Implementation of WCO HTS Changes Expected No Earlier Than Feb. 1st (10-Digit HTS Nos May be Available Soon)

President is Able to Sign Proclamation in 2006 (60-Legislative Days Have Passed)

The International Trade Commission and government sources state that the Office of U.S. Trade Representative and Congress recently redetermined that the required 60-legislative day Congressional layover period that must expire before President Bush can sign a proclamation amending the HTS for the WCO changes actually expired during December 4-8, 2006. (Previously, sources had thought that only 57 legislative days had passed before Congress adjourned for 2006.)

As a result, the President can sign the WCO Proclamation in the remaining days of 2006.

Implementation of WCO Changes Expected No Earlier Than February 1, 2007

Even so, government sources state that implementation of the WCO-recommended nomenclature changes to the HTS will be delayed beyond January 1, 2007. Sources indicate that the draft language of the proclamation states that the effective date will be February 1, 2007, or 30 days after publication in the Federal Register, whichever is later.

(Effective January 1, 2007, the ITC states it will implement on its Web site (www.usitc.gov ) an electronic version of the 2007 HTS (Preliminary). It will not contain the WCO changes. No GPO-printed copies of the 2007 HTS will be created from this January 1stelectronic version.)

WCO Version of 2007 HTS to be Posted When WCO Proclamation Signed (Will Contain 10-Digit Tariff Numbers)

As soon as possible after the President signs the Proclamation implementing the WCO changes, the ITC states it will post an updated electronic version on its Web site, and the Government Printing Office (GPO) will begin publication of a hard-copy (paper) version of the 2007 HTS and mail it to subscribers.

According to ITC sources, this WCO version of the 2007 HTS will initially be posted for review purposes only; it will contain the 10-digit tariff numbers but will not go into effect until February 1, 2007, or 30 days after publication of the proclamation in the Federal Register, whichever is later. ITC sources state that it is being posted early to assist the trade.

"Blanket" Authorization for Immediate Delivery Procedures Will Allow Any Lower WCO Duty Rates 10 Days "Early"

U.S. Customs and Border Protection (CBP) has issued a notice stating that a blanket authorization will be offered for the period 10 days prior to the effective date of the WCO tariff changes, that will allow filers to take advantage of any lower duty rates contained therein. (Although the ITC has stated that its implementation of the WCO changes is intended to ensure substantial rate neutrality, some rate changes are expected). (See ITT's Online Archives or 12/15/06 news, 06120705 for recent BP summary of CBP's blanket authorization notice for year-end and WCO changes.)

CBP Also Expected to Make Available a 15-Day "Grace Period" for Rejects, Etc.

Although the details are sketchy and no instructions have yet been issued, CBP sources state that the agency expects to provide a 15-day grace period after the implementation of the WCO HTS changes for the refiling of entries rejected due to classification errors resulting from WCO changes. This 15-day grace period, plus the minimum 30-day delay in the proclamation for the WCO changes, will provide the trade with their requested 45-day lead time. Sources note that some type of evidence (that the reject was due to WCO changes) may need to be available in some manner.

Additional Proclamations (Maybe 1 to 4) Expected for Trade Bill Changes, Conforming FTA Rules of Origin Changes, Etc.

According to government sources, approximately one to four other proclamations will be issued to implement various other changes to the 2007 HTS, including Chapter 99 tariff changes contained in recently passed H.R. 6111, and changes to the HTS Rules of Origin for various free trade agreements (FTAs) such as NAFTA, that are necessitated by the WCO changes.

(See ITT's Online Archives or 12/11/06 news, 06121105 for BP summary of USTR press release on trade bill's passage.)

WCO Changes Will Affect 83 HTS Chapters and May Affect Duty Rates

According to the ITC, the WCO tariff number and note modifications will consist of several hundred amendments affecting 83 chapters and more than 240 headings throughout the nomenclature. Although the tariff changes are designed to ensure substantial rate neutrality, in certain instances the duty rate for a product may change.

WCO Modifications Listed by ITC and in 35 BP Summaries

The ITC has issued a detailed report that lists the tariff number (up to eight digits only) and note changes for 2007 that are the result of WCO changes, etc. In addition, Broker Power has issued a 35-part series of summaries on these ITC-reported changes. Note that the ITCs report lists the duty rates, but will not reflect any corrections the ITC has made since its issuance.

(See ITT's Online Archives or 06/08/06, 06/09/06, 06/13/06, 06/15/06, 06/16/06, 06/19/06, 06/20/06, 06/21/06, 06/22/06, 06/23/06, 06/26/06, 06/27/06, 06/28/06, 06/29/06, 06/30/06, 07/06/06, 07/24/06, 07/26/06, 07/27/06, 07/28/06, 07/31/06, 08/04/06, 08/14/06, 08/31/06, 09/14/06, 09/19/06, 09/27/06, 10/02/06, 10/06/06, 10/10/06, 10/12/06, 10/16/06, 10/17/06, 10/20/06, 10/24/06, and 10/25/06 news, 06060815, 06060915, 06061320, 06061510, 06061620, 06061920, 06062020, 06062120, 06062230, 06062330, 06062630, 06062730, 06062820, 06062910, 06063015, 06070625, 06072415, 06072615, 06072820, 06073120, 06080430, 06081425, 06083115, 06091415, 06091920, 09062735, 06100225, 06100630, 06101030, 06101210, 06101620, 06101720, 06102035, 06102420, and 06102530 for BP summaries of the ITC's final report on the WCO proposed changes. See ITT's Online Archives or 07/21/06 news, 06072105, for BP Addendum to Chapters 1-63.)

ITC's 2nd Note on 2007 (posted mid-December 2006), available at http://usitc.gov/concerning_2007_hts.asp

ITC Final Report on HTS changes, including duty rates (Inv. No. 1205-6 (Final), USITC Publication 3851, dated April 2006) available at http://hotdocs.usitc.gov/docs/tata/hts/Pub3851.pdf

BP Note on HR 6111 Trade Provision Changes

According to government sources, the recently passed trade bill provisions in HR 6111, which includes a number of HTS Chapter 99 tariff changes, may be the subject of a Proclamation that could be signed as early as Wednesday, December 20, 2006.