Experts Warn of Mini Trade Y2K as Trade Codes to be changed in 2022

Global HS Codes and associated tariff codes to be updated next year as experts warn of a mini trade Y2K.


351 Harmonised System (HS) codes along with 1,500 harmonised U.S tariff codes are to be subject to new revisions that may result in many importers/exporters unsure of the correct product classification for getting the products they need.

HS codes exist on more than 5,000 product categories and are monitored by the World Customs Organisation which updates them every five to six years. HS codes are the basis for Harmonised Tariff Schedule (HTS) codes, the 10-digit codes used by countries to determine tariff duty rates.

The 7th edition of the HS is expected to go into effect on 1st January 2022. Most major exporters including the European Union, China, Canada, Australia and the United States have updated their HTS but the UK has not, as of yet.

The update of the codes has seen the deletion of some codes including globes and telephone answering machines according to a Webinar by Flexport.

New additional codes for smartphones, high speed digital cameras and flat panel displays are to be added in the new revision. Also, petroleum resins and other chemical compounds used in the manufacture of chemical weapons will now have codes, in a move that Bloomberg describes as making it easier for authorities to track the importing/exporting of the chemicals.

However, many experts are concerned that many companies are not aware of this change and that they may find themselves in “a Y2K moment” – a reference to the infamous millennium bug scare in 1999.

In the United States, the updated trade codes require a presidential proclamation in the Federal Register with 30 days’ notice and this is the moment that experts such as Tom Gould, Flexport Vice President of Global Customs predict that companies will then start to wake up to this change.

“My fear is that Dec. 1 will come and the presidential proclamation will be published and that’s when people will start to scramble.

“Jan 1 will hit and you’ll have a bunch of people that have products that they need to import but they don’t know the classification because the code that they’ve used in the past is no longer a valid code”, said Mr Gould speaking to Bloomberg.

With a year full of global trade disruption that has hit the UK, China and the US, it seems that there is a new headache for traders that will see them finish the year as they started it, fighting another man made crisis.


 

Post Date: 25/11/2021

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