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Maintenance of international Customs and trade instrument : a WCO priority

13 August 2005
Maintenance of international Customs and trade instrument: a WCO priority
Brussels, 23 August 2005

Maintaining the Harmonized System Commodity Description and Coding System (Harmonized System) is a priority for the WCO. This international product nomenclature developed and managed by the WCO is used as a basis for national Customs tariff and statistical nomenclatures by over 200 countries and Customs/economic unions world-wide, representing about 98% of global trade. The multi-purpose nature of this global Customs and trade instrument has resulted in its recognition as an indispensable tool for international trade.

Comprising 5,000 commodity groups, each identified by a six-digit code arranged in a legal and logical structure, the WCO maintains the Harmonized System by largely securing uniform interpretation and application of the nomenclature and periodical updates due to ongoing developments in technology and changes in trade patterns. This process is managed through the WCO’s Harmonized System Committee that represents the 120 Contracting Parties to the Harmonized System Convention. The Committee examines policy matters, takes decisions on classification questions, settles disputes and prepares amendments to the Harmonized System Explanatory Notes. Meeting twice a year at WCO Headquarters in Brussels, the Committee is the sole international body with authority to make classification decisions in terms of the Convention. These decisions are deemed to be approved two calendar months after the closure of the Committee’s Session, provided no “reservations” have been entered by any of the Contracting Parties to the Convention. Approved decisions may be viewed online.

At its 36th Session that will be held from 19-30 September 2005, the Committee will consider more than 50 issues, of which some of the more significant classification issues include-

  • Graduated urinary bags and meters”. Whether these articles have the character of instruments and appliances used in medical or surgical sciences (heading 90.18), or whether they should be classified according to their constituent material i.e., articles of plastics (heading 39.26).
  • Reach stackers”. Given the differing opinions on what constitutes a “crane” (heading 84.26), one of the underlying questions being whether or not a crane should be equipped with or have provisions for a winch and a hook.
  • Separately presented “ indoor and outdoor units of air conditioning machines”. Whether such units should be considered as parts of air conditioning machines and be classified in heading 84.15 or whether they constitute refrigerating equipment of heading 84.18. The classification of complete air conditioning machines (heading 84.15) does not present a problem.

The Harmonized System significantly reduces the costs of international trade by contributing to the harmonization of Customs and trade procedures, and the non-documentary interchange of trade data in connection with these procedures. It is also extensively used by governments, international organizations and the private sector for many other purposes such as internal taxes, trade policies, monitoring of controlled goods, rules of origin, freight tariffs, transport statistics, price monitoring, quota controls, compilation of national accounts, and economic research and analysis.