(June 29, 2006)

The World Customs Organization (WCO) recently announced that it has completed its 5-year periodic review of the Harmonized Tariff Schedule (HTS). As a result of the review, significant changes to the HTS will take effect on January 1, 2007.

The Harmonized Tariff System is the "Language of International Trade". It uses a 4-digit number as general classification (the first 2 being chapter number), and an additional 2 digits for sub-classification, for a total of 6 digits, called headings, which are universal throughout the WCO.

The United States Harmonized Tariff Schedule uses 4 additional digits for trade statistics, for a total of 10. Within the 97 chapters in the HTS, 83 chapters will have changes, as well as 240 different headings. In 2007, there will be a number of changes where an existing classification may go to 2 or 3 different ones.

Importers are advised to begin a review of their tariff databases as soon as possible and to make changes one by one, as a delay in doing so may adversely affect their business in 2007. Countries bind themselves in trade agreements using the Harmonized System as a guide for classifying goods. Free Trade agreements are based upon the Harmonized System, so an Importer could end up paying duty on an item that was previously duty free.

For additional information on changes to the 2007 HTS Schedule, please visit

Deringer's consulting & regulatory affairs group offers a full scope of services to support importers/exporters, carriers, and supply chain partners. For more information regarding this advisory, please call 518-297-3511, or email us at consulting@anderinger.com.