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New Harmonised System to come into force in January 2017

25th July 2014

By: Callie Lombard

  

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On July 11, the World Customs Organisation (WCO) council announced that, at its 123rd and 124th sessions, in June it had adopted recommended amendments to the Harmonised System (HS) nomenclature which will enter into force on January 1, 2017 (HS 2017).

The recommendation is being promulgated under the provisions of Article 16 of the HS convention, which implies that HS contracting parties have six months to notify the WCO secretariat of any objection to a recommended amendment.

Since the entry into force of the current version of the HS, the HS 2012, the HS committee has been revising this version of the HS nomenclature for almost five years. The HS 2017 will be the sixth version of the HS since the convention entered into force in 1983. The HS 2017 will enter into force for all HS contracting parties, but will exclude any amendments objected to during the six-month timeframe.

The new version of the HS includes 234 sets of amendments. Environmental and social issues are a major feature of these amendments, owing to the importance of the HS as a global tool for collecting trade statistics and monitoring trade. According to the WCO, this is borne out by the fact that the HS convention currently has 150 contracting parties, making it the WCO’s most successful international instrument to date.

Most of the recommended amendments were suggested by the Food and Agriculture Organisation of the United Nations. These include amendments relating to fish and fishery products, which are aimed at further enhancing the coverage of species and product forms which need to be monitored for food security purposes and the better management of resources, as well as amendments relating to crustaceans, molluscs and other invertebrates, which are motivated by the importance of the trade in and consumption of these species in their various product forms. There is also an amendment relating to cuttlefish and squid, which expand the coverage of the present HS codes for these species to have all these species grouped together. The classification of forestry products has also been modified to enhance the coverage of wood species and gain a better picture of trade patterns. The modification will enable trade data on tropical wood to be identified, resulting in better statistics on the trade in tropical wood and better data on the use of nontropical hardwoods. The amendments include new subheadings for the monitoring and control of certain bamboo and rattan products.

The HS 2017 amendments aim to provide detailed information on several categories of products that are used as antimalarial commodities. This will facilitate classification work and the trade in these life-saving products.

The amendments also introduce specific tariff subheadings to facilitate the collection and comparison of data on the international movement of certain substances controlled under the Chemical Weapons Convention.

New tariff subheadings have also been created for a number of hazardous chemicals controlled under the Rotterdam Convention and for certain persistent organic pollutants controlled under the Stockholm Convention. In some cases, there is a confluence of control regimes for chemicals by both the Rotterdam and Stockholm conventions.

In addition, new tariff subheadings have been created for the monitoring and control of pharmaceutical preparations containing ephedrine, pseudoephedrine or norephedrine, and for alpha-phenylacetoacetonitrile, a pre-precursor for drugs.

Other amendments resulted from changes in international trade patterns. Headings 69.07 (unglazed ceramic products) and 69.08 (glazed ceramic products) were merged to take account of the fact that the main subheadings within these headings concern products which are essentially no longer manufactured, and the industry and trade no longer make a distinction between unglazed and glazed ceramic products, while new products with a very high trade volume are classified under tariff subheadings 6907.90 and 6908.90 (‘other’).

Further, to adapt the HS to current trade practices, certain important products will be separately identified in existing or new tariff subheadings.

Advances in technology are also reflected in the amendments, including, among others, the size criteria for newsprint, light-emitting diode lamps, multi-component integrated circuits and hybrid, plug-in hybrid and all-electric vehicles.

The HS 2017 recommendation includes amendments to clarify texts to ensure uniform application of the nomenclature. This includes, for example, the regrouping of monopods, bipods, tripods and similar articles in a new heading – 96.20.

Customs Duty Act
On July 10, the first of the expected three new Customs and Excise Acts – the Customs Act No 30 of 2014 – was published. This follows the announcement by the South African Revenue Service (Sars) in January 2005 that it had embarked on the drafting of the new Customs and Excise Act, following the conclusion of the research and policy development phase.

The Customs Act No 30 of 2014, comprising 199 pages, 13 chapters and 229 sections, was assented to on July 9. The Act provides for the imposition, assessment, payment and recovery of customs duties on goods imported to or exported from South Africa. The publication of the Customs Control Act and the Customs and Excise Amendment Act is now awaited.

Deletion of Rules
On July 11, Sars informed of the deletion of Rule 46.05 and Rule 49B.16 of the Customs and Excise Act No 91 of 1964. These amendments were necessitated by the deletion of two general rebate items in Schedule No 4 of the Act, which were published in the Government Gazette of December 20, 2013, at the request of the Minister of Trade and Industry.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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