Presented By LRA TRAINING TEAM MUDULE VI HS CLASSIFICATION INTRODUCTION The participants in this course are entreated to do their utmost best to enhance their knowledge and skills to make them efficient and active participants and to ID: 1009362
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1. MODULE VICUSTOMS BROKERS LICENSING TRAINING PROGRAMPresented By: LRA TRAINING TEAM
2. MUDULE VIHS CLASSIFICATION
3. INTRODUCTIONThe participants in this course are entreated to do their utmost best to enhance their knowledge and skills to make them efficient and active participants and to contribute effectively to the conduct of the class session. This may lead to a successful pass in the Customs Brokers Licensing uniform examination.2
4. INTRODUCTION On the other hand, participants who may not assert themselves proficiently in this module, could stand the risk of not passing the uniform examination and may fail to be licensed to practice as professional Customs broker. 3
5. OUTLINEModule objectivesBackground to Tariff Classification—Evolution Overview of the HS structureThe structure of the HS—Liberia 2012 HS vs. CET 5. Overview of the General Interpretative Rules (GIRS)6. The meaning of classification7. Why classify using HS?8. How to us the HS
6. Module ObjectivesAt the end of this module, participants should be able to:Define technical terms and Latin phrases used in the customs nomenclatureOutline the evolution of customs nomenclatureState the reasons for tariff classificationIdentify the uses of the Harmonized SystemOutline the structure of the Harmonized System 4
7. Module Objectives Cont. At the end of this module, participants should be able to:Compare and contrast Liberia 2012 HS Tariff Structure to that of the CETIdentify the concept/principles of HS classificationOutline the legal basis for tariff classificationIdentify relevant documents required for proper classificationCorrectly apply the GIRs to classify traded goods 5
8. SESSION IEVOLUTION OF THE HS NOMENCLATURE
9. Session Objectives At the end of this session, participants should be able to:Out the important stage (dates) to the evolution of the HSDefine key terminologies and Latin phrases use in the HS nomenclatureOutline the goals and reasons for HS classificationOutline the uses of the HS6
10. The Evolution of Customs Nomenclature7
11. Definition of key terms and Latin phrases10International trade is an exchange of goods between two or more countries.CET means common external tariff.Mutatis mutandis means with the necessary changes Inter alia means among other things Prima facie means at first sightEtc. =etcetera means and the others/and so forth
12. Definition of key terms and Latin phrases Cont. Nomenclature means a systematic naming, or enumerating of all goods found in international trade along with international rules and interpretations. Customs tariff as used herein refers to a systematic classification of goods entering the international trade for national interests together with rates of duties. Classification means a process of arriving at a particular heading or subheading of a commodity entering the international trade.9
13. Overview of the HS Core specifics and structure of HS is universalMember countries eligible to define specific detail items and assign applicable rates of duty to any required categoryGoals:Systematic classification of all goodsUniformity in classificationInternationally accepted customs language9
14. Reasons for Tariff ClassificationSystematic Classification of all goodsUniform Classification of all goodsTo have common Customs languageTo ensure simplification and certainty9
15. Uses of Harmonized System Basis for customs tariffCollection of international trade statisticsRules of originCollection of government revenueTrade negotiations (e.g. the WTO schedule of tariff concessions)Transport tariffs and statisticsMonitoring prohibited and restricted goods 11
16. SESSION IIHS STRUCTURE
17. Session Objectives At the end of this session, participants will be able to provide information regarding:Structure of the HS Nomenclature Compare and contrast HS and CET StructuresDistinguish b/w legal and non-legal text of the HSOutline basic principles underlying HS structure 12
18. The Structure of the HS A six-digit nomenclatureFirst four digits equal headingFirst six digits equal sub-heading 18
19. HS Structure—LIB 2012 HS vs. CETLiberia 2012 HSRate (Advalorem)Frequency0%21.5%92.5%4735%19307.5%87010%44011%9915%98920%60725%31145%150%57CETRateDescription0%Essential goods5%Basic raw materials, capital goods and specific inputs10%Intermediate goods20%Finished goods (ready for consumption)35%Selected finished industrial products with regional capacity or potentials
20. HS STRUCTURE CONT 21 Sections 99 Chapters 1258 Headings 5387 Subheadings
21. The HS Structure—Diagrammatic Illustration
22. HS Structure Cont.International—(HS) Code PositionsChapter 1 & 2Heading 3 & 4Subheading 5 & 6
23. Basic Principles of the HS StructureLevel of processing of the goodsOrigin of the goodsChemical composition of the goodsMaterial make-up of the goodsFunctions of the goods
24. Text of the HSLegal Non-LegalGIRs index Section Notes Section TitlesChapter Notes Chapter TitlesSubheading Notes Subchapter TitlesHeading Explanatory NotesSubheading Compendium of classification opinion
25. SESSION III OVERVIEW AND APPLICATION OF THE GIRS
26. Session ObjectivesAt the end of this session, participants will be able to: provide information on General Interpretative Rules (GIRS)Outline the principles of tariff classificationList the steps to using the HS Correctly apply the GIRs to classify goods
27. Principles of tariff classificationA commodity can be classified either by:Terms of headingNotes to sections, chapters or subheadingsGeneral Interpretative Rules
28. General ObservationGoods in the HS are grouped in two broad categories:Goods which the earth is endowed with.E.g. minerals, animals, plant water, etc.Goods which are man-madee.g. TVs, motor vehicles, the list is endless because of change in technologies
29. General Observation Cont.Goods under chapters 1 to 83 are generally classified according to material of manufactureUnder chapter 84 to 96 are generally classified to function
30. Overview of GIRsGIRs are designed to ensure that a given product is always classified in the same heading and subheading with the exclusion of any other heading meriting consideration. In fact, they illustrate and provide step-by-step basis for classification of goods in the harmonized system.
31. Summary of GIRsSix RulesMust be applied in numerical order esp. GIRS (1-4)Rules 1-4 classify actual goodsRule 5; packing and packagingRule 6; classify at 6 digit sub-heading level
32. Usage of GIRsUse terms of the headingsUse terms of the section and chapters notesNOTE: Most goods are classified to their direct heading without recourse to rules 2-4
33. How do we use the HSRead explanatory notesRefer to indexFind headings that appear to describe the goodsFind the most specific headingsCheck section and chapter notesApply GIRS
34. Important QsBefore classification:What is it?What material or substance is it made of?What are its function or use?In what form is it usually imported?Is this the only possible classification?
35. Example of ClassificationLaptop ComputerIdentity: machinematerial: various (above Chap. 83)Function: Data processingPossible section: XVIPossible Chap. 84Heading 84.74
36. Example of classification Cont.FORK OF WOODIdentity: Article of woodMaterial: wood (below Chap. 83)Function: Tableware/cutleryPossible Section: IXPossible Chap. 44Heading 44.19
37. Self-Testing QuestionsClassify the following articles:Chair made of woodRadio umbrellaPlaying cardsPlastic toys
38. Self-Testing QuestionsClassify the following articles:Chair made of plasticflourBiscuitSilk & cotton men shirtPlastic toysAlum. ZincEye glasses
39. THANK YOU