EU Bases its Tariff Update on the World Customs Organization 2017 HS Changes

With the publication of “COMMISSION IMPLEMENTING REGULATION (EU) 2016/1821 of 6 October 2016 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff” on October 28, 2016, the European Union has updated its EU Tariff, also known as the Combined Nomenclature (CN).

The CN is, in essence, a list of numbers used to identify a description of goods traded with the EU.

Why is this amendment so special?

This year’s amendment is special as the 2017 EU CN amendments are based on the changes made to the international sequence of six numbers created by the World Customs Organization (WCO), known as Harmonized System (HS) Nomenclature, the universal language for identifying goods for customs control and revenue purposes.

What changes can we expect?

Every five years the WCO carries out a major update. The 2017 HS changes encompass 233 sets of amendments relating to a wide range of products and product groups, including: fish and fishery products; forestry products; antimalarial products; substances controlled under the Chemical Weapons Convention; hazardous chemicals controlled under the Rotterdam Convention; persistent organic pollutants controlled under the Stockholm Convention; ceramic tiles; newsprint; light-emitting diode lamps; monopods, bipods, and tripods; multi-component integrated circuits; and hybrid, plug-in hybrid, and all-electric vehicles.

For the EU, the WCO’s 154 customs administrations that apply these changes, and trading companies, both large and small, this will require database updates and translations. It is a big deal!

A look at the EU Tariff

The Harmonized System (HS) is the first 6 digits divided into Chapters used internationally to identify goods. The EU has two national tariff schedules, although they are usually linked and published in the same document. The Combined Nomenclature (CN) is an extension of the HS Code by 2 digits (8 digits long) that is issued for statistical purposes at export and intra-EU trade. The CN has some 10000 headings (at the 8 digit level).

Finally, there is the Tarif Intégré Communautaire; Integrated Tariff of the European Communities (TARIC), which is an extension of the CN by at least 2 digits (minimum 10 numbers long) that is used to identify goods for import control and statistical purposes.

The TARIC code is designed to show the various rules applying to specific products when imported into the EU. This includes the provisions of the harmonized system and the combined nomenclature, as well as additional provisions specified in Community/EU legislation such as tariff suspensions, tariff quotas and tariff preferences, which exist for the majority of the Community’s trading partners.

All EU Member States use the same tariff number systems, and the provisions linked to the TARIC are also harmonized within the EU.  In trade with third countries, the 10 digit TARIC code must be used in customs and statistical declarations.

Stay up-to-date with Amber Road

The EU Tariff is subject to on-going reviews, amendments and changes depending on legal, political and external factors, e.g. EU signed a new free trade agreement, or is in a dispute with a country over unfair practices and introduces additional duties. Therefore it is vitally important for traders, inside and outside the EU, to stay up-to-date with the 2017 changes.

What should importers and exporters do now?

Anyone involved in classifying goods, whether for import, export or EU trade statistical purposes, should have a good understanding of the EU and national tariffs. 

It is useful to understand the structure of EU commodity codes and how tariff classification and finding the correct commodity codes for your goods is done in the EU. We recommend understanding the rules relating to tariff classification, the GIR’s Binding Tariff rulings and international trade procedures related to commodity codes, e.g. duties, preference, prohibitions and restrictions.

Luckily, Amber Road can help simplify this classification process. Amber Road displays the EU Tariff in its entity and informs its customers about any measures relating to tariff, commercial and agricultural legislation.

We provide information on the product, any additional codes needed to determine the tariff rate, the origin of the product, potential exclusions and the tariff rate that is associated with the origin and measure type.

Amber Road’s Trade Wizards solution provides access to the most up-to-date WCO Explanatory Notes, which are designed to help you ensure correct product classification. Trade Wizards also references customs rulings and section/chapter notes, enabling you to simplify product classification while reducing the associated time and effort. Interested in learning more? Check out our Trade Wizards solution brochure.

Source: Amber Road's Global Trade Talk blog'

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