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WCO-Recommended HTS Changes Expected to Take Effect in Late Jan 2012

Officials at the International Trade Commission state that the Proclamation to amend the Harmonized Tariff Schedule to implement hundreds of WCO-recommended tariff changes is "at the White House" and is expected to be signed by the President by the end of the year. Once it is signed, it will be published in the Federal Register and take effect 30 days after its Federal Register publication, which would likely be in the late January 2012 timeframe.

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Jan 1 HTS to Be Posted w/o Changes Soon, then Report w/Changes Later

The ITC is expected to post the 2012 HTS without the WCO-recommended changes on December 29, or 30, 2011. Once the Proclamation containing the WCO-recommended tariff changes is signed, the ITC expects to issue a report containing those tariff changes. The online ITC HTS will be updated for the WCO-recommended changes once the Proclamation is in effect.

Upcoming HTS Changes Are due to WCO Recommendations

The tariff changes are needed to conform the U.S. Harmonized Tariff Schedule (HTS) to the World Customs Organization’s International Convention on the Harmonized Commodity Description and Coding System (Harmonized System, or HS) and HS Committee decisions. In addition, certain changes may be due to U.S. Customs and Border Protection (CBP) requests for additional tariff numbers to continue existing duty treatment for particular goods once the WCO changes are implemented.

HTS Changes Aim to be “Substantially Rate Neutral”

According to the ITC, as required by law1, these changes are required to be “substantially rate neutral.” As a result, any modification that would change a rate of duty must be consequent to, or necessitated by, the WCO- recommended nomenclature changes.

Many Products Affected, Including Food and Ag

54 chapters affected. WCO officials have stated that there were a total of 225 amendments (affecting 5,205 tariff numbers) for the 2012 international HS. For the U.S. HTS, the following chapters are affected by the 2012 WCO-recommended changes:

1, 2, 3, 4, 6, 7, 8, 9,10, 11, 27, 28, 29, 30, 37, 38, 41, 42, 44, 47, 48, 56, 58, 61, 62, 63, 64, 65, 68, 71, 73, 74, 76, 82, 84, 85, 87, 90, 91, 92, 93, 94, 95, 96, 98, and 99

Food and ag goods. A large number of changes were made to facilitate the use of the HS for the compilation of food security data and agriculture (including forestry and fisheries) statistics. 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 1-21.

Diapers, biodiesel, batteries. The 2012 HS also creates a new heading for hygiene absorbent products, such as infant diapers, adult incontinence products, feminine sanitary products, etc. Currently, these products are classifiable in the international HS under headings 48.18, 56.01, 61.11 or 62.09 according to their constituent materials. However, as of January 1, 2012, these hygiene absorbent products, of any material, will fall under HS heading 96.19.

In addition, the ITC's June 2010 final report on the proposed 2012 HTS changes to implement the WCO recommendations, stated that amendments of particular economic and technological importance include those providing separate identification in the international HS for biodiesel fuels, nickel-metal hydride batteries (used in hybrid motor vehicles), and lithium-ion batteries (used to power consumer electronics products).

2010 ITC report 99.9% accurate for chapters 1-97. Government officials state that the ITC’s 2010 report is 99.9% accurate when compared to the text of the pending Proclamation for HTS Chapters 1-97, which are both detailed to the 8-digit level. For these chapters, only some typos and glitches have been fixed.

However, a large number of conforming changes have been added since the 2010 report to HTS Chapters 98 and 99, so that they align with the Chapter 1-97 changes.

See ITT's Online Archives 11111719 for compiled list of the 2010 report's WCO-recommended HTS changes.

1Section 1205(d) of the Omnibus Trade and Competitiveness Act of 1988

(See ITT's Online Archives 11120220 for summary stating that the WCO-recommended tariff changes will miss a Jan 1, 2012 start date.

See ITT's Online Archives 11060918, 11061006, 11061301, 11061411, 11061508, 11061607, 11061717, and 11062006 for Part 1 (Overview), Part 2 (Chapters 1-5), Part 3 (Chapters 6-15), Part 4 (Chapters 16-24), Part 5 (Chapters 25-38), Part 6 (Chapters 39-63), and Part 7 (Chapters 64-96), and Part 8 (Chapters 97-99) for series of summaries on the ITC’s 2010 report of the 2012 HTS tariff changes.)

2010 ITC Final Report (Inv. No. 1205-7) entitled “Proposed Modifications to the Harmonized Tariff Schedule of the United States” available here.