August 12, 2014

Upcoming Changes to the Harmonized Tariff Schedule

By William Randolph Rucker and Mollie D. Sitkowski

The World Customs Organization (WCO) periodically revises the Harmonized Tariff Schedule (HTS) once every five years or so.  In June, the WCO adopted a Recommendation that lists the most recent proposed amendments to the HTS, which will enter into force on January 1, 2017. 

The WCO is making changes to modernize the tariff schedule, to better monitor and control trade patterns of certain goods, and to adapt the HTS to current trade patterns.  Overall, the WCO is planning to make more than 200 changes to tariff headings, subheadings, and notes.  Some examples of the proposed changes include: 

  • Amendments to better monitor and control the trade patterns of certain goods, including amendments relating to the classification of fish and fishery products, the classification of forestry products, the classification of antimalarial commodities and other pharmaceutical preparations containing ephedrine, and the classification of chemicals controlled under the Chemical Weapons Convention (the Food and Agricultural Organization of the United Nations (FAO) recommended the majority of these amendments);
  • Amendments to modernize the tariff schedule, including changes to the classification of light-emitting diode (LED) lamps, multi-component integrated circuits (MCOs), hybrid or electric vehicles, and the removal of the tariff provision for typewriters; and
  • Amendments to adapt the tariff schedule to current trade patterns, such as merging the classification of certain ceramic products and separating certain important products into their own existing or new subheadings.

At this stage of review, member states have six months to notify the WCO Secretariat of their objections to any of the recommended amendments.  This would include “deal-breaking” objections on big-ticket items of which a member state highly disapproves.  If your company finds itself greatly objecting to one of the amendments, it would be best to contact the U.S. Trade Representative (USTR), U.S. Customs and Border Protection (CBP), and the U.S. International Trade Commission (USITC), since all three agencies negotiate on behalf of the U.S. before the WCO.

In addition to the WCO’s proposed changes, the USITC is expected to release a Federal Register notice in the fall detailing its proposed changes to the HTSUS to conform to the WCO’s amendments.  This Federal Register notice will have more information concerning the classification of goods at the 8- and 10-digit level, as well as the associated duty rates.  The USITC will open a comment period so that affected importers may weigh in concerning the proposed changes.

For more information on the proposed amendments or the upcoming Federal Register notice, please contact one of the authors above or your regular contact on Drinker Biddle & Reath’s Customs and International Trade Team.

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