International Trade Law News

The U.S. International Trade Commission has published the second revision to the 2007 Harmonized Tariff Schedule of the United States Annotated (HTSA). This version of the HTSA took effect on July 2nd. The second revision to the 2007 HTSA corrects a number of typographical errors in the previous version. It also includes changes made by the Committee for Statistical Annotation of Tariff Schedules (commonly known as the 484(f) Committee) and modifications made to the Generalized System of Preferences program. A complete "change record" listing the various changes can be found here.

Labels: HTS, ITC

The U.S. International Trade Commission recently published its first revision to the 2007 version of the Harmonized Tariff Schedule of the United States (HTSUS). The changes correct a number of typographical and other errors in the general notes, duty rates and make several other changes to various provisions of the 2007 HTSUS schedule that took effect in February.

U.S. importers should now use the revised version of the 2007 HTSUS, which can be found at the following link: www.usitc.gov/tata/hts and entitled "HTS 2007 Revision 1". The list of changes made in Revision 1 can be found at the following link: hotdocs.usitc.gov/docs/tata/hts/bychapter/0701chgs.pdf.

Labels: HTS, ITC

U.S. Customs and Border Protection (CBP) has posted on its website a page entitled"Questions and Answers Regarding the Conversion to the 2007 Harmonized Tariff Schedule of the United States with WCO Updates". Many of the answers shed new light on the transition to the new Harmonized Tariff Schedule of the U.S. that will go into effect on February 3, 2007.

For example, CBP explains that the "grace period" for implementing the new version of the U.S. Harmonized Tariff Schedule will work as follows:

Q: How does the “Grace Period” work, does it mean that both 2006 and 2007 data will be available simultaneously - or just that the filers have an extra 17 days to respond?

A: The “Grace Period” applies to classification errors related to tariff classification made by the WCO. These could be either the late filing of a rejected entry for correction or a post entry correction for entries filed during the “Grace Period” that were later found to have classification errors.

ACS will only have "active" HTS numbers available in the reference files for processing entry/entry summary transmissions. For example, if a HTS declared on the transmission of an entry summary on February 10, 2007 is for an HTS that expired on February 2, 2007, the transmission will be rejected by ABI/ACS back to the filer without acceptance. Therefore, the Trade MUST utilize an active HTS number at the time of transmission.

If upon subsequent review of the entry summary by the Import or Entry Specialist CBP determines that the HTS successfully used on the February 10th ABI transmission is not the correct HTS and consequently issues either a penalty or formally rejects the entry summary package, this situation may be mitigated/resolved by using this “Grace Period”. This may also be the case if these same errors are discovered during an audit.

The NAFTA product specific rules are being amended to reflect the 2007 HTS. However, they are not likely to be implemented on February 3, 2007 with 2007 HTS. However, because the amended rules do not include any substantive, but are merely re-stated using HS 2007 nomenclature, COs completed using the 2006 rules of origin will be valid for 2007. COs completed prior to implementation will need to continue to reference the 2006 HTS numbers because the product specific rules are directly related to those HTS numbers.

To avoid confusion, it may be helpful for exporters to include both the old and new HTS on the CO. Once the new rules are issued, CBP may request that an amended CO be presented if there is no reference to the 2007 HTS number.

Please keep in mind that this only pertains to importations into the US and not procedures for importing into Mexico and Canada.

Labels: Customs, HTS

To facilitate the need for an easier transition to the World Customs Organization (WCO) 2007 Harmonized Tariff Schedule of the U.S. (HTSUS), U.S. Customs and Border Protection (CBP) announced a 17 day grace period to U.S. importers to assist in the HTSUS conversion.

The 17 day grace period, which will begin on February 3, 2007 and ends on the close of business on February 20, 2007, pertains to:

• Entries rejected by an Import Specialist or Entry Specialist either manually or electronically by RLF and returned to the filers for classification correction; and
• Post-entry classification corrections.

Labels: Customs, HTS

As we previously noted, the Presidential Proclamation authorizing the modification of the Harmonized Tariff Schedule of the U.S. (HTSUS) to conform to the numerous changes made to the Harmonized System was recently issued. The Proclamation states that the modifications to the HTSUS will apply to "goods entered, or withdrawn from warehouse for consumption, on or after the later of (i) February 1, 2007, or (ii) the thirtieth day after the date of publication of this proclamation in the Federal Register."

The Proclamation will be published in the Federal Register on January 4, 2007. The thirtieth day after January 4, 2007 is February 3, 2007.

In the meantime, today the U.S. International Trade Commission (ITC) posted on its website for the first time the complete 10-digit version of the HTSUS, incorporating the changes made by the World Customs Organization (WCO) and other changes required by U.S. law. The draft chapter-by-chapter listing of the 2007 Harmonized Tariff Schedule and general notes can be found at the following link: www.usitc.gov/tata/hts/bychapter/index.htm. As you will note, this version is prominently labeled "DRAFT" in red on each page, since it will not take effect until February. The ITC has advised that the final version of the basic edition of the 2007 HTS will be posted on the ITC's website on or about February 3, 2007 and a hard copy version will be published by the Government Printing Office at that time.

Another major change that will occur with the implementation of the new HTSUS in February, is that in most cases the tariff codes contained in the HTSUS can be used instead of Schedule B codes for reporting exports on the Shipper's Export Declaration or under the Automated Export System. The list of products for which a Schedule B number still must be used can be found in the "Notice to Exporters" section of the HTSUS at http://hotdocs.usitc.gov/docs/tata/hts/bychapter/0700n2x.pdf.

Labels: Customs, HTS, ITC

On January 1, 2007, customs tariff schedules around the world will undergo significant changes as a result of modifications made to the International Convention on the Harmonized Commodity Description and Coding System (the "Harmonized System"). While most countries finalized their new tariff schedules prior to the January 1, 2007 deadline, the U.S. has not yet issued the final version of its 2007 tariff schedule. As a result, implementation of the 2007 version of the Harmonized Tariff Schedule of the United States (HTSUS) will be delayed until February 2007.

On December 29, 2006, President Bush issued a Proclamation authorizing the modification of the HTSUS to conform to the numerous changes made to Harmonized System. The Proclamation states that the modifications to the HTSUS will apply to "goods entered, or withdrawn from warehouse for consumption, on or after the later of (i) February 1, 2007, or (ii) the thirtieth day after the date of publication of this proclamation in the Federal Register." Thus, assuming that there is not an unusual delay in publishing the Proclamation in the Federal Register, the new HTSUS will take effect in early February 2007.

The U.S. International Trade Commission (ITC) will soon issue the final version of the HTSUS, incorporating the changes to the Harmonized System as well as a number of other changes, including revisions to certain duty rates as a result of the Tax Relief and Health Care Act of 2006 (HR 6111). The ITC has already published a preliminary version of the 2007 HTSUS, which includes scheduled duty rate changes made by several free trade agreements and changes in reporting at the statistical (10-digit) level.

In the meantime, U.S. importers should review the draft version of the 2007 HTSUS published by the ITC in Publication 3851 to see how particular HTSUS subheadings will be affected in 2007 (note that this document only shows the HTS subheadings at the 8-digit level).

Many countries have already issued their 2007 tariff schedules, which will go into effect today. For example, the 2007 tariff schedules of the 27 countries in the European Union was published in the Official Journal of the European Union's website in October (note that Bulgaria and Romania joined the EU today). Canada's 2007 tariff schedule can be found on the Canada Border Service Agency's website.

Labels: Customs, HTS

U.S. importers and customs brokers should be advised that the U.S. International Trade Commission (ITC), the U.S. agency responsible for issuing the Harmonized Tariff Schedule of the United States (HTSUS), has issued another update regarding the status of the 2007 changes to the HTSUS. These changes are necessary to implement the modifications made to the Harmonized System by the World Customs Organization (WCO). While these changes will go into worldwide effect on January 1, 2007, as noted below the new version of the HTSUS incorporating the changes made by the WCO will not be available until January or February 2007. The complete text of the ITC's announcement is reprinted below:

IMPORTANT NOTE CONCERNING THE 2007 HTS:

Effective January 1, 2007, the USITC will post on this website an electronic version of the 2007 Harmonized Tariff Schedule of the United States (HTS) (Preliminary). This version will include changes occurring since the posting of the 2006 HTS (Supplement 1, Rev. 2), but likely will NOT include the following: (a) tariff legislation recently passed by the Congress and (b) amendments recommended by the World Customs Organization (WCO) for implementation on January 1, 2007. By U.S. law, the President cannot proclaim the implementation of these latter amendments in the HTS until a required Congressional layover period is completed; that layover period was completed during the week of December 4-8, and it is anticipated that the President will sign the implementing proclamation before the end of December, with an effective date yet to be determined. As soon as possible after the President signs the proclamation, the ITC will post an updated electronic version on this website, and the Government Printing Office will publish a hard-copy version of the 2007 HTS.

Labels: Customs, HTS