2007 HS Amendments (2d Update) Pisani & Roll Teleconference October 11, 2006 John Smirnow Of Counsel Pisani & Roll 1717 K Street, NW Suite 600 Washington, DC 20036 Tel 202.466.0960 Fax 877.674.5789 email@example.com www.worldtradelawyers.com
Outline • 2007 HS Update & Future Changes to the HS • 2007 Explanatory Notes • Release Dates – 2007 HTSUS and Correlation Tables • Customs Rulings • Tariff Shift Rules • Certificates of Origin • Implementation Outside the United States • Establishing Reasonable Care in an Uncertain Environment • Stay Tuned . . .
2007 HS Update & Future Changes to the HS • The 2007 HS amendments should not result in tariff rate changes or changes in country of origin based on amended tariff shift rules. • Each year, the WCO Secretariat receives 400-500 requests for informal classification advice. • The Harmonized System Committee reviews approximately 50 classification issues each year, including changes to Section and Chapter notes and Explanatory Notes. • The 2012 review has commenced. Chapters 28 and 29 (chemicals) appear ripe for revision. • WCO rules of origin may be amended to conform to harmonized rules of origin under the WTO.
2007 Explanatory Notes • Hard copy and CD available at www.wcoomd.org. Not yet available electronically. • The Explanatory Notes are subject to ongoing amendment/clarification.
2007 Explanatory Notes (Ch. 84) • The definition for automatic data processing (“ADP”) machines has been revised to (1) recognize that ADP machines are digital, and (2) clarify the classification of separately presented printers, network equipment, loudspeakers, microphones, cameras, and monitors and projectors used in conjunction with a computer. • Printers & multifunction devices • New Heading 84.86 • What does the phrase “semiconductor manufacturing equipment” encompass?
2007 Explanatory Notes (Ch. 85) • Revised Note 4 to Chapter 85: (a) “Solid-state non-volatile storage devices” . . . are storage devices with a connecting socket, comprising in the same housing one or more flash memories . . . in the form of integrated circuits mounted on a printed circuit board. They may include a controller in the form of an integrated circuit and discrete passive components, such as capacitors and resistors; (b) The term “smart cards” means cards which have embedded in them one or more electronic integrated circuits . . . in the form of chips. These cards may contain contacts, a magnetic stripe or an embedded antenna but do not contain any other active or passive circuit elements. • Merger of headings 85.23 and 85.24 into heading 85.23 (discs, tapes, solid-state non-volatile storage devices, “smart cards” and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37)
2007 Explanatory Notes (Chapters 85 & 90) • Revised Note 5 to Chapter 85 • Multichip integrated circuits • New Note 6 to Chapter 85 • Connectors for optical fibers, optical fiber bundles or cables (revised heading 85.36, to include “connectors for optical fibers, optical fiber bundles or cables”) • Chapter 90 (Note 3)
Release Dates - 2007 HTSUS and Correlation Tables • 2007 HTSUS • 10-digit Correlation Tables • Industry Lobbying Efforts • Grace period • Certificates of Origin • Training
Customs Rulings • I have binding rulings for products whose tariff item has changed. Do I need to file new ruling requests?
Tariff Shift Rules • How will the 2007 HS amendments affect FTA tariff shift rules covering my products? • Future Updates
Certificates of Origin • Our practice is to update blanket certificates of origin at the end of each year for the coming year. If we update our blanket certificates by the end of 2006, will we be required to conduct another update in January 2007?
Implementation Outside the U.S. • During the first and second revisions to the HS, only 45% and 58%, respectively, of member countries were able to implement the changes on time. • Canada – 2007 Customs Tariff and 10-digit correlation table are available at: http://www.cbsa-asfc.gc.ca/general/publications/customs_tariff-e.html • Mexico – On track for Jan. 1, 2007 implementation. • Japan – On track for Jan. 1, 2007 implementation. English version not yet available. • EU - The 2007 EU tariff schedule will be implemented by the amending Annex I of the Council Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff. This amendment will enter into force on January 1, 2007. • Australia – On track for Jan. 1, 2007 implementation. Information available at: http://www.customs.gov.au/site/page.cfm?u=5662#e177
Establishing Reasonable Care in an Uncertain Environment • Training • Tariff Databases • Certificates of Origin • Work With Your Broker • Will Your Suppliers Be Prepared? • Antidumping Duties • Monitor Future Developments
Stay Tuned . . . • Future Updates on 2007 HTSUS • Country-specific Implementation Updates • 2012 HS Updates • HSC Updates • WTO Rules of Origin Harmonization and Impact on WCO Rules of Origin
We Can Help . . . • Training • Classification Advice • Ruling Requests • Tariff Shift Rules • 2012 Amendments
Contact Information • John Smirnow, Of Counsel - 202. firstname.lastname@example.org • Robert Pisani, Partner - 202.466.0960 email@example.com • Michael Roll, Partner – 310.826.4410 firstname.lastname@example.org