HS code, AHTN, and GIRs

HARMONIZED COMMODITY DESCRIPTION
and CODING SYSTEM or HARMONIZED
SYSTEM(HS)
&
ASEAN HARMONIZED TARIFF
NOMENCLATURE(AHTN)
(General Interpretative Rules)
By: Evan Jasper C. Nebreja

Harmonized
Commodity
Description and
Coding System or
Harmonized
System(HS)

Origin and Development of the
Harmonized Commodity Description
and Coding System?
1950 - the Customs Cooperation Council was formed in Brussels, Belgium.
1968 – Study on the facilitation of trade procedure showed the need of a Harmonized
System (HS) for use in international trade by the Economic Commission for Europe.
1970 – Customs Cooperation Council set up a study group to examine the possibility
of preparing a Harmonized System(HS)
1973 May – Customs Cooperation Council approved the preparation of the HS.
1976 – HS format taking place, U.N Statistical Commission recognized the
importance of the HS and submitted proposal.
1983 June – Customs Cooperation Council approved the HS Draft and Opened it for
signature.
1988 Jan.1 – HS convert came into force after acceptance by 29 contracting parties.

It was developed and presently maintained by the World Customs Organization
(WCO) (formerly known as the Customs Cooperation Council (CCC))
headquartered in Brussels, Belgium.
The HS nomenclature is annexed to the International
Convention on the Harmonized Commodity Description
and Coding System.
What is Harmonized Commodity
Description and Coding System?
The Harmonized Commodity Description and Coding System or simply
Harmonized System (HS) is an internationally standardized system of names
(description) and numbers (codes) for classifying traded goods.
The HS is a product nomenclature where each product is assigned its corresponding
“6-digit” code.

It was developed to facilitate international trade by establishing a uniform
system for the collection, comparison and analysis of international trade
statistics.
Under this Convention, contracting parties are obligated to base their tariff
schedules on the HS nomenclature, although parties set their own rates of duty.
Countries that have adopted the Harmonized System are not permitted to alter in
any way the descriptions associated to a heading or a subheading nor can the
numerical codes at the four or six digit levels be altered. This is what keeps the
Harmonized System harmonized.
The Philippines began implementing the harmonized tariff coding system back in
1989 - the 104th country to do so.
Individual countries may extend a Harmonized System code to eight or ten digits
for customs purposes.
More than 200 countries, customs and economic unions, representing more than
98% of world trade use the HS

Uses of the Harmonized
System
a. As a tariff nomenclature;
b. As a statistical nomenclature;
c. As a base for the harmonization of economic
classification, e.g., in market surveys and data collection;
d. As a multipurpose nomenclature used by international
unions of shipping and transport organizations; and
e. As an international economic language and code for
customs purposes.

What are the Composition of the
Harmonized System?
21
Sections
99
Chapters
Chapter 77 is
reserved for
future use
Chapters 98 & 99 are
reserved for special uses
by contracting parties to
the HS Convention
6 Rules
approximately
1,200
approximately
5,000

21 SECTIONS OF
HSSECTION I – LIVE ANIMALS; ANIMAL PRODUCTS
SECTION II – VEGETABLE PRODUCTS
SECTION III – ANIMAL OR VEGETABLE AND OILS AND THEIR CLEAVAGE
PRODUCTS; PREPARED EDIBLE FATS; ANIMAL OR VEGETABLE WAXES
SECTION IV – PREPARED FOODSTUFFS; BEVERAGES, SPIRITS AND VINEGAR; TOBACCO
AND MANUFACTURED TOBACCO SUBSTITUTES
SECTION V – MINERAL PRODUCTS
SECTION VI – PRODUCTS OF THE CHEMICAL OR ALLIED INDUSTRIES
SECTION VII – PLASTICS AND ARTICLES THEREOF; RUBBER AND ARTICLES THEREOF
SECTION VIII – RAW HIDES AND SKINS, LEATHER, FURSKINS AND ARTICLES THEREOF;
SADDLERY AND HARNESS; TRAVEL GOODS, HANDBAGS AND SIMILAR
CONTAINERS; ARTICLES OF ANIMAL GUT (OTHER THAN SILK-WORM GUT)
SECTION IX – WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL; CORK AND ARTICLES OF
CORK; MANUFACTURED OF STRAW, OF ESPARTO OR OF OTHER PLAITING
MATERIALS; BASKETWARE AND WICKERWORK

SECTION X – PULP OF WOOD OR OF OTHER FIBROUS CELLULOSIC MATERIAL; WASTE AND
SCRAP OF PAPER OR PAPERBOARD; PAPER AND PAPERBOARD AND ARTICLES
THEREOF
SECTION XI – TEXTILES AND TEXTILES ARTICLES
SECTION XII – FOOTWEAR, HEADGEAR, UMBRELLAS, SUN UMBRELLAS, WALKING-STICKS,
SEAT-STICKS, WHIPS, RIDING-CROP AND PARTS THEREOF; PREPARED FEATHERS AND
ARTICLES MADE THEREWITH; ARTIFICIAL FLOWERS; ARTICLES OF HUMAN HAIR
SECTION XIII – ARTICLES OF STONE, PLASTER, CEMENT, ASBESTOS, MICA OR SIMILAR
MATERIALS; CERAMIC PRODUCT; GLASS AND GLASSWARE
SECTION XIV – NATURAL OR CULTURED PEARLS, PRECIOUS OR SEMI-PRECIOUS STONES,
PRECIOUS METALS, METALS CLAD WITH PRECIOUS METAL AND ARTICLES THEREOF;
IMITATION JEWELLERY; COIN
SECTION XV – BASE METALS AND ARTICLES OF BASE METAL
SECTION XVI – MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS
THEREOF; SOUND RECODERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND
RECORDERS AND REPRODUCER, AND PARTS AND ACCESSORIES OF SUCH ARTICLES
SECTION XVII – VEHICLES, AIRCRAFT, VESSELS AND ASSOCIATED TRANSPORT EQUIPMENT

SECTION XVIII – OPTICAL, PHOTOGRAPHIC, CINEMATOGRAPHIC, MEASURING, CHECKING,
PRECISION, MEDICAL OR SURGICAL INSTRUMENTS AND APPARATUS; CLOCKS AND
WATCHES; MUSICAL INSTRUMENTS; PARTS AND ACCESSORIES THEREOF
SECTION XIX – ARMS AND AMMUNITION; PARTS AND ACCESSORIES THEREOF
SECTION XX – MISCELLANEOUS MANUFACTURED ARTICLES
SECTION XXI – WORKS OF ART, COLLECTORS’ PIECES AND ANTIQUES

Chapter Live animals
Heading
Live sheep and goats
Subheading
Goats
SECTION I
LIVE ANIMALS; ANIMAL PRODUCTS

ASEAN
Harmonized
Tariff
Nomenclature
( A H T N )

What is ASEAN Harmonized
Tariff Nomenclature (AHTN)?
The Association of Southeast Asian Nations (ASEAN) comprising of
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand and Vietnam, agreed to adopt a
common tariff nomenclature to facilitate the flow of trade within the
region.
The AHTN is the harmonization of each ASEAN member country’s
customs nomenclature.

The AHTN is based on the Harmonized System up to the 6-digit
subheadings. It is supplemented with the national requirements of
each of the 10 ASEAN member countries in the form of 8-digit
subheadings.
Any amendments on the Harmonized System would also be reflected
on the AHTN.
8703.90.12A
Completely knocked down electrically powered go-cart
6-digit HS code
8-digit AHTN
Code
Alpha Code

SECTION
SECTION TITLE
SECTION NOTE
CHAPTER TITLE
CHAPTER NOTE
SUBHEADING NOTE

• As a uniform tariff nomenclature within ASEAN
• As a base for preferential tariff purposes in AFTA
What are the advantages of the AHTN?
• It establishes uniformity of application in the classification of goods in
ASEAN
• It enhances transparency in the classification process for goods in
the region
• It simplifies the tariff nomenclature system of ASEAN Member States
to facilitate trade in the region

The Tariff Commission is mandated by Executive Order No. 688 dated 01 May
1981 to align the Philippine Tariff Nomenclature with all future amendments to
the Customs Cooperation Council Nomenclature. Subsequently, a NEDA Board
Resolution and/or an Executive Order will be issued upon the completion of the
required procedures to adopt the AHTN.
Further, the Philippines is bound by Article 4 of the ASEAN Agreement on
Customs dated 01 March 1997 and the AHTN protocol to be signed by the
Member States within 2002.
The Philippines is scheduled to implement the adoption of the AHTN by 01
January 2003.

The Governments of Brunei Darussalam, the Kingdom of Cambodia, the
Republic of Indonesia, Lao People’s Democratic Republic, Malaysia, Union of
Myanmar, the Republic of Philippines, the Republic of Singapore, the
Kingdom of Thailand and the Socialist Republic of Viet Nam of the
Association of South East Asian Nations (hereinafter referred to as “ASEAN”):
RECALLING the mandate of the Fifth ASEAN Summit to harmonise tariff
nomenclature among all ASEAN Member States so as to enhance the flow of
goods in the region;
DESIRING to promote regional economic integration, and in particular, to
support the establishment of the ASEAN Free Trade Area (AFTA) which
envisages tariffs of 0-5% in the year 2002 for the original six ASEAN Member
States, 2006 for Viet Nam, 2008 for Lao PDR and Myanmar, and 2010 for
Cambodia, and further reduction to end tariffs of 0% by 2010/2015;

GENERAL
INTERPRETATIVE
RULES
(GIRs)

There are 6 General Rules
 The first five Rules relate to classification in the 4- digit
headings.
 Rule 6 relates to classification in the subheading level.
The Rules set out the principles for classification in the HS
nomenclature.
They are an integral part of the Nomenclature, providing uniform
application and interpretation.

The application of the GIRs (1-4) should always be in
SEQUENTIAL ORDER:
Rule 1 is to be taken into consideration first.
If classification is not covered by the provisions of Rule 1, then apply
Rule 2, and so on.
Goods must first be classified in the 4-digit HS heading whose
terms most specifically describe the goods (unless otherwise
required or directed by the GIRs) and
Only 4-digit headings are comparable:
Do not compare a heading description with a subheading description.

Example:
Classification of an electric toothbrush.
? Heading 85.09 as an “Electro-mechanical
domestic appliances with self-contained
electric motor,….”
OR
? Subheading 9603.21 which provides for
“Toothbrushes,…”.
(Heading 96.03 provides for “Brooms,
brushes…”)

Rule 1 Terms of the Headings, Section/Chapter Notes
Rule 2 (a) Incomplete or unfinished; Unassembled or disassembled
Rule 2 (b) Mixtures or combinations
Rule 3 2 or more headings
Rule 3 (a) Most specific
Rule 3 (b) Essential character
Rule 3 (c) Last in numerical order
Rule 4 Most akin
Rule 5 (a) Special containers
Rule 5 (b) Packing materials & containers
Rule 6 Subheading rule

RULE 1
The titles of Sections, Chapters and sub-Chapters are
provided for ease of reference only; for legal purposes,
classification shall be determined according to the
terms of the headings and any relative Section or
Chapter Notes and, provided such headings or Notes
do not otherwise require, according to the following
provisions:

Example: Live poultry
(heading 01.05)
RULE 1: Terms of the heading and any relative Section or Chapter
Notes

RULE 2(a)
(a) Any reference in a heading to an article shall be
taken to include a reference to that article incomplete
or unfinished, provided that, as presented, the
incomplete or unfinished article has the essential
character of the complete or finished article. It shall
also be taken to include a reference to that article
complete or finished (or falling to be classified as
complete or finished by virtue of this Rule), presented
unassembled or disassembled.

Example: Preform bottle – Unfinished
(heading 39.23 covers plastic bottles)
Wrist watch without strap - Incomplete
(heading 91.02 covers wrist watches)

Unassembled office chair (heading 94.01 covers seats)

RULE 2(b)
Any reference in a heading to a material or
substance shall be taken to include a reference to
mixtures or combinations of that material or
substance with other materials or substances. Any
reference to goods of a given material or substance
shall be taken to include a reference to goods
consisting wholly or partly of such material or
substance. The classification of goods consisting of
more than one material or substance shall be
according to the principles of Rule 3.

RULE 3
When by application of Rule 2 (b) or for any other reason,
goods are, prima facie, classifiable under two or more
headings, classification shall be effected as follows :
RULE 3(a)
The heading which provides the most specific description
shall be preferred to headings providing a more general
description. However, when two or more headings each refer
to part only of the materials or substances contained in mixed
or composite goods or to part only of the items in a set put up
for retail sale, those headings are to be regarded as equally
specific in relation to those goods, even if one of them gives a
more complete or precise description of the goods.

RULE 3(a) : Example - Chair/ladder
Wooden ladder (heading 44.21- Other
articles of wood);
Wooden chair (heading 94.01 - Seats)
Rule 3(a): Principles
Relative Specificity
 A description by name is more
specific than a description by class.
 A description that more clearly
identifies a product is more specific
than one which is less complete.

RULE 3(b)
Mixtures, composite goods consisting of different
materials or made up of different components, and
goods put up in sets for retail sale, which cannot be
classified by reference to 3 (a), shall be classified as if
they consisted of the material or component which
gives them their essential character, insofar as this
criterion is applicable.

MIXTURE: Mixture of barley (60%) of heading 10.03 and oats
(40%) of heading 10.04

COMPOSITE GOOD: Combined wrist watch of heading 91.02 and
lighter of heading 96.13 (both contained in the same housing).

SET: Hairdressing kit consisting of an electric hair clipper of heading 85.10,
a comb of heading 96.15,
a pair of scissors of heading 82.13, and
a brush of heading 96.03

RULE 3(c)
When goods cannot be classified by reference to 3 (a) or 3 (b), they shall
be classified under the heading which occurs last in numerical order
among those which equally merit consideration.
Electric lamp (heading 94.05) with alarm
clock (heading 91.05)

Chandeliers (heading 94.05) with electric fan (heading 84.14)

RULE 4
Goods which cannot be classified in accordance with
the above Rules shall be classified under the heading
appropriate to the goods to which they are most akin.
EXAMPLE: Exhaust Air
Jack
(heading 84.25)

RULE 5(a)
In addition to the foregoing provisions, the following
Rules shall apply in respect of the goods referred to
therein :
(a) Camera cases, musical instrument cases, gun
cases, drawing instrument cases, necklace cases and
similar containers, specially shaped or fitted to
contain a specific article or set of articles, suitable for
long-term use and presented with the articles for
which they are intended, shall be classified with such
articles when of a kind normally sold therewith. This
Rule does not, however, apply to containers which
give the whole its essential character;

Violin with case (heading 92.02)
Packing materials and packing containers entered with the
goods therein shall be classified with the goods if they are of
a kind normally used for packing such goods

RULE 5(b)
Subject to the provisions of Rule 5 (a) above, packing
materials and packing containers presented with the
goods therein shall be classified with the goods if they
are of a kind normally used for packing such goods.
However, this provision is not binding when such
packing materials or packing containers are clearly
suitable for repetitive use.

Example:
MEN’S SHIRTS INDIVIDUALLY SEALED IN A POLYBAG THEN
PACKED IN CARDBOARD BOXES
Entirety
Classified As
Shirts

Packing materials or containers designed for REPETITIVE USE.
Example:
Gumball dispensing machine (predominantly of
zinc alloy) imported with gumballs. It is
designed to accept a coin and release a candy.
Gumballs (17.04)
Dispenser (79.07)
These Packing materials or containers
are to be classified SEPARATELY with
their content.

RULE 6
For legal purposes, the classification of goods in the
subheadings of a heading shall be determined
according to the terms of those subheadings and any
related Subheading Notes and, mutatis mutandis, to
the above Rules, on the understanding that only
subheadings at the same level are comparable. For the
purposes of this Rule the relative Section and Chapter
Notes also apply, unless the context otherwise
requires.

HS code, AHTN, and GIRs

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