Harmonized System Overview
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Questions and Answers

Which year was NOT mentioned as a revision for the Harmonized System (HS)?

  • 2002
  • 2012
  • 2005 (correct)
  • 2017/2018

    • The Harmonized System (HS) is primarily used by the private sector.

    False

    What is the primary purpose of the Common External Tariff (CET)?

    To protect member countries from outside competition while promoting trade between them.

    The nomenclature in the Customs tariff schedule comes from the Latin word for ______.

    <p>name</p> Signup and view all the answers

    Match the following elements of the Customs tariff schedule with their descriptions:

    <p>Goods nomenclature = System for naming goods Tariff rates = Schedule of taxes on imports CET = Common External Tariff HS nomenclature = Classification system for goods</p> Signup and view all the answers

    What is the main purpose of the Harmonized System (HS)?

    <p>To classify traded products uniformly</p> Signup and view all the answers

    The Harmonized System is updated every 10 years.

    <p>False</p> Signup and view all the answers

    What is the role of the Harmonized System Committee?

    <p>To propose amendments to the Harmonized System as needed.</p> Signup and view all the answers

    The Harmonized System is based on the __________ Edition, 2022.

    <p>Ninth</p> Signup and view all the answers

    Match the following governing bodies with their functions:

    <p>COTED = Established the HS in 1988 and responsible for schedule of rates WCO = Administrates, develops, and maintains the HS International Convention = Legal authority for product classification Belize Customs Tariff = Governs the application of the HS in Belize</p> Signup and view all the answers

    What is the full name of the Harmonized System (HS)?

    <p>Harmonized Commodity Description and Coding System</p> Signup and view all the answers

    What does the acronym "WCO" stand for?

    <p>World Customs Organization</p> Signup and view all the answers

    What is the legal authority for the Belize Customs Tariff and Trade Classification?

    <p>Chapter 48 Customs &amp; Excise Duties Act Section 3(1), First Schedule &amp;(10), 8, 12</p> Signup and view all the answers

    What are the two main elements of the Customs tariff schedule?

    <p>A List of tariff rates and a goods nomenclature</p> Signup and view all the answers

    The Harmonized System (HS) is only a single-purpose system restricted to customs duties.

    <p>False</p> Signup and view all the answers

    How often are amendments to the HS prepared according to schedules set by the WCO?

    <p>Every 5-6 years</p> Signup and view all the answers

    What is the most recent edition of the Harmonized Commodity Description and Coding System?

    <p>Ninth (9th) Edition, 2022</p> Signup and view all the answers

    What year did the COTED establish the HS?

    <p>1988</p> Signup and view all the answers

    Which of the following is NOT a function of the Harmonized System Committee:

    <p>To determine the exact value of goods based on their material makeup</p> Signup and view all the answers

    What is the main purpose of a CET (Common External Tariff)?

    <p>To protect member countries from outside competition while promoting trade between them.</p> Signup and view all the answers

    How does the HS nomenclature help in the application of a CET?

    <p>It provides a common basis for classifying traded goods, ensuring that similar goods are treated consistently across member countries.</p> Signup and view all the answers

    While countries base their tariff schedules on the HS nomenclature, they are required to adopt the same rates of duty.

    <p>False</p> Signup and view all the answers

    What is the term used for a system of giving names to things within a particular discipline, profession, or field?

    <p>Nomenclature</p> Signup and view all the answers

    What are the two types of tariff rates within the national tariff?

    <p>Specific and Ad valorem</p> Signup and view all the answers

    Which chapter of the Customs and Excise Duties Act governs specific duties calculations?

    <p>Chapter 48, Section (8) and (12)</p> Signup and view all the answers

    What is the equivalent of one imperial gallon, according to the mode of ascertaining specific duty?

    <p>All of the above</p> Signup and view all the answers

    The duty on Malt liquor is calculated by the actual volume measured and not by the reputed quart, pint, or split method.

    <p>True</p> Signup and view all the answers

    The provisions of subsection (1) of chapter 48:8, regarding the calculation of duty on spirits and wine, apply to cordials and liqueurs.

    <p>False</p> Signup and view all the answers

    What is the conversion factor for converting U.S. gallons to U.K. gallons according to the 2022 edition of the HS?

    <p>0.83268</p> Signup and view all the answers

    What is the conversion factor for converting liters to U.K. gallons as per the HS?

    <p>0.00219976</p> Signup and view all the answers

    According to chapter 48, section (12), what percentage of proof spirit in a liquor is considered the maximum for classifying as wine?

    <p>42%</p> Signup and view all the answers

    What is the maximum proof spirit percentage, according to chapter 48, section (12), for a liquor to be classified as malt liquor?

    <p>20%</p> Signup and view all the answers

    Medicinal spirits are always classified as spirits, regardless of their proof spirit content.

    <p>False</p> Signup and view all the answers

    What is the term used to refer to the changes in classification of products in the HS system?

    <p>Revisions</p> Signup and view all the answers

    The Harmonized system Committee was established under the International Convention to govern the Harmonized Commodity Description and Coding System.

    <p>True</p> Signup and view all the answers

    Which chapter is currently reserved for future international use within the HS?

    <p>Chapter 77</p> Signup and view all the answers

    Which of the following contributes to the harmonization of Customs and trade procedures?

    <p>All of the above</p> Signup and view all the answers

    The Harmonized System is only used by governments and international organizations.

    <p>False</p> Signup and view all the answers

    Which of the following is NOT a purpose for which the HS system is used:

    <p>Setting the exchange rates of currencies</p> Signup and view all the answers

    The HS system is made up of 21 Sections, 99 Chapters, and over 5,000 commodity groups.

    <p>True</p> Signup and view all the answers

    What is the first step in determining the tariff rate of a product in the HS system?

    <p>Assigning goods to sections</p> Signup and view all the answers

    The HS code system uses a 10-digit code system for international classification.

    <p>False</p> Signup and view all the answers

    Which two digits in the HS code identify the chapter the goods belong to?

    <p>The first two digits</p> Signup and view all the answers

    Which two digits in the HS code identify groupings within a chapter?

    <p>The next two digits</p> Signup and view all the answers

    Which two digits in the HS code provide the most specific details regarding a product?

    <p>The last two digits</p> Signup and view all the answers

    Up to the HS-6 digit level, all countries classify products in the same way.

    <p>True</p> Signup and view all the answers

    What is the total number of HS Sections?

    <p>21</p> Signup and view all the answers

    How many HS Chapters exist in the HS system?

    <p>99</p> Signup and view all the answers

    What is the purpose of the HS legal notes?

    <p>To provide additional information and guidance regarding the classification of commodities.</p> Signup and view all the answers

    Headers in the Harmonized System are always the primary legal basis for determining the classification of goods.

    <p>False</p> Signup and view all the answers

    Match the following components of the Harmonized system with their corresponding attributes:

    <p>Section = Provides ease to locate items/products in the HS Chapter = First numerical breakdown Heading = First 4 digits Subheading = More detailed level for a heading Notes = Additional information</p> Signup and view all the answers

    In what HS Section would you find "bees"?

    <p>Section 1</p> Signup and view all the answers

    In which HS Section would you classify "machinery"?

    <p>Section 16</p> Signup and view all the answers

    In which HS Section would you find "shoes"?

    <p>Section 12</p> Signup and view all the answers

    Which chapter in the HS would you find "hats" in based on its description?

    <p>Chapter 65</p> Signup and view all the answers

    What is the HS Chapter that covers "clocks and watches, and parts thereof"?

    <p>Chapter 91</p> Signup and view all the answers

    According to the HS Chapter descriptions, where would you find "live trees"?

    <p>Chapter 6</p> Signup and view all the answers

    Which chapter in the HS would you likely find "school bags" , based on its description?

    <p>Chapter 42</p> Signup and view all the answers

    Which of the following is NOT a principle that the general rules for the interpretation (GIR) of the Harmonized System are designed to ensure?

    <p>Accurate Product Cost Determination</p> Signup and view all the answers

    The six GIRs should be applied in a hierarchical order.

    <p>True</p> Signup and view all the answers

    The first five GIRs apply to the 4-digit headings, while GIR 6 focuses on classification at the 5 or 6-digit subheading levels.

    <p>True</p> Signup and view all the answers

    What is the fundamental rule that applies to all classifications in the Harmonized System?

    <p>Rule 1</p> Signup and view all the answers

    What is the condition under which the GIR 2 should be applied?

    <p>Imported condition.</p> Signup and view all the answers

    GIR 2a applies only when goods are incomplete or unfinished.

    <p>False</p> Signup and view all the answers

    Which of the following would be an example of an incomplete good under GIR 2a?

    <p>A car without its wheels or engine</p> Signup and view all the answers

    A preform bottle, still in its blank state, is an example of an unfinished product.

    <p>True</p> Signup and view all the answers

    Which of the following goods would be classified as unassembled under GIR 2a?

    <p>A bicycle, in its disassembled parts</p> Signup and view all the answers

    A pre-fab building disassembled into panels, is an example of a disassembled good.

    <p>True</p> Signup and view all the answers

    A blank key, which is not yet functional, would be classified as a blank under GIR 2.

    <p>True</p> Signup and view all the answers

    A semi-manufactured product, like a metal bar, would be considered a blank

    <p>False</p> Signup and view all the answers

    Which of the following best describes the application of GIR 2b?

    <p>Classifying goods made of different materials or substances</p> Signup and view all the answers

    A wooden chair with metal legs is classified under GIR 2b.

    <p>True</p> Signup and view all the answers

    GIR 2b is always applicable, regardless of specific provisions in the HS system

    <p>False</p> Signup and view all the answers

    What is the key factor to consider when classifying goods under GIR 3?

    <p>The material composition</p> Signup and view all the answers

    When goods are classifiable under two or more headings, GIR 3a prioritizes the heading with the most specific description.

    <p>True</p> Signup and view all the answers

    GIR 3b applies to goods made of different materials or substances, goods put up in sets for retail sale, and mixtures.

    <p>True</p> Signup and view all the answers

    What is the essential character of a conveyor belt made of plastic and rubber?

    <p>Plastic</p> Signup and view all the answers

    What determines the essential character of a set of liquor and a shot glass sold as a gift set?

    <p>The liquor</p> Signup and view all the answers

    Rule 3c is applied when goods cannot be classified under GIR 3a or GIR 3b.

    <p>True</p> Signup and view all the answers

    What is the purpose of Rule 4 (most akin) in the Harmonized System

    <p>To classify goods that cannot be classified using the previous rules</p> Signup and view all the answers

    Rule 5 specifically addresses goods that are packaged for transportation.

    <p>True</p> Signup and view all the answers

    Rule 5a dictates that a camera case, specially made for a particular camera and sold with the camera, should always be classified separately.

    <p>False</p> Signup and view all the answers

    Rule 5b applies to packing materials, containers, or any other materials that are clearly suited for repetitive use.

    <p>False</p> Signup and view all the answers

    A plastic container used to pack a dozen bottles of beer would be classified using Rule 5b.

    <p>True</p> Signup and view all the answers

    What is the primary focus of GIR 6?

    <p>The classification of goods at the subheading level</p> Signup and view all the answers

    GIR 6 directs that classification below heading levels should follow the exact same rules used for heading levels.

    <p>True</p> Signup and view all the answers

    When classifying goods at subheading levels, all the GIRs should be applied sequentially.

    <p>False</p> Signup and view all the answers

    Classification at the subheading level is based solely on the specific subheading number.

    <p>False</p> Signup and view all the answers

    What would be the most likely classification for "black ink for drawing" in the HS system?

    <p>3215.90</p> Signup and view all the answers

    Rhodium, a precious metal, can be classified in HS heading 71.10.

    <p>True</p> Signup and view all the answers

    When classifying goods in the HS system, Rule 6 is the most widely used GIR.

    <p>False</p> Signup and view all the answers

    Rule 1 is the most fundamental rule in the HS classification system.

    <p>True</p> Signup and view all the answers

    Study Notes

    Harmonized System-Classification and Tariff System

    • The Harmonized System (HS) is a standardized numerical method for classifying traded products.
    • It is used worldwide for uniform identification and description of products.
    • This method is used for assessing duties and gathering statistics.
    • The HS is a multipurpose international product nomenclature used for classifying products.
    • It is considered a universal economic language for goods.
    • The HS is organized progressively, comprehensively, and systematically based on easily understood principles.
    • The World Customs Organization (WCO) sets the schedules and explanatory notes for the HS.
    • Every 5-6 years, the HS is updated with amendments and explanatory notes.
    • The current version of the HS is the Ninth (9th) Edition from 2022.
    • The Belize Customs Tariff and Trade Classification is governed by the International Convention and Chapter 48 of the Customs & Excise Duties Act Section 3(1) First Schedule & (10), 8, 12.
    • The HS codes consist of 6 digits (heading and sub-heading) and can be extended to 10.

    Outline/Objectives

    • The presentation outlines the structure and purpose of the HS.
    • Identify and define Harmonized System (HS).
    • Describe the purpose and importance of the HS.
    • Understanding the structure of the HS is critical to understanding GIR.
    • List and state the Rules (GIR).
    • Interpret and explain the six rules of interpretation.
    • Analyze and apply the rules to classify goods.

    The Law that Governs Us

    • The Belize Customs Tariff and Trade Classification is governed by the International Convention.
    • The legal authority is Chapter 48 of the Customs & Excise Duties Act Section 3(1) First Schedule &(10), 8, 12.

    What is the Harmonized System (HS)?

    • The Harmonized Commodity Description and Coding System.
    • A standardized numerical method of classifying traded products.
    • Used by countries to uniformly identify and describe products for assessing duties and gathering statistics.
    • Multipurpose international product nomenclature for product classification.
    • Universal economic language for goods.
    • Provides a code for goods.

    Harmonized System (HS) Governing Bodies

    • Governed by "The International Convention on the Harmonized Commodity Description and Coding System".
    • Council for Trade and Economic Development (COTED) established the HS in 1988.
    • Responsible for the schedule of rates.
    • The World Customs Organization (WCO) Harmonized System Committee.
    • Administers, develops, and maintains the HS system.
    • Responsible for nomenclature and legal notes.

    Function of the Harmonized System Committee

    • To propose amendments to the Convention on the Harmonized system.
    • Considers user needs and changes in international trade.
    • To prepare explanatory notes, classifications, and other advice for interpreting the Harmonized System.
    • To prepare recommendations for uniformity in interpreting and applying the Harmonized System.
    • To collate and circulate information concerning the application of the Harmonized System.
    • On own initiative or on request, provide information or guidance to Members of the Council.

    Harmonized System Committee

    • Representatives from each of the Contracting Parties form the Committee.
    • The Committee was established under the International Convention for the Harmonized Commodity Description and Coding System.
    • The HS has undergone several revisions and updates.
    • Revisions and updates entered into effect in 1966, 2002, 2007, 2012, 2017/2018, 2022.

    Why Created and Used by WHO: Harmonized System (HS)

    • Harmonizes Customs and trade procedures.
    • Facilitates non-documentary trade data exchange.
    • An essential tool for international trade.
    • Extensively used by governments and international organizations as well as the private sector.

    Why is it important : Purpose of the Harmonized System (HS)

    • Purposes such as internal taxes, trade policies, monitoring of controlled goods, rules of origin, freight tariffs, and economic research and analysis.
    • Transport statistics.
    • Price monitoring.
    • Quota controls.
    • Compilation of national account.
    • Economic research and analysis.

    HS-Tariff System-CET

    • Common External Tariff (CET).
    • A uniform tax or tariff applied to imported goods from outside a customs union or common market (e.g., CARICOM).
    • Applies the same duties, import quotas, preferences, or non-tariff barriers to all goods entering the area.
    • Contracting parties are obligated to base their tariff schedules on HS nomenclature.
    • Each party can set their own rates of duty.
    • Parties are free to adopt additional subcategories and notes.

    The Belize Customs Tariff and Trade Classification

    • National tariff prepared to implement the Common External Tariff (CET) of CARICOM.
    • Based on the 9th edition of the Harmonized System, 2022.
    • Customs tariff schedule consists of two elements: goods nomenclature (WCO) and a list of tariff rates (COTED).
    • Nomenclature comes from the Latin word for name and is a system for naming items in specific disciplines.

    Tariff Rates

    • A tariff is a tax on imported or exported goods and services.
    • National tariff has two types of rates:
      • Specific tariff.
      • Ad valorem. Specific tariff- based on weight or volume of the item. Ad valorem tariff- based on the cost of the item (e.g., 5%, 10%, 15%). Examples of Specific Tariff:
      • Liquor, fuel, cigarettes, cigars, onion, and potato.

    Calculating Specific Tariff

    • Laws governing specific duties calculations are outlined in Chapter 48 Section (8) and (12) of the Customs and Excise Duties Act.

    Mode of ascertaining specific duty

    • "reputed pint," "split," or "quart" measurement.
    • Legal bearing: Customs and excise duties act chapter 48 revised edition 2000.
    • Reputed split: 5 fluid ounces to 6 2/3 fluid ounces.
    • Reputed pint: 8 2/3 fluid ounces to 13 1/2 fluid ounces.
    • Reputed quart: 20 fluid ounces to 26 2/3 fluid ounces.
    • Actual volume ascertained by measurement when container is different from reputed measurements.
    • Malt liquor is ascertained by actual volume.

    What liquors may be classed as wine or malt.

    • Liquors containing more than 42% proof spirit (by Sykes' hydrometer or Government Analyst certification) are deemed wine.
    • Liquors containing more than 20% proof spirit (by Sykes' hydrometer or Government Analyst certification) are deemed malt liquor.
    • All other liquors containing more than 42% are deemed spirits (excluding medicinal spirits).

    Structure of the HS

    • Consists of Sections, Chapters, Headings, and Subheadings.

    Harmonized System - Tariff & Classification

    • Comprises over 5,000 commodity groups as headings and subheadings.
    • Organized into 21 sections.
    • 99 chapters, of which only 96 are currently in use; chapter 77 is reserved for future use; chapters 98 & 99 are reserved for national use.
    • Chapter 98 covers special classification provisions and is currently for personal and household effects.
    • Chapters are broken down into headings and further subdivided into subheadings.

    Harmonized System (HS)

    • Each subheading is identified by a six-digit code (HS code).
    • Legally and logically structured.
    • Supported by well-defined rules to achieve uniform classification and explanatory notes.
    • Products are assigned to sections, headings, and subheadings.
    • List of rates used to classify traded products.

    Harmonized System - Tariff & Classification Code

    • International level, six-digit code system.
    • The six digits are broken down into three parts: (Chapter, Heading, Subheading).
    • CHAPTER: (HS-2), the first two digits indicate the Chapter into which the goods belong.
    • HEADING: (HS-4), the next two digits show the grouping(s) within that chapter.
    • SUBHEADING: (HS-6), the next two digits identify more specific groupings.

    HS Assigns

    • Assigns up to a total of 8 digits at the tariff-rate (legal) level.
    • Two extra digits may be assigned to statistical reporting numbers for a total of 10 digits to be listed on entries.

    HS Sections

    • There are 21 sections in the HS, identified by Roman numerals.
    • Titles identify special or general categories of goods.
    • Provides ease to locate products in the HS.

    Titles of the Sections

    (These titles or sections summarize the categories of goods in the Harmonized System) ...(All the previous titles are included)...

    HS Chapters

    • Located within HS sections.
    • 96 chapters, numbered 1-97.
    • Chapter 77 is reserved for future use.
    • Product descriptions related to the chapter are listed with a corresponding numerical code.

    ...(All the previous sections are included)...

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