Historical Background And Evolution of the Harmonized System

Overall Goal of this training; To be able to classify all tradable goods using the provisions of the HS Nomenclature

Overall Course objectives To outline the historical background of the HS To identify the structure of the HS To apply the principles of classification-GIRS/Legal notes

lesson objectives To define different terminologies To outline the Background of the HS To identify the uses and users of the HS

DEFINITIONS Nomenclature: A system of naming and categorizing objects in a particular science, discipline or art in a given category

Definition cont..d Tariff means; A system of duties imposed by the government of a country upon goods imported or exported. A customs tariff shows how much duty is payable on imported or exported goods.

Definition cont..d Classification is the act of placing goods into the correct category. Customs Classification refers to a particular category in the Nomenclature in which a product is classified or categorized.

Definitions cont..d International trade; Exchange of goods between two or more countries. The Harmonised Commodity Description and Coding System (HS) International system for classifying goods for trade purposes

HISTORICAL BACKGROUND The Harmonized System took more than 100 years to be designed. Aim was to facilitate international trade Classification according to their alphabetical order

Historical background cont..d In 1853-1922, an International Statistical Nomenclature (ISN) Approved by an International Convention and signed by 29 countries

Historical background cont..d It consisted of 186 items, arranged in five groups; Live animals Food and beverages Raw and simply prepared materials Manufactured goods Gold and Silver

Historical background cont..d League of Nations Conference 1927 Draft Nomenclature produced 1931(Geneva Nomenclature) The Nomenclature had 991 headings grouped in 86 Chapters

Historical background cont..d The Chapters were arranged into 21 Sections Revised in 1937 Development stopped by war II

Brussels Tariff Nomenclature 1948 - European customs study group continued to work on Geneva nomenclature. 1950- Draft named Brussels Tariff Nomenclature (BTN) 1974- (BTN) renamed ‘The Customs Cooperation Council Nomenclature’ (CCCN).

CCCN CCCN had 1241 Headings Grouped into 99 Chapters Arranged in 21 Sections

CCCN CCCN is supported by: I. Explanatory Notes for official interpretation II. Alphabetical index listing III. A compendium of classification opinion

CCCN 1983 CCCN was replaced by the Harmonized Commodity Description and Coding System. 1988 The Harmonized System entered into force.

Uses of HS A common Nomenclature is used to classify goods in the course of International trade for Customs duties Statistics

Uses of HS cont..d Origin of goods Controlled goods Trade barriers

Advantages of Harmonised System Uniform and Consistent No re-classification Standardised Customs terminology Facilitate statistical analysis

HS Users Governments International Organisations Importers and exporters

Users cont..d Manufacturers Traders Shipping agents Transporters

Users cont..d Port Authorities Statisticians

HS Convention Members of WCO Use HS in the Annex Use HS as basis for Customs Administer HSC

HSC cont..d Settlement for Classification Questions and Dispute Updating HSC came in force 1 January, 1988 5019 HS codes

HS updates 1992 Editorial amendment HS codes 5018 1996 The Second update 393 sets of amendments. 5113 HS codes 2002 The Third update 374 sets of amendments. HS codes 5224

Updates 2007 Fourth update. 354 sets of amendments. 5052 HS codes 2012 Fifth update. 220 sets of amendments. 5212 HS codes.

Conclusion HS is used by Over 200 countries and economic blocks or Customs unions The Harmonised System Convention currently has 141 contracting parties as at 30th March 2012 according to HS WCO official documents.

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