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Primer on the ASEAN Harmonized Tariff Nomenclature

 

1.   What is the ASEAN Harmonized Tariff Nomenclature (AHTN)? 

The AHTN is an 8-digit commodity nomenclature that is based on the Harmonized System (HS) of the World Customs Organization (WCO).  It was conceptualized by the ASEAN Member States (AMSs) in order to have a common tariff nomenclature to facilitate trade within the region. The first AHTN Code was adopted in 2004, incorporating products that are significantly traded by the AMSs.  The AHTN is used as a:  

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 Uniform tariff nomenclature within ASEAN;

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Base for preferential tariff purposes in AFTA and other free trade areas; and

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Base for the collection of trade statistics.

 2.   What is the structure of the AHTN?

 

The AHTN is comprised of the (i) General Rules for the Interpretation of the HS, (ii) Section and Chapter Notes, including Subheading Notes, and (iii) a list of headings arranged in systematic order and, where appropriate, subdivided into subheadings.

 

Adhering to the 6-digit level of the HS, the 7th and 8th digits of the AHTN Code are assigned to ASEAN subheadings.  The 8-digit subheadings reflect the products of interest to the ten (10) AMSs. However, national subheadings required by Member States that were not included in the AHTN shall be dealt with beyond the 8-digit codes.

 

Since the AHTN adheres to the structure of the HS, any proposed HS amendments are adopted in toto.  Hence, the AHTN 2012 version incorporates the HS 2012 amendments, as what was done in 2004 and 2007. The total number of Philippine AHTN 2012 tariff lines (including the alpha-numeric codes) is 9,820.

3.    What are the advantages of the AHTN?

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Establishes uniformity of application in the classification of goods in ASEAN;

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Enhances transparency in the classification process for goods in the region; and

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Simplifies the tariff nomenclature system of AMSs to facilitate trade in the region. 

4.    What is the AHTN Protocol?

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Defines the legal framework governing the implementation of the AHTN and its implementing rules and explanatory notes.

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Signed by the Governments of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,

Thailand and Vietnam on August 07, 2003 in Manila.

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The Second Protocol to amend the Protocol Governing the Implementation of the ASEAN Harmonized Tariff Nomenclature was signed
on April 08, 2010 in Vietnam. 

5.     What institutional arrangements oversee the AHTN Protocol?

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The ASEAN Directors-General of Customs - responsible for monitoring, reviewing, supervising all aspects relating to the implementation of the AHTN Protocol.

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The ASEAN Finance Ministers Meeting – is the forum for all decisions relating to the implementation of the AHTN Protocol.

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The ASEAN Secretariat - provide the necessary support for supervising, coordinating and reviewing the implementation of the AHTN

Protocol and assist the ASEAN Directors-General of Customs on matters relating thereto; and responsible for assisting the experts’ panel and AMSs in monitoring and reviewing the AHTN.

6.     What are the obligations of ASEAN Member States?
 

Each AMS shall abide by the HS Code and shall apply the AHTN up to the 8-digit level for all trade transactions for tariff, the collection
of statistical data and other purposes.  Amendments to the AHTN shall only be made in accordance with Article 5 (Amendments of the AHTN) and
 Article 6 (Amendment Procedures) of the Protocol. 

7.         How do AMSs provide for national subdivisions?

     §  Beyond the 8-digit AHTN level, each AMS could create national tariff lines through their domestic procedures. The Philippines assigns alpha-numeric codes to denote its national tariff lines, e.g.:

Heading

AHTN Code

Description

Rates of Duty (%)
2012-2015

73.19   Sewing needles, knitting needles, bodkins, crochet hooks, embroidery stilettos and similar articles, for use in the hand, of iron or steel; safety pins and other pins of iron or steel, not elsewhere specified or included.  
 

7319.40.00

-  Safety pins and other pins:

 
 

7319.40.00A

- -  Safety pins

10

 

7319.40.00B

- -  Other pins

1

 

7319.90

-  Other:

 
 

7319.90.10

- - Sewing, darning or
     embroidery needles

3

 

7319.90.90

- -  Other

1

bulletTo incorporate newly created national subheadings in the AHTN, proposals for amendments shall be made by the AMSs to the ASEAN
 Directors-General of Customs through the ASEAN Secretariat.
bulletThe ASEAN Directors-General of Customs shall be the forum to allow amendments to the AHTN.  They may convene an experts’ panel
consisting of representatives from all the AMSs.  The decisions of the ASEAN Directors-General of Customs shall be made by consensus.

8.         In what instances may the AHTN be amended?

 

AHTN may be amended when:  (i) there are amendments to the HS Code; (ii) there is amendment to the ASEAN subheadings in the
AHTN for purposes of simplification; and (iii) there is amendment arising from the requirements of AMSs, changes in technology, etc.

 

9.         What are the criteria used for providing a subheading in the AHTN?

    a.    MFN or ASEAN Trade in Goods Agreement (ATIGA) rates of duty across the products within the heading or subheading are different;

    b.    Import and/or export for the product amounts to at least one million US dollars (US$1M) for the last three (3) years preceding the review;

    c.
    Subheadings should reflect a single, unique code for a defined commodity to avoid ambiguous criteria for classification;

    d.
    Classifications can be based on the criteria which have been utilized by a majority of AMSs;

    e.
    Classifications for national statistical and other non-tariff-purposes may be dealt with at the national level, i.e., at the 8-digit level and beyond;

    f.     Classifications should take into account international conventions;

    g.
    Classifications based on seasonal tariff rates should be dealt with through domestic procedures of the affected AMS;

    h.
    Classifications, other than the above, for tariff purposes, and which is country-specific should be dealt with in accordance with the procedures
in Articles 5 and 6 of the Protocol.  In this case, efforts should be made to establish common regional criteria for affected subheadings to avoid proliferation of tariff lines; and

    i.
      Classifications can be created for the purposes of tariff reduction and these may be reflected as an extraction of the AHTN subheading as a transitional measure.
 

10.   What is the legal basis of the Philippines for the implementation of the AHTN? 

The Tariff Commission is mandated by EO 688 dated May 1, 1981 to align the Philippine Tariff Nomenclature with all future amendments
to the Customs Cooperation Council Nomenclature (CCCN).  Further, the Philippines is bound by Article 4 of the ASEAN Agreement on Customs
dated March 1, 1997 and the AHTN Protocol signed by the AMSs. A NEDA Board Resolution is issued upon the completion of the required
procedures to adopt the AHTN.

11.   What are the implications of Philippine adoption of the AHTN 2012?

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Certain Philippine tariff lines, e.g., in-quota/out-quota, completely-knocked-down pack under the Motor Vehicle Development Program
and those covered by the new EOs, were accorded with AHTN 2012 Codes beyond the 8-digit level;

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Products under the Jewelry Industry Development Act (RA 8502) were correlated to the AHTN 2012;

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Information dissemination to help end-users familiarize with the AHTN and its amendments;

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Updating of the supplementary explanatory notes and drawing up of the correlation table between the AHTN 2007 and the AHTN 2012;

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Alignment of classification of products under the various free trade areas with the latest AHTN nomenclature; 

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Correlation of products indicated in Schedule LXXV under the World Trade Organization (WTO) to ascertain that the bound rates are
faithfully reflected; and 

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Alignment/integration of the Philippine Standard Commodity Classification (PSCC) Code to incorporate the changes made to the AHTN. 

12.       What publications are related to the implementation of the AHTN?

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Supplementary Explanatory Notes – a compilation of the official interpretation of the ASEAN subheadings.

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Alphabetical Index – an alphabetical list of the articles to facilitate the location of references in the AHTN or the supplementary
 explanatory notes to any of the products or articles mentioned therein.

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Correlation Table – an essential guide for the transposition of the AHTN 2007 tariff lines to the latest version, the AHTN 2012. 

13.       When is the next cycle of review of the AHTN?

Amendments to the HS are implemented every four to six years by the WCO.  Since the AHTN follows the amendments of the HS, the next
 cycle of review is before 2017.

 

     

      (PROTOCOL GOVERNING THE IMPLEMENTATION OF THE ASEAN HARMONISED TARIFF NOMENCLATURE ) CLICK HERE