJECTIVES –– To facilitate international tradeTo facilitate international trade –– Collection, comparison and analysisCollection, comparison and analysis Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 5 –– Collection, comparison and analysisCollection, comparison and analysis of trade statisticsof trade statistics –– Standardization of tradeStandardization of trade documentation and transmissiondocumentation and transmission of dataof data The Harmonized System (HS)The Harmonized System (HS) Used by :Used by : Customs and statisticiansCustoms and statisticians GovernmentsGovernments International organizationsInternational organizations Private sectorPrivate sector Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 6 Many purposes, such as :Many purposes, such as : internal taxes, trade policies, monitoring of controlled goods,internal taxes, trade policies, monitoring of controlled goods, rules of origin, freight tariffs, transport statistics, pricerules of origin, freight tariffs, transport statistics, price monitoring, quota controls, compilation of national accounts,monitoring, quota controls, compilation of national accounts, and economic research and analysis.and economic research and analysis. A universal economic language and code for goods,A universal economic language and code for goods, and an indispensable tool for international tradeand an indispensable tool for international trade The Harmonized System (HS)The Harmonized System (HS) ConventionConvention –– PREAMBLEPREAMBLE “The Harmonized“The Harmonized Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 7 –– 20 ARTICLES20 ARTICLES –– + ANNEX+ ANNEX “The Harmonized“The Harmonized Commodity DescriptionCommodity Description and Coding System”and Coding System” commonly referred to ascommonly referred to as “Harmonized System”,“Harmonized System”, “HS”, or “Nomenclature”“HS”, or “Nomenclature” The Harmonized System (HS)The Harmonized System (HS) StructureStructure (2007(2007--edition)edition) 21 Sections21 Sections Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 8 21 Sections21 Sections –– 96 Chapters96 Chapters 1,221 headings (4 digits)1,221 headings (4 digits) –– 5,052 descriptions of commodities (6 digits)5,052 descriptions of commodities (6 digits) The Harmonized System (HS)The Harmonized System (HS) Section, Chapter and Subheading NotesSection, Chapter and Subheading Notes –– To define the scope of :To define the scope of : SectionSection ChapterChapter Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 9 ChapterChapter Heading (or group of headings)Heading (or group of headings) SubheadingSubheading –– Form an integral part of the HSForm an integral part of the HS –– Commonly known as “legal notes”Commonly known as “legal notes” The Harmonized System (HS)The Harmonized System (HS) General definitionsGeneral definitions limitinglimiting the scope of athe scope of a subheading or heading or the meaning ofsubheading or heading or the meaning of particular termsparticular terms Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 10 –– Examples :Examples : Subheading Note 4 to Chapter 27Subheading Note 4 to Chapter 27 –– definition of “light oils and preparations”definition of “light oils and preparations” Note 2 to Chapter 30Note 2 to Chapter 30 –– definition of “modified immunological products”definition of “modified immunological products” The Harmonized System (HS)The Harmonized System (HS) Non exhaustive listNon exhaustive list of products coveredof products covered –– example :example : Note 4 to Chapter 33Note 4 to Chapter 33 –– “perfumery, cosmetics or toilet preparations”“perfumery, cosmetics or toilet preparations” Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 11 “perfumery, cosmetics or toilet preparations”“perfumery, cosmetics or toilet preparations” of heading 33.07of heading 33.07 Exhaustive listExhaustive list of goods covered by a heading orof goods covered by a heading or group of headingsgroup of headings –– example :example : Note 4 to Chapter 30Note 4 to Chapter 30 -- “scope of heading 30.06”“scope of heading 30.06” The Harmonized System (HS)The Harmonized System (HS) ExclusionsExclusions (products(products notnot covered)covered) –– example :example : Note 2 to Chapter 29Note 2 to Chapter 29 –– Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 12 Note 2 to Chapter 29Note 2 to Chapter 29 –– “list of products not classified in Chapter 29“list of products not classified in Chapter 29 + indication where to be classified”+ indication where to be classified” NB. Almost all Chapters have an exclusion Note!NB. Almost all Chapters have an exclusion Note! The Harmonized System (HS)The Harmonized System (HS) Structure of the codeStructure of the code 30300404.10.10 (medicaments containing penicillin)(medicaments containing penicillin) –– 3030 = Chapter no= Chapter no.. Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 13 –– 3030 = Chapter no= Chapter no.. –– 0404 = the fourth heading within Chapter 30= the fourth heading within Chapter 30 –– 1100 = further subdivision within heading= further subdivision within heading 30.04, at 530.04, at 5--digit level.digit level. NB. Can also be further subNB. Can also be further sub--divided atdivided at 66--digit leveldigit level –– see 3004.31see 3004.31 The Harmonized System (HS)The Harmonized System (HS) Relation to national Customs tariffsRelation to national Customs tariffs –– Customs tariffs and statistical nomenclatures shallCustoms tariffs and statistical nomenclatures shall be in conformity with the HS :be in conformity with the HS : use all headings and subheadings together withuse all headings and subheadings together with their related numerical codestheir related numerical codes Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 14 their related numerical codestheir related numerical codes general rules of interpretation, all section notes,general rules of interpretation, all section notes, chapter notes and subheading noteschapter notes and subheading notes follow the numerical sequence of the HSfollow the numerical sequence of the HS no modifications permitted except textualno modifications permitted except textual adaptations for the purposes of domestic lawadaptations for the purposes of domestic law The Harmonized System (HS)The Harmonized System (HS) Make publicly available import andMake publicly available import and export trade statistics in term of 6export trade statistics in term of 6-- digit of the HSdigit of the HS Exceptions :Exceptions : Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 15 Exceptions :Exceptions : –– for reasons of commercial confidentiality orfor reasons of commercial confidentiality or national securitynational security –– goods of no commercial valuegoods of no commercial value To implement HS amendments on theTo implement HS amendments on the date of their entry into force (art. 16)date of their entry into force (art. 16) The Harmonized System (HS)The Harmonized System (HS) Harmonized System Committee (HSC)Harmonized System Committee (HSC) –– Composed of the representatives of HSComposed of the representatives of HS Contracting PartiesContracting Parties –– Two sessions in a yearTwo sessions in a year Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 16 –– Two sessions in a yearTwo sessions in a year –– Classification questions (including disputes)Classification questions (including disputes) –– Classification OpinionsClassification Opinions –– Explanatory Note amendmentsExplanatory Note amendments –– Legal Text amendmentsLegal Text amendments –– HSHS--related Council recommendationsrelated Council recommendations –– General questions and policy matters relatingGeneral questions and policy matters relating to the HSto the HS The Harmonized System (HS)The Harmonized System (HS) Working Party (WP)Working Party (WP) –– finalizing drafts of Classification Opinions andfinalizing drafts of Classification Opinions and Explanatory NotesExplanatory Notes Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 17 Review SubReview Sub--Committee (RSC)Committee (RSC) –– keeping the HS up to date in terms of tradingkeeping the HS up to date in terms of trading patterns and changes in technologypatterns and changes in technology Scientific SubScientific Sub--Committee (SSC)Committee (SSC) –– assisting the HSC and other WCO committeesassisting the HSC and other WCO committees The Harmonized System (HS)The Harmonized System (HS) And thenAnd then :: HOW TO CLASSIFY A COMMODITY ?HOW TO CLASSIFY A COMMODITY ? –– wiiwii –– what material or substance is it ?what material or substance is it ? Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 18 –– what material or substance is it ?what material or substance is it ? –– what is its function or use ?what is its function or use ? –– under what form is itunder what form is it imported/exported ?imported/exported ? –– is it the only possible classification ?is it the only possible classification ? The Harmonized System (HS)The Harmonized System (HS) Classification : an easy or complex exercise?Classification : an easy or complex exercise? General Interpretative RulesGeneral Interpretative Rules Rule 1 : Terms of headings and NotesRule 1 : Terms of headings and Notes Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 19 Rule 1 : Terms of headings and NotesRule 1 : Terms of headings and Notes Rule 2 : Expanding the scope of headingsRule 2 : Expanding the scope of headings Rule 3 : Classification under two or moreRule 3 : Classification under two or more headingsheadings Rule 4 : AkinRule 4 : Akin Rule 5 : PackagingRule 5 : Packaging Rule 6 : Subheading levelRule 6 : Subheading level Rule 1 : Terms of headings and NotesRule 1 : Terms of headings and Notes Heading 22.06 : Mixtures of fermentedHeading 22.06 : Mixtures of fermented beverages and mixtures of fermentedbeverages and mixtures of fermented beverages and nonbeverages and non--alcoholic beverages,alcoholic beverages, n.e.s.o.i.n.e.s.o.i. Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 20 Heading 82.14 : Manicure or pedicure setsHeading 82.14 : Manicure or pedicure sets Heading 30.06 : FirstHeading 30.06 : First--aid boxes and kitsaid boxes and kits Heading 96.05Heading 96.05 : Travel sets for personalTravel sets for personal toilettoilet Rule 2 : Expanding the scope of headingsRule 2 : Expanding the scope of headings (i)(i) Rule 2 (a)Rule 2 (a) :: •• presented incomplete or unfinishedpresented incomplete or unfinished Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 21 •• presented incomplete or unfinishedpresented incomplete or unfinished •• essential character of the completeessential character of the complete or finished articleor finished article Rule 2 : Expanding the scope of headingsRule 2 : Expanding the scope of headings (ii)(ii) Rule 2 (a)Rule 2 (a) :: •• presented unassembled orpresented unassembled or disassembleddisassembled Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 22 However :However : •• Work trucksWork trucks fittedfitted with a crane (heading 84.26)with a crane (heading 84.26) or with lifting or handling equipment (headingor with lifting or handling equipment (heading 84.27)84.27) •• ChassisChassis fittedfitted with engines : heading 87.06with engines : heading 87.06 Rule 2 : Expanding the scope of headingsRule 2 : Expanding the scope of headings (iii)(iii) Rule 2 (b)Rule 2 (b) (i) Reference to a material => includes a reference to(i) Reference to a material => includes a reference to mixtures or combinations of that material ormixtures or combinations of that material or substance with other materials or substancessubstance with other materials or substances Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 23 substance with other materials or substancessubstance with other materials or substances (ii) Reference to goods of a given material or substance(ii) Reference to goods of a given material or substance includes goods consisting wholly or partly of suchincludes goods consisting wholly or partly of such material or substancematerial or substance (iii) Classification of goods consisting of more than one(iii) Classification of goods consisting of more than one material or substance => Rule 3material or substance => Rule 3 Rule 3 : Classification under two orRule 3 : Classification under two or more headingsmore headings (a)(a) Most specific descriptionMost specific description (b)(b) Mixtures / Composite goods consisting of differentMixtures / Composite goods consisting of different materials or made up of different components / Goodsmaterials or made up of different components / Goods put up in sets for retail saleput up in sets for retail sale Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 24 put up in sets for retail saleput up in sets for retail sale (c) Heading which occurs last in numerical order among(c) Heading which occurs last in numerical order among those which equally merit considerationthose which equally merit consideration Rule 3 (a) :Rule 3 (a) : Most specific descriptionMost specific description What is ‘most specific’?What is ‘most specific’? •• Tufted textile carpets identifiable for use in cars :Tufted textile carpets identifiable for use in cars : heading 57.03 and not 87.08heading 57.03 and not 87.08 Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 25 •• Unframed safety glass, shaped and identifiable for useUnframed safety glass, shaped and identifiable for use in aircraft : heading 70.07 and not 88.03in aircraft : heading 70.07 and not 88.03 •• A ‘photomask’ to be used in machinery of headingA ‘photomask’ to be used in machinery of heading 84.86 : heading 37.05 and not 8484.86 : heading 37.05 and not 84..8686 Rule 4 : AkinRule 4 : Akin •• Only if not possible with recourse to GIRsOnly if not possible with recourse to GIRs 1 to 31 to 3 •• Very rarely appliedVery rarely applied Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 26 •• Very rarely appliedVery rarely applied •• Kinship : description, character, purposeKinship : description, character, purpose •• SafeguardSafeguard Rule 5 : PackagingRule 5 : Packaging •• Separate classification of articlesSeparate classification of articles and wrapping materials?and wrapping materials? •• Additional to the foregoingAdditional to the foregoing Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 27 •• Additional to the foregoingAdditional to the foregoing provisionsprovisions •• Rule 5 gives the answer, unless . . .Rule 5 gives the answer, unless . . . Rule 5 (a) : Specific caseRule 5 (a) : Specific case •• Specific cases and containersSpecific cases and containers •• Conditions :Conditions : •• Suitable for longSuitable for long--term useterm use •• Specially shaped or fittedSpecially shaped or fitted •• Presented with the articles for which theyPresented with the articles for which they Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 28 •• Presented with the articles for which theyPresented with the articles for which they are intendedare intended •• Classification with such articles when of a kindClassification with such articles when of a kind normally sold therewithnormally sold therewith •• Rule does not, however, apply to containersRule does not, however, apply to containers which give the whole its essential characterwhich give the whole its essential character Rule 5 (a) : Specific casesRule 5 (a) : Specific cases ** Shaver case containing an electric shaverShaver case containing an electric shaver ** Binocular case presented with a pair ofBinocular case presented with a pair of binoculars, but packed separatelybinoculars, but packed separately Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 29 binoculars, but packed separatelybinoculars, but packed separately ** But what about the following?But what about the following? Rule 5 (a) : Specific casesRule 5 (a) : Specific cases Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 30 Rule 5 (b)Rule 5 (b) •• Subject to the provisions of Rule 5 (a)Subject to the provisions of Rule 5 (a) •• Presented with the goods thereinPresented with the goods therein •• Of a kind normally used for packing suchOf a kind normally used for packing such Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 31 •• Of a kind normally used for packing suchOf a kind normally used for packing such goodsgoods •• Packing materials or packing containers arePacking materials or packing containers are clearly suitable for repetitive useclearly suitable for repetitive use Rule 6 : Subheading levelRule 6 : Subheading level ⇒⇒ Not applicable if there are no subdivisions :Not applicable if there are no subdivisions : e.g., heading 22.03e.g., heading 22.03 For legal purposes :For legal purposes : Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 32 •• Classification according to the terms of subheadingsClassification according to the terms of subheadings and any related Subheading Notesand any related Subheading Notes •• Mutatis mutandis, to Rules 1 to 5Mutatis mutandis, to Rules 1 to 5 •• Only subheadings at the same level are comparableOnly subheadings at the same level are comparable Rule 6 : Section and Chapter Notes (1)Rule 6 : Section and Chapter Notes (1) Relative Section and Chapter Notes also apply,Relative Section and Chapter Notes also apply, unless the context otherwise requiresunless the context otherwise requires Note 1 to Section I : ‘Any reference (…) to aNote 1 to Section I : ‘Any reference (…) to a particular genus or species of an animal, exceptparticular genus or species of an animal, except where the context otherwise requires, includes awhere the context otherwise requires, includes a Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 33 where the context otherwise requires, includes awhere the context otherwise requires, includes a reference to the young of that genus or species.’reference to the young of that genus or species.’ Lamb :Lamb : 01.0401.04 Live sheep and goatsLive sheep and goats 0104.100104.10 -- SheepSheep Rule 6 : Section and Chapter Notes (2)Rule 6 : Section and Chapter Notes (2) Poults (young turkey) :Poults (young turkey) : 01.0501.05 Live (…) turkeys, ….Live (…) turkeys, …. Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 34 01.0501.05 Live (…) turkeys, ….Live (…) turkeys, …. -- Weighing not more than 185 g :Weighing not more than 185 g : 0105.120105.12 -- -- TurkeysTurkeys -- Other :Other : 0105.990105.99 -- -- OtherOther GIRs : Where do we find them?GIRs : Where do we find them? AnnexAnnex Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 35 Article 2Article 2 : Annex = integral part of ConventionAnnex = integral part of Convention AnnexAnnex National tariff and statisticalNational tariff and statistical nomenclaturesnomenclatures Rule 1Rule 1 + 2+ 2 -- 55 unlessunless Rule 2Rule 2 ExpandingExpanding scopescope Rule 5 (a)Rule 5 (a) Rule 5 (b)Rule 5 (b) Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 36 Rule 2 (b)Rule 2 (b) ↓↓ Rule 3Rule 3 Rule 3 (a)Rule 3 (a) Rule 3 (b)Rule 3 (b) Rule 3 (c)Rule 3 (c) Rule 4Rule 4 The Harmonized System (HS)The Harmonized System (HS) THANK YOU FOR YOURTHANK YOU FOR YOUR ATTENTIONATTENTION Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org 37 ATTENTIONATTENTION ANY QUESTIONS ?ANY QUESTIONS ?