Proposed Modification to the Harmonized Tariff Act

May 23, 2011

The United States International Trade Commission, in conjunction with the World Customs Organization (WCO) has proposed a large number of modifications to the United States Harmonized Tariff System. The majority of changes occur in numerical headings and subheadings of the tariff although some chapter notes have been amended. However for the most part, rates of duty for any given product are revenue neutral and will not change. In a small number of cases a rate change will take place. The new rate will be that which currently applies to the majority of trade in that commodity. These modifications are “proposed” to take place on January 1, 2012.

In addition to the update of your current classifications, the current rules of origination to all of the free trade agreements will have to be amended to reflect the new headings and subheadings. We feel certain that these amendments, which must be agreed upon and coordinated with the particular trading partner(s) will never make the January 1, 2012 date. I am certain that we will have clarification about this as the year progresses.

This International Trade Commission proposal, titled as above, is 262 pages in length. The first part is background with the substance of the document contained in the three appendices, which are:

• Appendix B         Recommended Modification to the Harmonized Tariff System.
• Appendix C         Correlation Table, sorted by proposed HTS (2012) headings and subheadings.
• Appendix D         Correlation Table, sorted by current HTS (2011) headings and subheadings.

Although 52 out of the 99 Harmonized Tariff Chapters have been modified to a greater or lesser degree, the majority of the modifications are included in Chapters 3 to 24 which mostly cover food products. Modifications take place in the following chapters:

Harmonized Tariff
      Section

• I            (Animals & Animal Products) Ch 3, 4
• II          (Vegetable Products) Ch 6, 7, 8, 9, 10, 11, 12
• III         (Fats & Oils) Ch 15
• IV          (Prepared Foodstuffs) Ch 16, 17, 20, 21, 24
• V            (Mineral Products) Ch 25, 27
• VI          (Chemical Products) Ch 28, 29, 30, 37, 38
• VIII      (Hides and Skin Products) Ch 41, 42
• IX          (Wood Products) Ch 44
• X            (Cellulosic Material) Ch 47, 48
• XI          (Textiles) Ch 56, 58, 61, 62, 63
• XII        (Footwear and Assorted Products) Ch 64, 65
• XIII      (Stone, Cement, glass) Ch 68
• XIV       (Precious & Semi precious stones) Ch 71
• XV         (Base Metal) Ch 73, 74, 76, 82
• XVI       (Electrical Machinery) Ch 84, 85
• XVII     (Vehicles & Aircraft) Ch 87
• XVIII   (Optical & Photographic) Ch 90, 91, 92
• XIX        (Arms & Ammunition) Ch 93
• XX          (Miscellaneous Manufactures) Ch 94, 95, 96
• XXII      (Special Classifications) Ch 98, 99

We suggest that you review this proposal and take note of modification to your imports and exports (Schedule B will be affected). The proposal may be found at:

www.usitc.gov/tariff_affairs/hts_documents/1205-7finalreport

We will keep you advised as this proposed modification to the HTS advances, although we do believe that this is the final version and that it will be implemented as proposed.

Michael Ford
Vice President, Regulatory & Quality