TRADE ALERT

Update - Significant Overhaul of the U.S. Harmonized Tariff Schedule

(December 8, 2006)

The 2006 Customs Tariff contains 8,500 lines and 19,000 classifications. Five thousand of the 19,000 classifications have been impacted by the 2007 tariff changes. The 2007 tariff has added 2,000 items; while 3,200 that existed in 2006 were deleted. The World Customs Organization (WCO) changes at the United States 10-digit level have been drafted; however it is still not known when they will be available to the public.

International Trade Commission sources state that the decision to release the 10-digit tariff numbers to the public rests in the hands of the U.S. Trade Representative (USTR). Once available, a liberal amount of time will be required for the trade community and Customs and Border Protection (CBP) to update commodity classifications and automated systems to reflect the changes. The legal requirement that the changes take effect no sooner than 15 days after the proclamation is published in the Federal Register may not provide the necessary lead time.

Accordingly government sources have indicated that the implementation of the World Customs Organizations (WCO) recommended nomenclature changes to the HTSUS is expected to be delayed until February 2007.

CBP is working with the United States Trade Representative and Congress for a workable solution to implement the changes. If the date of proclamation and subsequent effective date will not allow sufficient time for transition to the new HTSUS for 2007, CBP headquarters will deploy procedures to the field offices and the trade community.

Export “Schedule B” classifications should be published in January 2007

According to government sources, the export Schedule B should be published in January 2007. Sources note that Schedule B is published once a year and that this year's changes include the following: the deletion of approximately 1,200 obsolete numbers and the addition of approximately 1,100 numbers. B Government sources add that approximately 500 of the record changes are one-to-one changes.

Deringer's consulting & regulatory affairs group offers a full scope of services to support importers/exporters, carriers, and supply chain partners, and can assist importers in obtaining rulings and researching how these modifications may affect them.

For more information regarding this advisory, please call 518-297-3511, or email us at consulting@anderinger.com