Twenty-five years and counting. On January 1, 1988, the World Customs Organisation (WCO) devised the Harmonised Commodity Description and Coding System, best known as the ‘Harmonised System’ or simply ‘HS’. The HS comprises about 5 000 commodity groups each identified by a six digit code, arranged in a legal and logical structure and supported by well-defined rules to achieve uniform classification.

The WCO reports that the HS is used by more than 200 countries, including South Africa, as a basis for customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HS.

In an address made on March 11, 2013, to commemorate the anniversary, the WCO secretary-general Kunio Mikuriya described the HS as the “backbone” of the WCO. He said the flagship instrument had been a success story, owing to its wide recognition and implementation by WCO members.

Mikuriya stressed that the system had helped customs authorities and its other users to find their way in the sophisticated architecture of today’s trading environment. Moreover, it had been useful in ensuring fiscal and regulatory compliance, as well as efficient revenue collection. The HS, he enthused, had become the genuine ‘lingua franca’ for commerce and industry and its importance is set to continue to increase in the years to come.

Amendments to the HS are introduced at five-year intervals, and last amendments were introduced on January 1, 2012 – the nature and extent of the proposed amendments were outlined in this column.

Looking to the future, Mikuriya pointed out that the WCO was committed to ensuring that the HS remained relevant in the future. He said that the WCO policy commission had embarked on a strategic review of the HS to understand the optimal level of granu- larity, as well as the appropriate length of the review cycles.

The secretary-general concluded by emphasising that it was symbolic that the WCO was celebrating the HS anniversary in 2013, which coincided with the WCO’s Year of Innovation, as the system was clearly not only driving customs innovation, but was also itself amenable to innovation and review.

Mikuriya expressed confidence that the HS would rise to the challenge, adequately responding to the needs and expectations of the global community, embracing and supporting innovation, and remaining one of the pillars of regulatory architecture for global trade. You might recall that the three pillars of customs are tariff classification, valuation, and origin.

Closing the celebrations, the current WCO director of tariff and trade affairs, Giuseppe Favale, said that the HS was the result of immense effort and the strong commitment of the Customs community to the idea of developing a common language for commerce, which had proved successful and was widely recognised and used across the globe.

Velocity Joints
On March 22, 2013 the International Trade Administration Commission of South Africa (Itac) informed of the proposed reduction in the rate of customs duty on constant velocity joints, or CV joints, classifiable under tariff subheading 8708.50.90. The tariff would be reduced from 20% ad valorem to free of customs duty by the creation of an additional 8-digit tariff subheading for CV joints under tariff subheading 8708.50.

The applicant, Masterparts, reasoned that there are no local manufacturers of CV joints within the Southern African Customs Union (Sacu), and the current customs duty only serve as a cost raising effect.

Comments are due by April 19, 2013.

Graphite Electrodes
On March 22, Itac informed of the proposed increase in the “General” (Most Favoured Nation) rate of customs duty on graphite electrodes (of a kind used for furnaces), classifiable under tariff subheading 8545.11, from a rate of customs duty of free to 10% ad valorem.

The applicant, GrafTech South Africa, provided the following reasons for the application: Firstly, it is the only manufacturer of graphite electrodes in the Sacu region and is suffering injury as a result of rapidly increasing imports at declining import unit prices. Secondly, the low priced imports have severely affected the profit- ability of the business. And thirdy, the company’s investment in the Sacu economy is under threat because of the serious injury being caused by imports.

As the sole Sacu region manufacturer of graphite electrodes, GrafTech adds that its products are essential to a number of industries, and it is in the best interest of the Sacu economy to retain this important investment.

Comments are due by April 19, 2013.

Frozen Potato Chips
On March 8, Itac informed of the initiation of the investigation for remedial action in the form of a safeguard against the increased imports of potato chips.

The application was lodged by McCain, supported by Nature’s Choice Products and Lamberts Bay Foods.

Comments are due by May 08, 2013.