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Questions and Answers
What type of tariff is applied based on the cost of an item?
What type of tariff is applied based on the cost of an item?
A specific tariff is calculated based on the weight or volume of an item.
A specific tariff is calculated based on the weight or volume of an item.
True
What is the legal document that governs specific duties calculations?
What is the legal document that governs specific duties calculations?
Customs and excise duties act chapter 48
A _____ tariff is expressed as a percentage of the item's cost.
A _____ tariff is expressed as a percentage of the item's cost.
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Match the following terms with their descriptions:
Match the following terms with their descriptions:
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What is the primary purpose of the Harmonized System (HS)?
What is the primary purpose of the Harmonized System (HS)?
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The Harmonized System is updated every 3-4 years.
The Harmonized System is updated every 3-4 years.
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Who is responsible for the administration and maintenance of the Harmonized System?
Who is responsible for the administration and maintenance of the Harmonized System?
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The Harmonized System was established in the year _____ by the Council for Trade and Economic Development (COTED).
The Harmonized System was established in the year _____ by the Council for Trade and Economic Development (COTED).
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Study Notes
Harmonized System-Classification and Tariff System
- The Harmonized System (HS) is a standardized numerical method for classifying traded products
- The HS is used internationally to uniformly identify and describe products
- Purposes of HS include assessing duties and collecting trade statistics
- The HS is a multipurpose international product nomenclature for classifying products
- The HS is a universal economic language for goods
- The HS is systematically organized according to easily understood principles
- The HS must adhere to the schedules and explanatory notes set by the World Customs Organization (WCO) every 5-6 years
Outline/Objective
- Overview of the Structure of the HS
- Identify and define the HS
- Recognize the purpose and importance of the HS
- Describe the structure of the HS
- Recognize the importance of knowing the structure to understand the General Rules of Interpretation (GIR)
- General Interpretation of the Rules
- List or state the rules
- Interpret and explain the 6 Rules of Interpretation
- Analyze and apply the rules
The Law Governing the Belize Customs Tariff and Trade Classification
- The Belize Customs Tariff and Trade Classification is governed by the International Convention
- Legal authority: Chapter 48 Customs & Excise Duties Act Section 3(1) and Schedules 8, 10, 8, 12
Function of the Harmonized System Committee
- The Harmonized System Committee has functions concerning the provisions of Article 8
- Propose amendments to the Convention, considering users' needs and trade changes
- Prepare Explanatory Notes, classification opinions, and other guidance on interpreting the Harmonized System
- Develop recommendations for uniformity in interpreting and applying the Harmonized System
- Compile and spread information about the application of the Harmonized System
- Furnish information concerning classification of goods in the Harmonized System to Members of the Council of Trade and Economic Development (COTED) and other international organizations
- Present Reports to each Session of the Council concerning activities, proposed amendments, Explanatory Notes, and Classification Opinions.
- Exercise other powers and functions related to the Harmonized System as deemed necessary by the Council of the Contracting Parties
- Administration decisions with budgetary implications require approval from the Council.
Harmonized System (HS) Classification Governing Bodies
- Governed by "The International Convention on the Harmonized Commodity Description and Coding System"
- COTED: Council for Trade and Economic Development established the HS in 1988; responsible for rates schedule.
- WCO (World Customs Organization): Harmonized System Committee. Administers, develops and maintains nomenclature and legal notes
Harmonized System Committee
- A committee of representatives from the Contracting Parties was established under the International Convention on the Harmonized Commodity Description and Coding System.
- The HS has undergone revisions, entering into force in 1966, 2002, 2007, 2012, 2017/2018, and 2022.
Why the Harmonized System (HS) Was Created and Used by WTO
- The HS contributes to the harmonization and standardization of customs and trade procedures
- Non-documentary trade data interchange is facilitated by the HS
Purpose of the Harmonized System (HS)
- Purposes such as compiling transport statistics, price monitoring of goods, monitoring controlled goods, and compilation of national accounts.
- The purposes of the Harmonized System (HS) are monitoring of controlled goods, internal taxes, freight tariffs, trade policies, rules of origin, and economic research and analysis.
HS-Tariff System- Common External Tariff (CET)
- A uniform tax or tariff applied by a group of countries in a customs union, or common market (e.g., CARICOM) to imported goods from outside the union.
- The same customs duties, import quotas, preferences, and other non-tariff barriers to trade apply to all goods entering the area, regardless of the country of origin.
- Under the HS Convention, contracting parties are obligated to base their tariff schedules on the HS nomenclature.
- Contracting parties determine their own duty rates and are free to adopt additional subcategories and notes.
- The purpose of a CET is to protect member countries from outside competition while promoting trade amongst them.
Belize Customs Tariff and Trade Classification
- National tariff implemented the (CET) Common External Tariff of CARICOM.
- The Customs tariff schedule comprises goods nomenclature (WCO) and a list of tariff rates (COTED).
- Nomenclature comes from the Latin word for name, which is a system for naming things within a specific discipline, profession, or field.
Tariff Rates
- Tariff is a tax on imported or exported goods and services
- Two types of tariff rates in the national tariff: specific and ad valorem
Calculating Specific Tariff, Mode of Ascertaining Specific Duty: Reputed Pint, Split and Quart
- Customs and excise duties act chapter 48 Section 8 and 12
- Legal bearing : customs and excise duties act chapter 48 revised edition 2000 for specific duty calculations as at 31st December 2000.
Calculating Specific Tariff
- Reputed split: 5-6 2/3 fluid ounces (148-197 ml)
- Reputed pint: 8 2/3- 13 1/2 fluid ounces (256ml - 399 ml)
- Reputed quart: 20-26 2/3 fluid ounces (591ml - 789 ml)
- Spirits and wine: 6 reputed quarts/12 reputed pints/24 reputed splits = 1 imperial gallon
- Malt liquor: ascertained by actual volume displayed by measurement
- Cordials and liqueurs: provisions of subsection 1 (1) are not applicable
- Units of measurement conversion: US gallon converted to UK gallons and vice versa.
What Liquors May Be Classified as Wine or Malt
- Liqueurs with more than 42% proof spirit are deemed wine.
- Liqueurs having more than 20% proof spirit are deemed malt liquors.
- Other criteria used to classify liquors for spirits
Structure of the Harmonized System (HS)
- The HS is structured in a hierarchical system composed of sections, chapters, headings, and subheadings.
- Numerical codes are employed for each classification level.
- HS codes are six-digit codes composed of heading and subheading codes
Harmonized System (HS) Headings
- Located within HS sections
- Each chapter contains 4-digit codes.
- Related to sections
- Contain product descriptions with numerical codes.
How To Establish HS Headings for a Commodity
- Locate the HS section
- Locate the HS chapter
- Locate the HS heading
- Compare appropriate subheadings within the HS heading.
HS Subheadings
- Subdivision of HS headings provide further details on the listed commodities.
- Subheadings are represented by 6-digit codes, paired with descriptions.
- Method for finding HS subheadings
HS Structure/Numerical Codes
- HS code = heading + subheading
- Typically comprises of 6 digits.
Section II: Vegetable Products
- Section II of the HS is dedicated to vegetable products.
- Section II includes Chapter 10 (Cereals), Heading 10.06 (Rice), and Subheading 1006.30 (Semi-milled or wholly milled rice) classifications of products.
HS Chapters
- Located within HS sections.
- 96 chapters currently active.
- Specific product descriptions accompany each numerical code.
Additional Questions and Answers
- This section presents answers to questions concerning goods' identification and classification within the HS system.
- Methods for product identification and classification are explained using procedures and examples
- Additional questions related to particular scenarios are answered.
General Rules of Interpretation (GIR)
- Six general rules for the interpreting nomenclature,
- An integral part of the system,
- Establishes the criteria for implementing the Harmonized System
GIR 1: Legal and Non-Legal Basis
- The Titles of sections, Chapters, and Subchapters present an overview of the goods
- Guideline- give a general indication of what type of goods or where a specific goods are likely located.
- GIR 1 is the primary rule
GIR 2: Imported Condition
- Any reference in a heading to an article is inclusive of an article that is incomplete, unfinished, unassembled, or disassembled.
- Essential character of the complete or finished article is critical to classification
- Blanks are articles not ready for direct use that have the outline of the finished article
- The complexity of the assembly method is not a factor to consider
GIR 2B: Combining Materials and Substances
- Reference to a material or substances includes mixtures or combinations with other materials
- References including material or substance means products that are wholly or partly made from the given material
GIR 3: Two or More Headings
- Goods that are classifiable under two or more headings should be classified under the heading providing the most succinct description rather than a general description
- If several headings are equally specific, the most important or essential character of the product determines the correct classification
- Classification of mixed or composite goods or sets sold in retail
GIR 4: Most Akin
- Goods not classifiable using other GIRs are classified using similar articles
- Commonly applied for new products or products not covered by other classifications
- Primarily used for new goods
GIR 5: Packaging
- Specially shaped or fitted containers for specific items are classified with those items
- Suitable for long term or repeated use when presented with the intended item
GIR5B: Packing Materials and Containers
- Packing materials or packing containers that are normally used to pack goods are classified with the packing contents when the product is in a saleable form.
- Not generally binding,
- Packing materials or containers used for repetitive use are not classified with the contents,
GIR 6: Subheading Classification
- For legal purposes, the subheading's details should determine classification
- Subheadings should use the same methodology as headings
Application of the GIR 6
- Comparison of subheadings with the same numerical characters
- Applicability for cases when Rule 6 is not required
How to Determine HS Code
- Know your product
- Locate possible sections and chapters
- Identify 4-digit heading
- Determine the 8-digit code
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Description
Test your knowledge on types of tariffs and their calculations. This quiz covers specific tariffs, the Harmonized System, and related legal documents. Challenge yourself to learn more about international trade regulations.