Reminder: Major Changes to the Harmonized Tariff Schedule Take Effect for 2007
On January 1, 2007 (or on a later date if delayed), the U.S. Harmonized Tariff Schedule (HTS) will undergo a significant overhaul.
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The HTS will be amended to implement in U.S. law certain international Harmonized System (HS) nomenclature changes recommended for adoption by the World Customs Organization (WCO), and certain Harmonized System Committee (HSC) decisions necessary to ensure uniform application of the nomenclature.
Tariff Number and Note Modifications Will Affect 83 HTS Chapters
According to the International Trade Commission (ITC), the tariff number and note modifications will consist of 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.
For example, extensive changes will be made to HTS Chapter 84 (Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof), and HTS Chapter 85 (Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles), among others.
Tariff Number and Note Modifications May Result in a Change in Duty Rate
The tariff changes are designed to ensure substantial rate neutrality, among other things; however, in certain instances the duty rate for a product may change. In cases where a new subheading represents the combination of two or more HTS subheadings with differing column 1-general (normal trade relations) duty rates, the general rate is derived from the existing subheading which accounts for the preponderance of the trade in the new subheading; however, in certain instances the duty rate for a product may change.
Modifications Must be Proclaimed by President Before They Can Take Effect
The President must proclaim these modifications to the HTS. Such a proclamation can only be issued after the expiration of a 60-day Congressional layover period. As of November 3, 2006, the layover period has lasted 47 days, with 13 days remaining. Days can only be counted when Congress is in session (it is currently not in session).
Modifications Listed by ITC and in 35 BP Summaries
The ITC has issued a detailed report which lists the tariff number and note changes for 2007 that are the result of WCO and HSC recommendations and decisions. In addition, Broker Power has issued a 35-part series of summaries on these ITC reported changes.
(Note that the 2007 duty rates for these tariff changes are only contained in the ITC report.)
(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 other proposed changes. See ITT's Online Archives or 07/21/06 news, 06072105, for BP Addendum to Chapters 1-63.)
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