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2007 HTS Changes
CBP gives 45 days
In 2007, the biggest revision of the Harmonized System will take place since its introduction in 1989.
The Harmonized Tariff Schedule (HTS) is a complete product classification system, which contains a hierarchical method for describing all goods in trade for
duty, quota and statistical purposes. The HTS of the United States (HTSUS) is administered by the U.S. International Trade Commission (ITC).
More than 350 amendments to the Harmonized Tariff Schedule (HTS) Codes and notes have been made, affecting 83, or more than 85 percent, of the 97 chapters.
Many current headings and subheadings are being deleted, added or merged into new tariff headings. The chapters most affected are those dealing with industrial
and technological products mostly in chapters 84, 85, 87 and 90. For example, changes in the classification of semiconductor manufacturing equipment will be set
under one heading (8486), and multifunctional office machinery will be included under the heading for printing machinery (8443).
Updates occur every five years. Changes to the HTS are necessary to keep up with technological developments and changing patterns in international trade, as
well as from classification questions or disputes that have arisen. This year’s update is extensive for technology products, with significant changes in other areas.
The changes have important implications for importers, exporters, customs brokers, freight forwarders and carriers, because the incorrect classification of goods can
result in the seizure of shipments and the imposition of heavy fines. Some may find their HTS number databases to be out-of-date or that in certain cases, the duty for
a product may change. NAFTA and other preferential duty treatment programs may also be affected.
Before the President can sign the changes into law, 60 legislative days (or days when Congress is in session) must pass from the time the U.S. International
Trade Commission notifies Congress of the proposed changes. That period was completed the week of Dec. 4.
During its annual trade symposium on Dec. 13-15, CBP announced they will give the trade community 45 days to implement the changes incorporated in the 2007
HTSUS. The trade community had expressed concern that 15 days might not be enough time to update corporate classification and compliance systems given the
large number of changes. CBP also benefits from a longer lead time since they are short-staffed and may be unable to handle all of the programming.
The export Schedule B should be published in January 2007. Schedule B is published once per year and this year’s changes include the deletion of nearly
1,200 obsolete numbers and then the addition of 1,100 numbers.
The complete ITC report on the changes to the 2007 may be found at:
http://hotdocs.usitc.gov/docs/tata/hts/Pub3851.pdf
Avalon Risk Management has written more than one million Customs bonds since the company was founded in 1998. Avalon’s Customs surety program is underwritten by
our sister company, Lincoln General Insurance Company. Because both Avalon and Lincoln are wholly owned subsidiaries of Kingsway Financial Services, you can be assured
of our commitment to your industry.
For further information, please contact Gale Lawton, Bond Underwriting Manager, or Andriana Davis, Product Manager at Avalon’s corporate headquarters. Gale Lawton
can be reached at 847-700-8070 or via e-mail at glawton@avalonrisk.com. Andriana Davis can be reached at 847-700-8087 or via
e-mail at adavis@avalonrisk.com. Please do not hesitate to contact one of our nine regional offices throughout the U.S. To view a directory of Avalon’s office locations, please visit our
Web site at www.avalonrisk.com.
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