The HS on guard!

22 November 2018

As a common language for international trade, the Harmonized System plays a crucial role in the enforcement of many international conventions and agreements. The WCO has made provisions under the HS for products related to the Convention on International Trade in Endangered Species (CITES), the Rotterdam Convention, the Basel Convention, the Montreal Protocol and other Conventions relating to traded goods.

How do we use the HS to enforce or control trade in endangered species like the East African sandalwood (osyris tenuifolia) which is facing extinction and is a protected plant under CITES? In some cases, endangered species are given special mention or are included in a category of sensitive goods such as tropical wood. This helps to monitor legitimate trade and provides further powers if misclassified to evade detection.

East African sandalwood is an example of a species with some CITES protection but not mentioned specifically in the HS. While trade can’t be monitored at the international level for such species, classification knowledge is still an important tool in their protection.

Such sensitive species are often smuggled as concealed goods, but they are also traded “hidden in plain sight” as the English say. For example, when shipping illegally sourced sandalwood chips, “4401.2 - wood in chips or particles” is legally correct. So compliance checks need to target seemingly legitimate shipments as well as looking for false bottoms in trucks.

Understanding how a natural product may move through the HS as it is processed helps officers to detect trade in sandalwood and other protected species. Depending on what parts and derivatives are protected, there are many genuine classifications that may require checking for tree species. From cuttings and slips of heading 06.02 up through the tariff to finished artifacts in Chapter 97, trees and their products are legitimately classified in hundreds of subheadings. For fragrance producing trees such as the East African sandalwood, this includes classifications for essential oils and extracts if officers are to sniff out the trade.

So while separate HS classification for endangered species and other controlled goods target the HS to specifically help monitor trade, the control of trade requires knowledge of the potential classifications for controlled goods in all their forms, including those which are not singled out.

So if you are not a compliance or enforcement officer, spare a thought for your colleagues who have to add ‘tariff expert’ to the already broad skills required in tracking down those who would break the Customs laws!