1. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org1 HS 2007 Technology Sector Introduction of the HS 2007 and its Impact on the IT Sector Ron Heller WCO Tariff and Trade Affairs Directorate

2. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org2 HS 2007 Technology Sector Excerpt from the Preamble Desiring to facilitate international trade, Desiring to facilitate international trade, Desiring to facilitate the collection, comparison and analysis of statistics, in particular those on international trade, Desiring to facilitate the collection, comparison and analysis of statistics, in particular those on international trade, Desiring to reduce the expense incurred by redescribing, reclassifying and recoding goods as they move from one classification system to another in the course of international trade and to facilitate the standardization of trade documentation and the transmission of data, Desiring to reduce the expense incurred by redescribing, reclassifying and recoding goods as they move from one classification system to another in the course of international trade and to facilitate the standardization of trade documentation and the transmission of data, Considering that changes in technology and the patterns of international trade require extensive modification ot the Convention on nomenclature for the Classification of Goods in Customs tariffs, done at Brussels on 15 December 1950, Considering that changes in technology and the patterns of international trade require extensive modification ot the Convention on nomenclature for the Classification of Goods in Customs tariffs, done at Brussels on 15 December 1950, Considering the importance of accurate and comparable data for the purposes if international trade negotiations,… Considering the importance of accurate and comparable data for the purposes if international trade negotiations,…

3. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org3 HS 2007 Technology Sector Article 9 The Contracting Parties do not assume by this Convention any obligation in relation to rates of Customs duty.

4. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org4 HS 2007 Technology Sector Development of the HS

5. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org5 HS 2007 Technology Sector Nomenclatures Consulted In development of the HS Closely Related to CCCN CCC Nomenclature SITC Rev. 2 Customs Tariff of Japan Tariff Nomenclature for the Latin American FTA (NABALALC) Nomenclature of Goods for the External Trade Statistics of the (European) Community and Statistics of Trade between Member States (NIMEXE)./..

6. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org6 HS 2007 Technology Sector Nomenclatures Consulted (cont.) Not closely related to CCCN Customs Tariff of Canada, Import and Export Commodity Classifications Tariff Schedules of the United States Annotated (TSUSA), Schedule B International Union of Railways Standard Commodity Nomenclature (NUM) International Air Transport Association Worldwide Air Cargo Commodity Classification (WACCC) Freight Tariff of the Association of West India Trans-Atlantic Steamship Lines (WIFT) Standard Transportation Commodity Code (STCC)

7. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org7 HS 2007 Technology Sector HS Revision Process

8. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org8 HS 2007 Technology Sector Proposal Secretariat Review Sub-Committee HS Committee Council Draft Recommendation RecommendationImplementation 2.5 years

9. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org9 HS 2007 Technology Sector HS COMMITTEE FINALIZES TEXTS (Art. 7) HS COMMITTEE FINALIZES TEXTS (Art. 7) PREPARES A RECOMMENDATION FOR ADOPTION BY WCO COUNCIL (Art. 8) PREPARES A RECOMMENDATION FOR ADOPTION BY WCO COUNCIL (Art. 8) RECOMMENDED AMENDMENTS NOTIFIED TO CONTRACTING PARTIES (Art. 16.1) RECOMMENDED AMENDMENTS NOTIFIED TO CONTRACTING PARTIES (Art. 16.1) OBJECTIONS, IF ANY, TO BE FILED IN SIX MONTHS (Art. 16.3) OBJECTIONS, IF ANY, TO BE FILED IN SIX MONTHS (Art. 16.3) FINAL LIST OF RECOMMENDED AMENDMENTS NOTIFIED THEREAFTER (Art. 16.3) FINAL LIST OF RECOMMENDED AMENDMENTS NOTIFIED THEREAFTER (Art. 16.3) IMPLEMENTATION DATE (1 JANUARY - ABOUT TWO YEARS LATER) (Art. 16.4) IMPLEMENTATION DATE (1 JANUARY - ABOUT TWO YEARS LATER) (Art. 16.4) ALL HS CONTRACTING PARTIES OBLIGED TO IMPLEMENT AMENDMENTS IN CUSTOMS TARIFFS AND FOR TRADE STATISTICS (Art. 16.5) ALL HS CONTRACTING PARTIES OBLIGED TO IMPLEMENT AMENDMENTS IN CUSTOMS TARIFFS AND FOR TRADE STATISTICS (Art. 16.5)

10. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org10 HS 2007 Technology Sector Harmonized System and IT Agreement

11. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org11 HS 2007 Technology Sector Annex: Modalities and Product Coverage Any Member of the World Trade Organization, or State or separate customs territory in the process of acceding to the WTO, may participate in the expansion of world trade in information technology products in accordance with the following modalities: 1. Each participant shall incorporate the measures described in paragraph 2 of the Declaration into its schedule to the General Agreement on Tariffs and Trade 1994, and, in addition, at either its own tariff line level or the Harmonized System (1996) (HS) 6-digit level in either its official tariff or any other published versions of the tariff schedule, whichever is ordinarily used by importers and exporters. Each participant that is not a Member of the WTO shall implement these measures on an autonomous basis, pending completion of its WTO accession, and shall incorporate these measures into its WTO market access schedule for goods.

12. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org12 HS 2007 Technology Sector

13. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org13 HS 2007 Technology Sector

14. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org14 HS 2007 Technology Sector

15. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org15 HS 2007 Technology Sector Recommendation of 25 June 1999 (2002 Amendments to the HS)

16. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org16 HS 2007 Technology Sector 85.42Electronic integrated circuits and microassemblies 8542.10Cards incorporating an electronic integrated circuit (smart cards) 2002 Amendments

17. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org17 HS 2007 Technology Sector 85.25...Television cameras; still image video cameras and other video camera recorders; digital cameras. 8525.30Still image video cameras and other video camera recorders. ; digital cameras. 2002 Amendments

18. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org18 HS 2007 Technology Sector Recommendation of 26 June 2004 (2007 Amendments to the HS)

19. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org19 HS 2007 Technology Sector REVIEW SUB-COMMITTEE (March 2004) REVIEW SUB-COMMITTEE (March 2004) HS COMMITTEE (May 2004) HS COMMITTEE (May 2004) COUNCIL RECOMMENDATION (June 2004) COUNCIL RECOMMENDATION (June 2004) FINAL LIST OF AMENDMENTS AFTER DELETING OBJECTIONS (January 2005) FINAL LIST OF AMENDMENTS AFTER DELETING OBJECTIONS (January 2005) IMPLEMENTATION - 1 January 2007 IMPLEMENTATION - 1 January 2007

20. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org20 HS 2007 Technology Sector 1992 AMENDMENT –MAINLY EDITORIAL –# of HS CODES : 5019 to 5018 1996 AMENDMENT –393 SETS OF AMENDMENTS –# of HS CODES : 5018 to 5113 2002 AMENDMENT –374 AMENDMENTS APPROVED –# of HS CODES : 5113 to 5224 2007 AMENDMENT –354 AMENDMENTS APPROVED –# of HS CODES : 5224 to 5052

21. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org21 HS 2007 Technology Sector Heading 84.43 Before 2007, the classification of printers, especially multifunctional printers, led to difficulties and controversies. Traditional printers in 84.43 Traditional printers in 84.43 Some ink-jet printers in 84.43 Some ink-jet printers in 84.43 Consumer-type facsimile (fax) machines in 85.17 Consumer-type facsimile (fax) machines in 85.17 But…

22. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org22 HS 2007 Technology Sector Radio-telegraphic facsimile receivers in 85.27. Radio-telegraphic facsimile receivers in 85.27. Generally, PC printers in 84.71 (pursuant to Note 5(D) to chapter 84); whereas one large-scale digital printing device was classified by the HSC in 84.43. Generally, PC printers in 84.71 (pursuant to Note 5(D) to chapter 84); whereas one large-scale digital printing device was classified by the HSC in 84.43. Photocopiers cited in 90.09 (2002 HS), but no consensus on the classification of digital copiers or multifunctional printer/fax/copier machines. Photocopiers cited in 90.09 (2002 HS), but no consensus on the classification of digital copiers or multifunctional printer/fax/copier machines. Heading 84.43

23. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org23 HS 2007 Technology Sector Heading 84.43 In 2007, heading 84.43 covers : all types of printers all types of printers all types of copying machines all types of copying machines all facsimile (fax) machines all facsimile (fax) machines combinations of the above combinations of the above

24. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org24 HS 2007 Technology Sector A home for all multifunctional printing machines, machines that perform two or more of the functions of -- printing printing copying copying facsimile transmission facsimile transmission Heading 84.43

25. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org25 HS 2007 Technology Sector Subheading 8443.31 covers multifunctional printing machines, capable of connecting to an ADP machine or to a network*. Heading 84.43 * Network includes a telephone network (voice or data quality).

26. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org26 HS 2007 Technology Sector All telephones All telephones (mobile phones transferred from heading 85.25) (mobile phones transferred from heading 85.25) Base stations (for mobile phone networks) Base stations (for mobile phone networks) Machines for the reception, conversion and transmission or regeneration of voice, images Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus (from 84.71 and 85.25) Heading 85.17 Covers --

27. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org27 HS 2007 Technology Sector But this type But this type Heading 85.17 (con.) What are base stations of 8517.61? Not this type Not this type

28. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org28 HS 2007 Technology Sector Heading 85.25 Transmission apparatus for radio-broadcasting or television. Electronic cameras, such as TV cameras, digital still image and motion picture cameras. Simplified structure : All cameras together in one subheading (8525.80) However, no longer a mention of radio-telephony and radio-telegraphy (moved to 85.17).

29. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org29 HS 2007 Technology Sector Monitors Monitors Projectors Projectors Television receivers Television receivers Heading 85.28 In 2007, brings together : In 2007, excluded from 84.71 By Note 5(v) to Chapter 84

30. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org30 HS 2007 Technology Sector Monitors with cathode-ray tubes Monitors with cathode-ray tubes For automatic data processing machines For automatic data processing machines Other Other Other monitors Other monitors For automatic data processing machines For automatic data processing machines Other Other Projectors Projectors For automatic data processing machines For automatic data processing machines Other Other Television receivers Television receivers Without video display or screen Without video display or screen Other, colour Other, colour Other, black and white or monochrome Other, black and white or monochrome Heading 85.28 New structure -- (from 84.71) (from 85.28) (from 84.71) (from 85.28) (from 84.71) (from 85.28) (from 85.28) (from 85.28) (from 85.28)

31. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org31 HS 2007 Technology Sector Industry-Government Collaboration During the Third HS Review Cycle

32. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org32 HS 2007 Technology Sector Industry-Government Collaboration During the Third HS Review Cycle

33. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org33 HS 2007 Technology Sector New text for combined heading : Sound recording and reproducing apparatus Simpler subheading structure Simpler subheading structure Heading 85.19 Heading 85.19 (2002 HS) Heading 8520 (2002 HS)

34. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org34 HS 2007 Technology Sector All media, whether or not recorded, i.e. Cards with magnetic stripe Cards with magnetic stripe Magnetic media (discs, cassettes, video tapes, etc.) Magnetic media (discs, cassettes, video tapes, etc.) Optical media (CD, DVD) Optical media (CD, DVD) Flash memories" (cards, sticks, etc.) Flash memories" (cards, sticks, etc.) Smart cards with a built-in chip Smart cards with a built-in chip Heading 85.23 (2002 HS) Heading 85.24 (2002 HS) Heading 85.23 (2007 HS) Heading 85.23 Chapter Note 4(a) Chapter Note 4(b)

35. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org35 HS 2007 Technology Sector Note 6 to chapter 85 (1996 amendment) Records, tapes and other media of heading 85.23 or 85.24 remain classified in those headings when presented with the apparatus for which they are intended. This Note does not apply to such media when they are presented with articles other than the apparatus for which they are intended.

36. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org36 HS 2007 Technology Sector Existing Note 6 to Chapter 85 deleted. Consequently -- Records, tapes and other media are to be classified according to the GRIs. Records, tapes and other media are to be classified according to the GRIs. If presented separately, in new 85.23 If presented separately, in new 85.23 If part of a set put up for retail sale, with the apparatus they accompany (GRI 3(b)) If part of a set put up for retail sale, with the apparatus they accompany (GRI 3(b)) For example,

37. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org37 HS 2007 Technology Sector Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in Note 9 (c) to this Chapter; parts and accessories New heading 84.86

38. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org38 HS 2007 Technology Sector New heading 84.86, Equipment for the manufacture of semiconductor devices and flat panel displays -- brings together machinery and equipment from many locations in the HS. 8421.19, 8424.89, 8456.10, 8456.91, 8456.99, 8462.21, 8462.29, 8479.89, 8514.10, 8514.20, 8514.30, 8543.11, 8543.89, 9010.41, 9010.42, 9010.49 … and others …such as --

39. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org39 HS 2007 Technology Sector WCO SECRETARIATS DELIVERABLES Correlation tables Correlation tables HS 2007 Nomenclature HS 2007 Nomenclature Booklet Amendments to the HS Booklet Amendments to the HS Explanatory Notes (new lay out) Explanatory Notes (new lay out) Information to UNSD and WTO Information to UNSD and WTO./..

40. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org40 HS 2007 Technology Sector WCO SECRETARIATS DELIVERABLES Alphabetical Index and Classification Opinions Alphabetical Index and Classification Opinions HS Commodity Data Base HS Commodity Data Base Laboratory Guide Laboratory Guide E-learning modules on HS 2007 amendments E-learning modules on HS 2007 amendments Workshops in each WCO region Workshops in each WCO region

41. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org41 HS 2007 Technology Sector NOMENCLATURE AND CLASSIFICATION: Amendments to the Harmonized System Nomenclature Effective from 1 January 2007. WCO: February 2006 Correlation Tables Contained In :

42. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org42 HS 2007 Technology Sector MEMBERS TASKS Translation (in many countries) Translation (in many countries) Amend Customs tariff and statistical nomenclature Amend Customs tariff and statistical nomenclature Update Explanatory Notes Update Explanatory Notes Publish amended publications Publish amended publications./..

43. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org43 HS 2007 Technology Sector MEMBERS TASKS Tariff negotiations Tariff negotiations Complete legal procedures Complete legal procedures Revise affected regulations etc. Revise affected regulations etc. Provide capacity building Provide capacity building

44. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org44 HS 2007 Technology Sector Looking Ahead

45. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org45 HS 2007 Technology Sector Heading 85.42 New structure Electronic integrated circuits Electronic integrated circuits Processors and controllers Processors and controllers Memories Memories Amplifiers Amplifiers Other Other Parts Parts Multichip integrated circuits [Defined by Note 5(iii) to Chapter 85]

46. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org46 HS 2007 Technology Sector Note 8 to Chapter 85 and MCP Agreement

47. March 2007 Copyright © 2007 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org copyright@wcoomd.org47 HS 2007 Technology Sector