ITC Issues Final Report on Proposed HTS Changes for 2012 (Part 1)

WCO-Recommended HTS Changes Set to Take Effect on January 1, 2012

The HTS changes in this report will reflect World Customs Organization (WCO) updates and clarifications to the international Harmonized System (HS). The recommendations represent the 4th set of changes in the WCO's long-term program to periodically review the HS nomenclature structure. The WCO's HS recommendations are scheduled to become effective on January 1, 2012.²

The U.S. will try to implement its HTS changes on that same date, by proclamation; however, ITC sources state that there could be a delay, as such HTS modifications can take effect no sooner than 30 days after the proclamation is published in the Federal Register.

WCO-Recommended Changes Intended to be Rate Neutral

The ITC report states that the recommended HTS changes that will result from this review cycle are intended to ensure substantial rate neutrality (i.e. continue existing duty treatment).Note that U.S. Customs and Border Protection (CBP) and other federal agencies may have identified conforming HTS changes (additional tariff lines, etc.) needed for this goal.

Changes Include 204 Amendments in 54 Different HTS Chapters

The final report contains 204 HTS amendments in 54 chapters, affecting 108 different headings. ITC states these changes are intended to update the nomenclature or clarify the classification of particular goods. The affected chapters include:

Largest Volume of Changes Affect Foods, Sanitary Goods, Biodiesel Fuels, Etc.

The largest volume of such amendments arose from a single request by the Food and Agriculture Organization (FAO) for separate identification of food products in chapters 1 through 21. In addition, a number of amendments arose from a U.S. proposal to create a new heading 9619 to cover sanitary goods, such as diapers, tampons, and the like. The ITC also states that also of particular economic and technological importance are new amendments providing for separate identification in the HS for biodiesel fuels, nickel-metal hydride batteries (used in hybrid motor vehicles), and lithium-ion batteries (used to power consumer electronics products).

Broker Power to Cover All Changes in Upcoming Summaries

This is Part 1 of a multi-part series of summaries on the ITC's final report. Part 1 provides an overview of the HTS chapters that will be affected by the proposed modifications. See future issues of ITT for summaries on all proposed modifications of the HTS.

¹Section 1205 directs the ITC to keep the HTS under continuous review and to recommend to the President modifications thereto, (1) when amendments to the international Convention on the Harmonized Commodity Description and Coding System (Harmonized System, International HS), and the Protocol thereto, are recommended by the World Customs Organization (WCO) for adoption; and/or (2) as other circumstances warrant.

²ITC sources state that the 60-day “legislative day” Congressional layover period that began on the 2010 date the President submitted this final report to Congress has expired. Sources added that few changes resulted from the U.S. Trade Representative's review of the recommended HTS changes before the report was sent to Congress.

(Note that “legislative days” exclude Saturdays and Sundays (unless Congress is in session) and any other day on which either the House or the Senate is not in session.)

(See ITT's Online Archives or 03/09/11 news, 10030915, for BP summary of the ITC announcing its investigation on proposed changes to the HTS for January 2012.)

(ITC Inv. No. 1205-7 (Final Report), dated June 2010)