The World Customs Organisation (WCO) on January 18 announced the publication of the public version of its ‘Interim Report on the Exploratory Study on a Possible Strategic Review of the Harmonised System (HS)’, as well as its presentation, ‘An Introductory to the Exploratory Study on the Possible Strategic Review of the HS’.

You might be wondering why the WCO is doing this. Quite simply, it is the guardian of the Harmonised Commodity Description and Coding System, also known as the Harmonised System, or HS, and consequently has the obligation to ensure its ongoing relevance and continued fitness for purpose in the twenty- first century.

The HS, initially adopted by the WCO on June 14, 1983, is an international customs classification system which assigns a unique six-digit code to a product or groups of products. The first two digits constitute the tariff chapter, the first four digits the tariff heading and the full six digits the tariff subheading; the latter constitutes the international code. Subsequent digits, which can be up to 12, constitute a country-specific code. The HS came into effect on January 1, 1988, the date that South Africa became a signatory to the HS Convention.

The study is being conducted because of the age of the HS and the fact that it was derived from an even older Customs Cooperation Council Nomenclature, which was developed in the 1950s. Over this time, many changes have occurred in the trade system, customs and the evolution of products, the latter a process which is never-ending. Then, too, the maintenance of the HS can be challenging in a trade environment that is characterised by more diverse users, a faster pace of trade, rapidly changing products and more complex policy requirements.

The WCO’s exploratory study is a two-year study into the ‘health’ of the HS and is intended to provide insight into whether there are improvements or enhancements that could improve the functioning of the HS or its usability and sustainability. The study’s goal, in addition to the ‘health’ element, is to provide an assessment of feasible strategies and options available to ensure its long-term viability.

The study’s outputs are for an initial report to provide the WCO HS Committee (HSC) with proposals that fall within the scope of the five-year review cycle. The final report intends to articulate the options for strategic changes to the HS for consideration by the WCO members.

The study’s scope is to consider the annex to the HS Convention, its tools, including explanatory notes, compendium of classification opinions, alphabetical index, and WCO trade tools. If you are not already a subscriber to the WCO trade tools (www.wcotradetools.org), you should seriously consider subscribing.

The initial report strongly affirms the HS as a crucial trade classification system with no identified superior alternative. It also recognises that there are areas where improvements to the HS could be made to improve usability or extend its capabilities.

The WCO’s analysis consists of two sections. The first deals with the potential improvements to specific areas/aspects of the HS, its tools, and procedural matters to strengthen the usability and predictability of the HS. The second explores potential strategies to respond to changing needs, as some new expectations on the HS can be challenging or infeasible as the HS is currently structured.

All inputs for the report were collected through discussion, online surveys, symposia, and direct submissions from the WCO members and other stakeholders, including representatives of intergovernmental organisations, nongovernmental organisations, international industry associations, national government agencies, the private sector and academia.

While the final analysis stage is already under way, the project remains open to further proposals or comments. As a consequence, the WCO is accepting inputs, but if you want to provide comments, you will need to act fast as the drafting of the final report is in process.The report is expected to be presented to the WCO’s HSC on September 4.

If you want to make a contribution to the study, you should contact the HS study team at project.HSStudy@wcoomd.org