The Situation with the Harmonised System
The International Convention on the Harmonized Commodity Description and Coding System, or Harmonised System (HS) for short, is a multipurpose international product nomenclature, used for harmonizing the description, classification and coding of goods traded internationally, collection of revenues by Customs administrations, facilitation of international trade, and collection of data for statistical and comparison purposes, among other things. When the first edition of the HS came into force on January 1st 1988, it was launched with three key objectives; to facilitate the collection, comparison, and analysis of statistics by harmonising the description, classification, and coding of goods in cross-border trade; to reduce the expenses related to international trade; and to facilitate the standardisation of trade documentation and the transmission of data. As of January 1st 2022, the 7th edition of the Harmonised System has been launched, known as HS2022. This new update has included some major changes in how the HS works, with some 351 sets of amendments, recognising new product streams, and addressing new and pressing environmental and social issues.
The Big Changes
Electrical and electronic waste (e-waste), one of the fastest-growing waste sectors, now has specific provisions for its classification, going a long way to help make e-waste management more sustainable. A more simple classification for unmanned aerial vehicles (drones) and niche nicotine-based products (vapes) has been introduced, as well as an entirely new classification for smartphones. Major changes have been conducted in the classification of glass fibres and metal-forming machinery, as well as a new sub-heading for testing kits and tools for rapid diagnostics of pandemics and other illnesses.
A Positive Direction
The changes made to the HS are truly emblematic of the direction in which the e-commerce market is heading; to a more inclusive, sustainable and efficient business environment. The new classification of, among other things, rapid testing kits for Covid-19 is one such example of the e-commerce community recognising the new challenges facing the world, and addressing them in a manner entirely conducive for the betterment of society. All of the new classifications and sub-headings introduced in HS2022 are, broadly speaking, addressing newer, more modern products that have previously been included under different classifications. The re-categorisation of these products show that the e-commerce community is willing to grow and change with the times, eager to make the business environment more able to grow with the times, not work against them. There are still some countries that have yet to sign up to the new HS (most notably the United States, still waiting for a presidential mandate to move forward with the new system), but as the system continues to demonstrates its efficiency and reliability in the ever-changing e-commerce world, getting on board with every new HS system in line with its 5 year update schedule will soon become a necessity for every nation.
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