HS Multi-Purposes Tool

It is hard to imagine what effect a small six digit code could have on international efforts to reduce global warming; or in suppressing the activities of a criminal syndicate involved in the manufacture of synthetic drugs; or the capacity of a developing country to provide basic health care for its people.

Yet since the early 1970’s a group of highly skilled international experts at the World Customs Organization in Brussels have developed a system of goods nomenclature that enables nations to monitor goods passing across their borders and frontiers. Without it, many national regulations and international conventions would be unable to be enforced and considerable guesswork would surround bi-lateral and multi-lateral trade negotiations.

As international trade becomes more complex and governments around the world demand greater effectiveness from their Customs Administrations, nation after nation are turning toward the WCO’s Harmonized Commodity and Coding System (Harmonized System – HS) to be a central pillar of their requirement for fiscal and regulatory compliance.

The sophistication of international trade and the increasing concern at cross-border crime has seen the Harmonized System evolve into a multi purpose tool – a veritable Swiss Army knife - that provides much more than ensuring that what are "apples" in one country are not "oranges" in another.

To a customs official at a frontier post checking a road transport consignment it provides vital information to assist them to carry out their duties. Without the vital HS classification code there would be confusion, lengthy searches and delays. To other officials coping with waves of sea cargo, airfreight consignments or express mail it has become a vital partner. We can expect that this dependence will increase as 21st century commercial and social demands evolve.

At the international level, the Harmonized System is based on a hierarchy of Sections, Chapters and Headings. This has given the WCO the framework to respond to the concerns of many governments and international organizations who want to take steps to counter newly emerging problems. The creation of subheadings for ozone depleting substances, precursor chemicals to manufacture illicit drugs, hazardous wastes, endangered species, and narcotics and psychotropic substances are examples of this responsiveness to international concerns. Similar recommendations relate to the Chemical Weapons Convention.

The WCO published a new version of the Harmonized System on 1 January 2017, following a five-year review cycle.  This new instrument allows all Customs administrations to monitor and control the trade in goods, especially those having a social and environmental impact.  The nature of this review also highlights the partnerships maintained by the WCO with international organizations such as the Food and Agricultural Organization of the United Nations.  This trend should continue as new issues are raised requiring clear and appropriate responses.

Jørn Hindsdal
Deputy Director,
Tariff and Trade Affairs Directorate,
World Customs Organization