The World Customs Organization announced Jan. 18 an interim report on its work toward a possible strategic review of the Harmonized System.
The WCO is conducting a two-year study into the health of the HS to determine whether there are improvements or enhancements that could improve its functioning, usability, and sustainability. The WCO notes that the HS can be challenging in a trade environment characterized by a greater diversity of users, a faster pace of trade, rapidly changing products and customs practices, and more complex policy requirements.
Among other things, the interim report identifies concerns with the clarity of the General Interpretive Rules; user difficulties understanding and applying legal notes on definitions, scope of terms, and means of classification; and the ability to incorporate new provisions into the existing structure. The report also highlights potential changes such as incorporating alternative methods of identification and verification, accelerating review cycles to account for the pace of technological change, and revising the cost of HS tools.
In addition, the report discusses “a larger question on the HS as a whole,” particularly its ability to meet future needs. Major areas requiring consideration include greater capacity to identify goods more specifically (such as expanding the HS to an eight-digit nomenclature), ability to identify goods using a broader range of non-physical criteria, improved alignment with the development of global policies and policy analysis needs, and increased simplicity of use.
The WCO notes that while the final analysis stage of this study is already underway, further proposals or comments may still be submitted (though there may not be sufficient time to analyze them). The WCO Council will make the final decision on whether to take up any recommendations resulting from the study and to refer them to the Harmonized System Committee for further development, drafting, and implementation.
For more information on this project and its potential implications, please contact attorney Deb Stern at (305) 894-1007 or via email.
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