Updates to the Harmonized Commodity Description and Coding System
kick in on January 1, 2021. In this QAD Precision Report we look at
some of the most important changes.
Customs Organization (WCO) is making changes to the Harmonized
Commodity Description and Coding System. Also known as the
Harmonized System or HS, the changes are effective from January 1,
2022. The 2022 edition is a global update, as opposed to annual local,
The World Customs Organization developed the Harmonized System. The
HS nomenclature serves as the basis for customs tariffs globally. It
is used for tariff schedules as well as the compilation of
international trade statistics in more than 200 countries worldwide.
When engaging in global trade, companies must properly classify their
goods with the correct commodity codes. Almost all goods traded
internationally are classified with a six-digit code, called a
subheading. These subheadings come from the HS.
HS 2022, the seventh edition of the codes, includes 351 sets of
amendments. These cover a broad range of goods moving across borders
and make significant improvements to the Harmonized System.
The updated HS recognizes changing trade patterns. Consequently, a
major modification to HS 2022 is the introduction of visibility to a
number of high-profile product streams. These include:
Unmanned aerial vehicles (UAVs), commonly called drones
Electrical and electronic waste
Novel tobacco and nicotine-based products such as vaping products
Furthermore, the WCO has made significant changes in regard to glass
fibers and articles thereof and for metal forming machinery. According
to the WCO, these amendments acknowledge that the current subheadings
fail to represent the technological advancements in these sectors. The
current subheadings may result in potential classification
difficulties and a lack of trade statistics.
The classification of multi-purpose intermediate assemblies is one
focus area for the future. However, the HS 2022 edition includes one
important example of such a product. Flat panel display models will be
classified as a product in their own right. This amendment simplifies
classification of these modules by removing the need to identify final use.
Health and safety has also featured in the amendments. The WCO has
implemented changes to acknowledge the dangers of delays in the
deployment of tools for the rapid diagnosis of infectious diseases in
outbreaks. This has resulted in modifications to the provisions for
such diagnostic kits to simplify classification.
A key area for customs authorities is to assist in the fight against
terrorist activities. Therefore, HS 2022 includes new subheadings for
dual use goods that criminals or other bad actors could divert for
unauthorized use. Examples include radioactive materials and
biological safety cabinets. This update also applies to items required
for the construction of improvised explosive devices, such as detonators.
The WCO has also made updates to goods specifically controlled under
various Conventions. The 2022 edition establishes new subheadings for:
Chemicals controlled under the Chemical Weapons Convention (CWC)
Hazardous chemicals controlled under the Rotterdam Convention
Persistent organic pollutants, known as POPs, controlled under
the Stockholm Convention.
QAD Precision Import Management offers specialized tools to assist
importers remain compliant with global trade laws, including the
correct commodity codes. By correctly classifying their goods,
importers can avoid penalties while reducing costs.
QAD Precision’s automated import management software provides access
to the Harmonized Commodity Description and Coding System (HS).
Additionally, the import management solution offers ongoing access to
current country-specific tariffs.
MANAGEMENT: THE IMPORTANCE OF CORRECT CLASSIFICATION
IMPORT CLASSIFICATION: 5 LESSONS LEARNED
A GLOBAL TRADE COMPLIANCE PROGRAM