COMMODITY CLASSIFICATION SYSTEM

• COMMODITY CLASSIFICATION

  It deals with the classification of products imported into and exported from the Philippines which is provided in Section 1611 of the Customs Modernization and Tariff Act (CMTA) through the use of the common product nomenclature used exclusively by the members of ASEAN which is the ASEAN Harmonized Tariff Nomenclature (AHTN).
• Developed and being maintained by the World Customs Organization (WCO)
• An amalgamation of the Customs Cooperation Council Nomenclature (CCCN) and the Standard International Trade Classification (SITC), Revision 2
• Entered into force in January 1, 1988.
• To ensure harmonization, Contracting Parties must employ ALL 4 and 6 - digit provisions and the international rules and notes without deviation
• Maintenance of the HS includes measures to secure uniform interpretation of the HS and its periodic updating in light of developments in technology and changes in trade patterns
• The Harmonized System Committee examines policy matters, takes decisions on classification questions, settles disputes, prepares amendments to the Explanatory Notes and updates the HS Nomenclature.
• 104TH Members of the HS Convention
• The Philippine’s Instrument of Accession to the International Convention on the HS was deposited and entered into force on June 25, 2001, signed by former President Joseph E. Estrada and concurred by the Senate.
• The intergovernmental commitment of the contracting party by its provisions, one of which is to agree to use the HS up to sixth digit level as the basis for their national customs tariff and statistical nomenclature.
• SIGNIFICANCE OF THE HS IN OUR TARIFF AND CUSTOMS CODE

  
  

  The Philippines formally adopted the HS in 1983 and came into force on July 1, 1988 with per NEDA Board Resolution in November 1987.

  
  

  l Executive Order 688 of May 1, 1981 mandating the Tariff Commission to align the TCCP (now CMTA) on future amendments of the CCCN (now HS)
• HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM (HS) USES:

  1. Tariff Nomenclature

  2. Statistical Nomenclature

  3. Base for Economic Classification (Market Surveys and Data Collection)

  4. Multipurpose Nomenclature by International Unions of Shipping and Transport Associations

  5. Rules of Origin (Preferential and Non-Preferential)

  6. Basis for Trade Negotiations
• STRUCTURE

  21 Sections (Section I to XXI)

   

  96 Chapters (2-digit)

   

  1, 222 Headings (4-digit)

   

  5, 387 Subheadings (6-digit)

   

  *General Interpretative Rules
• LEGAL TEXTS OF THE HARMONIZED SYSTEM

  General Interpretative Rules

  Section Notes

  Chapter Notes

  Subheading Notes

  Headings

  Subheadings
• LEGAL NOTES: SECTION, CHAPTER, AND SUBHEADING NOTES

  • Notes can be:
  • INCLUSION/COVERAGE
  • EXCLUSION
  • DEFINITION
• HS AMENDMENTS

  • Interval of four to six years (1192, 1996, 2002, 2007, 2012, 2017)
  • Latest is 2022; 351 sets of Amendments
  • Examples:
  • NEW HEADING 88.06 (Unmanned Aircraft)
  • DELETED HEADING 81.07 (Cadmium and Articles)
  • NEW SUBHEADING 0410.10 (Edible Insects)
  • NEW NOTE 5 TO CHAPTER 85 (Definition of “Smartphone”)
• THE ASEAN HARMONIZED TARIFF NOMENCLATURE (AHTN)

  • The AHTN is an 8-digit product nomenclature based on the Harmonized System
  • It involves the alignment of the national tariff requirements of the ASEAN member country
  • The AHTN is an essential component of the ASEAN Agreement on Customs signed on March 01, 1997
• USES OF THE AHTN

  • As a uniform tariff nomenclature within the ASEAN.

  As a base for preferential tariff purposes in AFTA.

  As a base for uniform data collection.
• THE AHTN PROTOCOL

  • Define as the legal framework governing the implementation of the AHTN, and its implementing rules and explanatory notes.
  • The AHTN Protocol was signed on August 07, 2003 by the ASEAN Finance Ministers.
• 4101.00.00 - Heading
• 4101.10.00 - 1 dash HS sub
• 4101.01.00 - 2 dash HS sub
• 4101.11.00 - 2 dash HS sub
• 4101.11.10 - 2 dash HS sub - 3 dash ASEAN sub
• 4101.11.11 - 2 dash HS sub - 4 dash ASEAN sub
• 4101.00.10 - 1 dash ASEAN sub
• 4101.00.01 - 2 dash ASEAN sub
• 4101.10.10 - 1 dash HS sub - 2 dash ASEAN sub
• 4101.10.11 - 1 dash HS sub - 3 dash ASEAN sub
• 4101.01.01 - 2 dash HS sub - 4 dash ASEAN sub
• The ASEAN Director-General (ADG) of Customs shall be responsible for monitoring, reviewing, supervising all aspects relating to the implementation of the AHTN Protocol.
• The ASEAN Finance Ministers Meeting shall be the forum for all decisions relating to the implementation of the AHTN Protocol.
• The ASEAN Secretariat shall provide the necessary support for supervising, coordinating and reviewing the implementation of the AHTN Protocol and shall assist the ADG of Customs on matters relating thereto.
• Supplementary Explanatory Notes (SEN)

  Serves as a technical reference in the classification of goods described in the AHTN subheadings to provide meaning/description of unfamiliar terms in the AHTN and to avoid overlapping descriptions between ASEAN subheadings.
• ALPHABETICAL INDEX

  • An alphabetical list of the articles mentioned in the AHTN and SEN.

  Facilitates the location of references in the AHTN or the SEN to any products or articles mentioned therein.
• CORRELATION TABLE

  An essential guide for the transposition of the HS2012 8-digit HS based Code (TCCP) to the HS2017 8-digit AHTN (CMTA)