The U.S. International Trade Commission (ITC) had recently completed a significant review of the Harmonized Tariff Schedule (HTS) based on recommendations of the World Customs Organization and other factors. The modifications which have been adopted by the ITC are intended to take effect in January 2007. The upcoming changes represent one of the most significant modifications made to the HTS in some years.
The modifications involve hundreds of amendments affecting 83 chapters and 240 headings throughout the HTS. Many of the modifications are focused on the high-tech products classified in chapters 84, 85 and 90. For example, all printers, including those used with ADP machines (computers) will now be classified under heading 8443 rather than under heading 8471. Chapters 84 and 85 have been revised to incorporate updated technology in a variety of products, including printers, computer monitors and digital projection devices, telephone sets, networking devices, semiconductor manufacturing equipment, processors and controllers, memory devices, and various types of integrated circuits.
The tariff modification should have no impact on the corresponding duty rate. However, in instances where two classifications are combined the duty rate for the new classification will be that which related to the prior classification that accounted for the preponderance of the trade. Finally, the modifications will effect the statistical subdivisions, textile quota categories, footnotes, etc. which are delineated at the 10 digit level.
Any staged duty-rate reductions that have already been established as a result of various bilateral trade negotiations will continue to be applied beyond the January 1, 2007 implementation date. The 2007 staged rates for all such free trade agreements are utilized in the proposed new tariff provisions.
Following is a link to the ITC modifications and we encourage all importers to carefully review these changes to determine whether any of the changes affect their products: http://www.usitc.gov/tata/hts/other/rel_doc/simp/index.htm
For companies which identify the tariff codes on their import invoices any changes in the product classifications should be reflected on the documents. Planning and coordinating these changes will alleviate many potential problems and delays when the modifications take effect.
Finally, companies basing NAFTA eligibility on the tariff shift criteria should review their analysis to determine whether the tariff changes have affected their assessment.