A short history lesson and a plan for the future

back of tightly stacked cargo containers

The Harmonized System (HS) is maintained by the World Customs Organization (WCO). Among its other activities, WCO also has the duty to update the HS codes every five years. These changes are called revisions. Under the 1983 HS Convention Article 16, WCO provides an updated amendment, guidelines, and recommendation of an “Internationally Standardized and Recognized System of Names and Numbers”.

The HS was introduced way back in 1988 and has been adopted by almost every country. Since its inception, it has undergone numerous changes in the classification of products. The revisions came into effect starting in 1996 and with the most current one in 2017, and as previously reported out the new 2022 HS numbers will take effect on January 1, 2022.

The HTS comprises a hierarchical structure for describing all goods in trade for duty, quota, and statistical purposes. This structure is based upon the international Harmonized Commodity Description and Coding System (HS), the 4- and 6-digit HS product categories are subdivided into 8-digit unique U.S. rate lines and 10-digit non-legal statistical reporting categories. 

Enough of the history lesson, now let’s discuss the work that needs to be researched and completed to ensure you and your business are ready for the changes ahead.

New products are constantly being developed for the business and consumer worlds with technology leading the way to many of these changes as well as the desired need for modifications in many important and critical goods that are controlled. 

Simply put: many products that did not exist prior to the past few years now require that governments consistently ensure their systems are up to date to keep up with the constant introduction of new materials and items.

As these updates are brought to light, these same changes bring additional modifications to the governments around the world and their need to keep up with the rapid changes with their tariffs. The classifications of products and bringing forth the changes to their respective economies keep products flowing – quite simply, this is known as trade facilitation.

These changes for 2022 are a major update and companies (from all industries) around the world need to set up their plans for success. Make it a priority in 2021 to spend the right amount of time to research these changes, update all products that have been impacted, notify their suppliers, customers, service providers, and of course all operating systems that record the products and corresponding HS number.  Please pay extra attention to any of your products that may be listed in a specific Customs ruling, these changes can also impact the delicate area of how you classify your goods.

Help is available from the WCO by means of a new correlation table that is available for your review. This table calls out the changes to HS numbers that have been impacted and provides a description of the change to assist you further in understanding the impact.

As we start to end the year of 2020 that brought everyone many challenges, this is one important work effort that we need to make sure we spend the right amount of time researching and communicating. Let’s start 2021 off with a good plan that delivers the best that we can offer.

If you have any questions on any of the content presented please do not hesitate to reach out and connect with me.