The World Customs Organization has released a report summarizing the findings of an exploratory study on the possible strategic review of the Harmonized System. The WCO’s Harmonized System Committee, Policy Commission, and Council have agreed to examine the report to assess which findings and recommendations should be further explored or developed into specific change proposals.
The WCO notes that while the HS “has served as the backbone of global customs classification for decades,” it now “faces new challenges, including the rapid growth of e-commerce, increasing complexity of product lines, and diversification of users, as well as increasing demands for sustainability and climate action in trade.” Further, the HS “is a tool best suited to experts and yet required to be used by people with no expertise in classification,” meaning “the quality of its use leaves much to be desired in terms of accuracy and consistency.”
In response, the WCO launched two years ago a study to assess how the HS can evolve and adapt to these changes while maintaining relevant, effective, user-friendly, and future-proof. The resulting report concludes that the HS is “still the best available system for the classification of goods at the border for customs purposes” but that addressing current and future challenges “creates a requirement for substantial work to simplify and clarify the use of the HS as much as possible.”
Some suggested improvements include (1) greater clarity in the classification process (General Interpretative Rules), (2) a review of the consistency, clarity, relevance, and currency of the content of the HS and its tools, (3) improved accessibility to those tools, (4) improvements to the update capacity, and (5) greater consistency in the timing of implementation of new editions. The report also presents a spectrum of other recommendations, ranging from those readily implementable within existing frameworks to what the report terms “moon shot ideas,” such as shifting the HS from six digits to eight or even creating a sister convention to the HS for collecting additional information on goods.
For more information on classification issues at the WCO, please contact attorney Deb Stern at (305) 894-1007 or via email.
Copyright © 2024 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.