Hats off to the World Customs Organization (WCO) for inviting stakeholders from both the public and private sectors to share their experiences and contribute thoughts on how to revitalize the Harmonized System.
The “WCO Conference on the future direction of the Harmonized System”, which takes place in Brussels on May 2-3, is being organized to explore ideas and recommend potential courses of action to the WCO Policy Commission.
Conference organizers acknowledge that “it is high time to reflect on the challenges ahead and explore the idea of a strategic review of the HS to ensure that it remains relevant and responds to concerns of stakeholders.”
The general objective of this ambitious project is to update the 30 year-old international standard so that it is:
- Less complex and more user-friendly for the average trader;
- More easily and appropriately adaptable to rapidly emerging industries and products;
- Not as susceptible to subjective interpretation; and
- Responsive to policy and trade practice needs.
In its background paper for the conference , the WCO Secretariat acknowledges that HS classification can be a difficult task for many involved in international trade and that the rate of classification error reported by several authorities is disturbingly high.
3CE Technologies has been invited to submit a conference paper and participate in a panel on HS user-friendliness.
As software developers, we have treated the HS like a puzzle that needed to be solved. Now, we have been given the opportunity to reflect on how the puzzle itself might be updated so that it is less complex and meets the needs of the average user.
Our paper, “Toward an Intuitive HS: Addressing Structural and Semantic Impediments to Easy, Accurate HS Classification“, touches upon two aspects of the HS that we have found to be especially challenging.
First, is the prevalence of structural inconsistencies and exceptions in the HS. This occurs when a common notion of the world is not maintained in the HS. For example, in the real-word “juices” are generally considered types of “beverages” (which are provided for in Chapter 22). However, in the HS this is not the case, as “juices” are classified as “preparations of vegetables, fruit, nuts or other parts of plants” (Chapter 20).
To address the exceptions problem, we propose that – to the greatest extent possible, a single consistent criterion should be applied for the classification of all commodities of a similar class. To illustrate, currently, most articles of cork are classified by their MATERIAL COMPOSITION (e.g. bottle stoppers, bulletin boards, floor tiles). However, certain articles of cork are classified by their FUNCTION/USE (e.g. insoles, fishing bobbers, dart boards, etc.). Applying the same principal criteria for classification of all products – essentially, “Picking-a-Lane”- would simplify the process greatly and reduce error-inducing exceptions.
Second, are the impenetrable way commodities are often expressed in the HS. This problem is familiar to anyone who has ever tried to classify a Blow drier (“Electro-thermic hair dressing apparatus”), GPS device (“Radio navigational aid apparatus”), or Baby food (“Homogenized composite food preparations”).
The antidote to this semantic problem is to expand the HS lexicon so that its designations and definitions are teased apart, and effort should be put toward seeding the nomenclature with everyday commercial terms. Expanding the links between the HS and other industry standards (e.g. Taxonomic Serial Numbers, Chemical Abstracts Service Registration numbers, ASTM International standards, etc.) would provide much support to such an initiative. The result would undoubtedly shrink the gap between how products are described by trade and how they are expressed in the HS, reducing a user’s need for interpretive aids, and/or prior familiarity of HS terminology.
Fundamentally, we remain confident that the HS still serves its purpose very well. Nevertheless, we are grateful to the WCO for having invited us to participate in this very worthwhile exercise.