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5368.0.55.016 - Information Paper: Proposed Changes to Statistical Codes in the HTISC, 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 13/05/2011  First Issue
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INTRODUCTION

This information paper presents a draft of proposed changes to Merchandise trade import statistics that will apply from 1 January 2012. These changes are the result of an update to the international Harmonized Commodity Description and Coding System (HS), and a review of statistical codes.

As a result of these updates it is necessary to change the Combined Australian Customs Tariff Nomenclature and Statistical Classification (the Customs Tariff). This information paper provides a brief background to these changes but focuses on the impact on the statistical code extensions. It provides a comparative view of the existing and proposed 2012 hierarchical structure of the Customs Tariff by chapter, and a correspondence between the 2007 and 2012 versions of the Customs Tariff at the 10 digit level. The 10-digit level of the classification is also known as the Harmonized Tariff Item Statistical Code (HTISC).

This paper presents details from the Customs Tariff for information to help clients understand the proposed changes to statistical codes. The Australian Customs and Border Protection Service (Customs and Border Protection) will produce the 2012 Customs Tariff later in the year. This paper describes how clients can provide feedback on the proposed statistical code changes or draft correspondences. A similar consultative approach was used for the 2012 changes to Australian Harmonized Export Commodity Classification, with the preliminary statistical structure released on 24 March 2011 - see Information Paper: Proposed Changes to Statistical Codes in the AHECC, 2012 (cat. no 5368.0.55.015).


BACKGROUND

Australia and most other countries use the HS for the classification of internationally traded goods that pass their country's customs frontier. The HS is a 6-digit hierarchical classification designed by the World Customs Organization (WCO). This classification is updated every five years to keep the commodity codes relevant. While the international HS provides codes for over 5,000 commodities, in some cases further detail is required to enable identification of goods which are of particular interest or importance to Australia.

Australia extends the HS to produce the Combined Australian Customs Tariff Nomenclature and Statistical Classification (the Customs Tariff) (published by Customs and Border Protection) to classify imports. The extensions exist:

  • for Customs and Border Protection purposes, to differentiate between imported goods grouped under a single 6-digit HS code. This is generally driven by the need to identify varying import duty rates on similar goods. This is achieved by adding two digits to the HS code, making an 8-digit code. This extension is maintained by Customs and Border Protection;
  • for statistical purposes, to provide a finer level of detail. This is achieved by adding two digits to the Customs 8-digit codes (creating a 10-digit code). Statistical codes are maintained by the ABS.

Australia extends the HS to produce the Australian Harmonized Export Commodity Classification (AHECC) (published by the ABS) to classify exports. The extensions exist:
  • for statistical purposes, to provide a finer level of detail. This is achieved by adding two digits to the 6-digit HS codes (creating an 8-digit code). Statistical codes are maintained by the ABS.

INTERNATIONAL REVIEW

It is mandatory for signatories to the HS convention (including Australia) to implement the revised international classification in its entirety on 1 January 2012.

The HS was first introduced on 1 January 1988 and has been revised in 1990, 1996, 2002 and 2007.

The 2012 revisions affect 43 of the 98 chapters (2-digit level) in the classification through note changes and/or classification changes. Extensive revisions have been made to the structure of the classification in Chapters 1 - 3, 16, 27, 29, 61 - 62, and 96. In some instances, the WCO has retained a code even where there has been a change in the scope of that code in the 2012 version. Users of the classification need to be aware of such instances.

The most significant changes are:
  • movement of goods in Chapters 30, 39, 48, 56, 61, 62, and 63 to a new code 9619.00 "Sanitary towels (pads) and tampons, napkins and napkin liners for babies and similar articles, of any material";
  • substantial re-arrangement of goods in Chapter 3 as well as moving some goods from Chapters 5 and 16 into this chapter; and
  • substantial re-arrangement of goods in Chapter 29 as well as moving some goods from Chapter 30 into this chapter.

In the hierarchy of the HS there were no changes made to either the description or the numbering of chapters.

A number of new 4 and 6-digit codes have been created and a number of existing 4 and 6-digit codes ceased. This has resulted in a small net increase in the number of these codes, as shown in the table below.

Number of HS codes (1)
CurrentHS2012
4-digit headings1,2251,228
6-digit headings5,0565,206
(1) Counts includes only codes in the HS. It excludes codes in Chapter 99 (statistical codes and administrative codes) which is not part of the HS.

More information on the HS review is available on the World Customs Organization website.


CUSTOMS DUTY SPLITS

On 23 March 2011 the Customs Tariff Amendment (2012 Harmonized System Changes) Bill 2011 was introduced to Parliament. This Bill implements the HS2012 changes for Australia and defines the rates of duty and preferences that will apply to imported goods. This determines which HS 6-digit headings will be split into 8-digit headings. This may impact on some statistical codes.


AUSTRALIAN STATISTICAL CODE EXTENSIONS

Changes made to the HS 6-digit codes and the 8-digit Customs and Border Protection codes impact on the Australian statistical code extensions. Further to this, the ABS has undertaken a review of the Australian statistical code extensions. A substantial review of statistical codes was last undertaken in 1997, with a limited review undertaken in conjunction with HS 2002. These reviews strive to keep the statistical codes relevant to the needs of a wide range of users, while limiting the size and complexity of the classification by ceasing statistical codes. This assists accurate reporting. The review considers:
  • goods which are no longer traded by Australia
  • low value trade and
  • accuracy of reporting.

The result of this investigation was the proposed ceasing of a number of statistical codes spread across many chapters in the Customs Tariff. The changes resulting from this investigation will be implemented on 1 January 2012. In some cases statistical codes are impacted by changes as a result of HS2012 amendments. Free Standing Descriptors, which are designed for users of merchandise trade statistics, are being rewritten for many chapters, but are not proposed to be released until December 2011.


DRAFT TARIFF

The spreadsheets available from the Download tab show the changes proposed for 2012. The first worksheet (Table 1) is the correspondence between ceasing codes and their proposed 2012 replacement codes. This enables users to identify the corresponding Customs Tariff statistical code for a specific commodity as of 1 January 2012.

The layout of the Customs Tariff in this information paper differs from that to be released by Customs and Border Protection. For example, in the spreadsheets statistical codes are combined with the HS 8-digit and presented as a 10-digit number. There are separate columns for 2-digit (Chapter), 4-digit (Heading), 6-digit (HS 6 Code) and 8-digit codes (Customs 8 Codes). The alignment of some statistical codes will differ from that in the Customs Tariff. The spreadsheets include some 9-digit codes which will not appear in the Customs Tariff version. The 9-digit codes have no formal use and result from the system used to produce the ABS version. Details from the Customs Tariff presented in the spreadsheets are included to assist clients' understanding of the current and proposed statistical codes. When the new version is released by Customs and Border Protection it will be in the same format as currently presented on the Customs website.

Each section of the classification is represented by a separate spreadsheet (Tables 2 - 21) and each spreadsheet includes a worksheet for each chapter in that section. The page set-up of the worksheet for each chapter is:
  • on the left hand side of the page, the current classification structure is shown; and
  • on the right hand side of the page, the proposed classification structure is shown, including codes which become operative on 1 January 2012. The last two digits of the proposed new codes end in letters - these are the proposed changes and their final codes have not yet been allocated

The complete current and proposed 2012 Customs Tariff structures are shown. Statistical codes that are unchanged will retain their current 10-digit codes and will usually appear on the same line on both sides of the spreadsheet. In some cases the WCO has changed the description of a HS code (generally to clarify what should be reported), but there has been no change to the goods classified under that code. In these cases there is no change to the correspondence.

Any current statistical codes that are not shown in the proposed 2012 structure are proposed to be ceased. New codes will be lined up as closely as possible with the codes they replace. New codes are not given a complete 10-digit code, but the relevant HS 8-digit code and an extension of two characters. If there is only one changed statistical code under a HS 8-digit code it is allocated the suffix 'xx'. If there is more than one changed statistical code under a HS 8-digit code then suffixes 'xx', 'xy' etc are allocated. When the final classification is released these suffixes will be replaced with digits to provide 10-digit codes. To identify the detail of which codes replace which codes these classification spreadsheets need to be used in conjunction with the correspondence in Table 1. The correspondence identifies codes that are proposed to cease and their replacement code(s). Some codes are partially or completely replaced by codes in other chapters.

In some cases proposed changes to statistical codes have resulted in changes to the unit of quantity. Feedback is also invited on these proposed units of quantity.

The following provides examples of the different types of changes that may occur with the introduction of the 2012 Customs Tariff. These examples are taken from Chapter 1 which can be found in Table 2.1 in the spreadsheets and Chapter 90 which can be found in Table 19.1 in the spreadsheets. Correspondence information from Table 1 is shown for these examples. Note that the descriptions of the HS codes used in these examples are not necessarily the official HS descriptions and may be abbreviated for illustrative purposes.


EXAMPLE 1 - HS2012 CHANGE ONLY


The WCO has ceased HS 0105.19 (Live poultry other than fowls of gallus domesticus and turkeys) and replaced it with:
  • HS 0105.13 (Ducks),
  • 0105.14 (Geese), and
  • 0105.15 (Guinea fowls).
This change means that the statistical code 0105190018 will cease and be replaced by the codes 01051300xx, 01051400xx, and 01051500xx. This is a change that is required by the WCO under HS2012 so is provided for information only, and is not subject to consultation.

Code(s) proposed to cease on 31/12/2011 (1)Replaced by:
010519001801051300xx
010519001801051400xx
010519001801051500xx
(1) The correspondence shown is available from Table 1 of the spreadsheets available from the Download tab.


EXAMPLE 2 - REVIEW OF STATISTICAL CODES ONLY


The ABS is proposing to cease the existing statistical codes 0105940025 and 0105940026 and replace them with a single code 01059400xx. This change is not a result of WCO HS2012 changes, but is a proposal by the ABS based on a review of the trade patterns of these codes over several years. This is a change where the ABS is seeking feedback if this loss of statistical detail will have a significant impact on the quality of reporting or on the use of the data by industry or government.

Code(s) proposed to cease on 31/12/2011 (1)Replaced by:
010594002501059400xx
0105940026 01059400xx
(1) The correspondence shown is available from Table 1 of the spreadsheets available from the Download tab.


EXAMPLE 3 - COMBINATIONS OF HS2012 CHANGES AND REVIEW OF STATISTICAL CODES


The WCO HS2012 has ceased HS codes 9007.11 (Cameras of less than 16 mm) and 9007.19 (Cameras of 16 mm or more), and replaced them with a new HS 6-digit code 9007.10 (Cameras). The HS code 9007.19 was split into two statistical codes for Surveillance cameras (9007.19.00.40) and Other cameras (9007.19.00.93).

The proposed new structure does not includes this statistical code split under the new HS 6-digit code 9007.10. This is based on the expected trade in the new categories being expected to be low. While the ABS cannot change the HS 6-digit codes, the ABS will accept feedback on any resulting loss of statistical detail which will have a significant impact on the quality of reporting or on the use of the data by industry or government.

Code(s) proposed to cease on 31/12/2011 (1)Replaced by:
900711000190071000xx
900719004090071000xx
900719009390071000xx
(1) The correspondence shown is available from Table 1 of the spreadsheets available from the Download tab.


STATISTICAL IMPACTS

Users of detailed international merchandise trade statistics may be affected when the changes to the Customs Tariff are implemented on 1 January 2012. There will be breaks in the time series for some categories, or combinations of categories, where there is no direct translation between the current and 2012 versions of the classification. The ABS will not be back casting any data to remove these breaks in series, but the classification correspondences will be available for users who wish to do their own analysis. At this stage, approximately 5,900 of the 8,600 imports statistical codes will be unaffected by the changes.

Confidentiality restrictions which apply to current statistical codes which are ceasing will continue to be applied to the proposed corresponding codes. Any new confidentiality restrictions applied from 1 January 2012 will be reviewed in 2012 as data become available. In addition, in accordance with normal procedures, the restrictions will be reviewed every two years, unless there are changes in trading patterns.


OPPORTUNITY TO COMMENT ON THE PROPOSED STATISTICAL CODE CHANGES

The ABS is intending to maintain the current statistical splits where there is a sufficient value of trade. However, there will be wide spread ceasing of statistical codes due to the review outlined above. The ABS would welcome comments on the proposed changes to the Customs Tariff statistical codes and units of quantity outlined in the spreadsheets. Comments should include the following details:
  • the name of the organisation,
  • contact name,
  • telephone number,
  • email address,
  • the statistical code(s) to be changed or modified,
  • the reasons for the requested change, including, as applicable, supporting industry or Government statements.

Further consultation with individual clients may be required once submissions have been received and before the Customs Tariff can be finalised. After the consultation period, the ABS will provide Customs and Border Protection with the statistical codes to be included in the Customs Tariff on 1 January 2012. Customs and Border Protection will release the new Customs Tariff on their website. Final correspondences and Free Standing Descriptors for the 2012 codes will not be made available by the ABS until December 2011.


DUE DATE FOR FEEDBACK

All feedback is required by 17 June 2011. Written submissions should be forwarded to:

international.trade@abs.gov.au

or mailed to:

Classification and Confidentiality Manager
Balance of Payments and International Trade Section
Australian Bureau of Statistics, Locked Bag 10
Belconnen ACT 2616

Further information or queries regarding this paper should be directed to Andrew Gibbs of the Balance of Payments and International Trade Section on (02) 6252 5409 or via email international.trade@abs.gov.au.


ABBREVIATIONS

AHECCAustralian Harmonized Export Commodity Classification
Customs and Border ProtectionAustralian Customs and Border Protection Service
Customs TariffCombined Australian Customs Tariff Nomenclature and Statistical Classification
HSHarmonized Commodity Description and Coding System
HTISCHarmonized Tariff Item Statistical Code
WCOWorld Customs Organization



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