What importers need to know
Every five years, the World Customs Organization (WCO) reviews the HS to ensure it stays up to date in light of technological advancements, new products and global issues. The WCO recently adopted 351 sets of amendments to the HS, which will take effect on January 1st, 2022 in Canada and on January 27th, 2022 in the U.S.
These changes will affect businesses importing goods. Using out-of-date HS classification codes lead to costly delays – your shipment won’t make it through Customs in a timely manner.
Who’s affected by these changes?
Businesses across the world will be affected by these changes. In particular, we’ll see changes in the following sectors:
Chemicals
New provisions added for ozone-depleting substances controlled by the Montreal Protocol, to reduce the production and consumption under the Kigali Amendments. Certain specific chemicals are now identified in the HTS to ease monitoring of substances controlled under the Chemical Weapon Convention, the Rotterdam Convention, and the Stockholm Convention, as well as items containing radioactive elements and isotopes.
Drones
The WCO added specific provisions for unmanned aerial vehicles (UAVs) to simplify their classification.
Tobacco
Due to new advances in tobacco products (such as vaping) and nicotine-based products, the WCO added new provisions to increase visibility in trade statistics and to make classification easier.
Pharmaceuticals
New provisions for:
- Placebos and double-blinded clinical trial kits in Heading 3006.
- Fentanyl-opioid substances and derivatives controlled by the International Narcotics Control Board.
- Cell therapy products. Advances in science and medicine made it necessary to add new provisions.
- Rapid diagnostic test kits for detecting the Zika virus and other mosquito-borne diseases.
Dual-use goods
The WCO has added new subheadings for goods that could be diverted for unauthorized uses, such as radioactive materials or to facilitate the monitoring and control of dual use various products.
Materials controlled under international conventions.
HS 2022 includes new subheadings for the following:
- Certain specific chemicals controlled by the Organization for the Prohibition of Chemical Weapons
- Hazardous chemicals controlled under the Rotterdam Convention
- Persistent organic pollutants controlled under the Stockholm Convention
- Fentanyl-opioids and their derivatives, controlled by the International Narcotics Control Board
E-Waste
There are new provisions for electronic waste. Waste such as batteries, printed circuit boards, and cathode ray tube glass have been moved from Heading 3825 and 7001 to Heading 8549, to provide greater visibility and assist countries in adhering to the Basel Convention.
Electronics
New headings were added for 3D printers to differentiate based on the type of deposit, such as rubber, plastic, plaster, or ceramics. Smartphone technology has changed rapidly over the past few years. To that end, the WCO added a new subheading and a chapter note to define the term. Flat panel display modules have been defined and a classification was added. LED bulbs, including the solar-powered variety, and fixtures classifications have been added. HS codes for television cameras, digital cameras, and video camera recorders have been broken down to facilitate the monitoring and control of dual use items.
Food Related
There are new provisions for:
- Flours, meals, and pellets of fish, crustaceans, molluscs, and other aquatic invertebrates that are fit for human consumption in Heading 0309.
- Edible non-living insect products now specifically provided for in Heading 0410.
- Edible microbial fats and oils.
- Truffles and mushrooms, due to increased volumes in trade.
Virgin olive oil and extra virgin olive oil have been restructured due to increased trade, and to align with definitions specified in the IOC trade standard for olive oils and olive pomace oils. The Yogurt Heading 0403 will include yogurt containing added spices, coffee, coffee extracts, plants, plant parts, cereals or bakers’ wares. In the US, blanched peanuts have been moved from Heading 2008 to 1202, retaining the same duty rates and quota treatments.
Automotive
There’s a new provision in Subheading 8707.22 for automotive windshields, rear windows, and other framed windows for motor vehicles under Headings 8701 to 8705, as well as automotive windows incorporating heading devices. Additionally, the WCO created new subheadings 8701.21 to 8701.29 to provide for hybrid and electric vehicles. HS 2022 expands provisions in Heading 8704 for certain tractors and motor vehicles that transport goods to include new subheadings for heavy-duty vehicles that are either hybrids or fully electric.
Recreational Boating
HS 2022 includes new breakdowns for inflatable boats, sailboats, motorboats, and canoes.
Amusement Park Equipment
New HS breakouts and definitions were created to distinguish amusement park rides from water park amusements, and fairground amusements, with new HS codes for such things as roller coasters, bumper cars, and water rides.
Cultural Articles
In Chapter 97, headings have been subdivided based on age criterion or category to facilitate monitoring and countering illicit trade and trafficking in cultural articles.
What do importers need to do?
Before these changes go into effect, businesses must review their lists of impacted products, and then update the HS classification codes as well as any affected free trade agreements. Next, they must notify Livingston of these changes so we can continue to support your trade needs.
How Livingston can help
HS 2022 brings enormous changes to the HS codes in place. If you haven’t updated your codes, you risk significant supply chain delays as well as increased duties and fees. Livingston can compare your existing list against the proposed changes and provide you with an estimated impact.