ITC Issues Preliminary Report on Proposed HTS Changes for 2007 (Part I)
The International Trade Commission (ITC) has posted to its Web site its preliminary report for its investigation (No. 1205-6) on proposed modifications to the Harmonized Tariff Schedule (HTS). According to the ITC, these proposed modifications are scheduled to become effective in January 2007.
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Proposed HTS Modifications are the Result of WCO Recommendations, Etc.
According to the ITC, it is required to keep the HTS under continuous review and to recommend to the President modifications to the HTS (1) when amendments in the International Convention on the Harmonized Commodity Description and Coding System (Harmonized System, or HS), and the Protocol thereto, are recommended by the World Customs Organization (WCO) for adoption, and (2) as other circumstances warrant.
(The ITC has previously stated that written comments in response to this preliminary report will be forwarded to the U.S. Trade Representative (USTR), and that the ITC is scheduled to submit its final report to the President on March 15, 2006.)
This is Part I of a series of summaries on this report. Part I lists the HTS chapters, sections, etc. which are affected by the proposed modifications, etc.
Proposed HTS Modifications Affect Certain Sections, Most Chapters, Etc.
According to the ITC, the bulk of the recommended modifications are based upon decisions taken by the WCO's Harmonized System Committee (HSC) during its October 1999 through May 2004 sessions.
(Although the aim of this latest review cycle was to concentrate efforts on high-technology goods of Chapters 84, 85 and 90, the ITC states that the proposed modifications contain several hundred amendments affecting 83 chapters and more than 240 headings throughout the nomenclature. These changes are intended to update the nomenclature or clarify the classification of particular goods.)
According to Appendix B of the ITC's report, the proposed modifications affect the following HTS Sections, chapters, etc. (partial list):
Section VI; Section XI; Section XVI; and Section XVI.
All HTS Chapters except Chapters 10, 16, 17, 18, 21, 24, 35, 36, 45, 49, 67, 69, 75, 76, 77, 82, 89, and 97;
Proposed HTS Modifications Are Required to Ensure "Substantial Rate Neutrality"
According to the ITC, Section 1205(d) of the Act provides that the ITC cannot recommend a modification to the HTS unless, among other things, the change ensures "substantial rate neutrality."
The ITC adds that any modification that would change a rate of duty must be consequent to, or necessitated by, recommended nomenclature changes.
Preliminary Report Contains Overview and Recommendations, Appendices, Background Document, Etc.
The ITC's preliminary report includes: an Overview and Recommendations, Appendix A (Federal Register notices concerning the investigation), Appendix B (proposed modifications to the HTS), Appendices C and D (correlation tables), Appendices E-I (written submissions), Appendix J (definitions of tariff and trade agreement terms), and the WCO Background Document.
ITC report (Publication 3764, Inv. No. 1205-6, dated March 2005), including Appendices A-J and WCO Background Document available at http://www.usitc.gov/tata/hts/other/rel_doc/fr/index.htm