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Home » Don’t Let 2022 Harmonized Schedule Updates Slow Your Supply Chain

Don’t Let 2022 Harmonized Schedule Updates Slow Your Supply Chain

February 8, 2022
Gabrielle Griffith, SCB Contributor
The Harmonized Schedule is commonly referred to as our industry’s “universal language.” Its logical and systematic format is not only the basis for identifying goods and their corresponding duties and taxes, but is also for devising trade policies, monitoring controlled goods, developing specific rules of origin, determining freight rates, analyzing transportation statistics and more. Don’t let the 300-plus updates to the schedule in 2022 slow down your supply chain.

A new Harmonized Schedule was rolled out on Jan. 1, 2022. Familiarity with the updates of this “language of trade” is imperative. It’s said that the best defense is a good offense; for supply chains, offense takes the form of preparation. Knowing the who, what, when, where and why enables companies to identify the points of supply that need reinforcement in light of these changes.

Who: The Harmonized Tariff Schedule is set forth by the World Customs Organization. The WCO’s primary objective is to enhance efficiency of member customs administrations. It adopted the HS Convention to facilitate international trade by harmonizing the description and classification of goods.

What: In the latest update, 350 new tariff numbers have been added. Some address advances in technology, including:  

  • Smartphones. New header 8517.13.0000 replaces 8517.12.0050, and specifically defines “smartphones” in the new Legal Note 5 to Chapter 85.
  • Unmanned aircraft. New header 8806.10 replaces 8802.11, 8802.12 and 8802.20 for classification of unmanned aircraft. New Legal Note 1 to Chapter 88 will define unmanned aircraft.
  • Aircraft parts. New header 8807 addresses all parts of aircraft, including unmanned, as well as helicopters, manned aircraft and gliders.
  • Machines for additive manufacturing, also known as 3D printers. Subheadings address printers that deposit metals (8485.10); plastics or rubber (8485.20); plaster, cement, ceramics or glass (8485.30), or other (8485.80).

Other updates address global environmental changes as well as “dual-use” items. The latter have civil applications as potential use as military-based weapons of mass destruction. By specifically providing for the following types of items, WCO is able to better track the movement of these items globally. The full list of impacted tariff codes can be accessed at http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/nomenclature/instruments-and-tools/hs-nomenclature-2022/table-i_en.pdf?la=en.

When: HS 2022 is the 7th edition of the Harmonized Schedule. It went into effect on Jan. 1, 2022 and set forth 351 amendments.

Where: Updates were to the WCO Harmonized Schedule, which will in turn impact the U.S. Harmonized Tariff Schedule and U.S. Census Schedule B. Industry should not forget the necessary updates within internal systems such as Shippers Letters of Instruction (SLIs), Automated Commercial Environment (ACE) and SAP templates.

Why: The changes recognize evolving industries and trade patterns, as well as environmental and social issues of global concern. Examples include new codes surrounding e-waste, new tobacco and nicotine-based provisions, specific codes for unmanned aerial vehicles (UAVs) and smartphones, and new provisions for placebos to facilitate cross-border medical research.

The best way to address the 2022 changes is to compare the updated list against your organization’s existing classification data, or recommend that your clients do so.

Outlook:

Don’t get caught with outdated HS numbers in 2022. Inaccuracies in HS codes could not only mean incorrect assessment of duties and taxes, but also unnecessary delays in your supply chain. Take steps now to inform yourself and your clients of the 2022 HS tariff changes.

Gabrielle Griffith is director of BPE Global.

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