5368.0.55.022 - Discussion Paper: Proposed Changes to Statistical Codes in the Australian Harmonized Export Commodity Classification, 2017  
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INTRODUCTION

This discussion paper presents a draft of proposed changes to Merchandise trade export statistics that will apply from 1 January 2017. These changes are the result of an update to the International Harmonized Commodity Description and Coding System (HS).

This discussion paper provides a brief background to the 2017 changes to the Australian Harmonized Export Commodity Classification (AHECC). It also provides a comparative view of the existing and proposed 2017 hierarchical structure of the AHECC by chapter, and a correspondence between the 2012 and 2017 versions of the AHECC at the 8 digit level.

This paper also describes how clients can provide feedback on the proposed statistical code changes or draft correspondences. A similar consultative approach is planned for the 2017 changes to Merchandise trade import statistics, with the preliminary statistical structure scheduled for release later this year.


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) to classify imports and the AHECC to classify exports. The extensions exist:

  • for Customs purposes, to differentiate between imported goods grouped under a single 6-digit HS code. This is generally driven by the need to impose 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 the Department of Immigration and Border Protection (DIBP)
  • for statistical purposes, to provide a finer level of detail. This is achieved by adding two digits to the combination of HS and DIBP 8-digit codes for imports (creating a 10-digit code) and to the 6-digit HS codes for exports (creating an 8-digit code). The 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 2017. There are also a set of Complementary amendments to the Harmonized System. It is mandatory that these be implemented by 1 January 2018. However, it is recommended that changes be implemented on 1 January 2017 and this is the approach adopted by DIBP and ABS.

The HS was first introduced on 1 January 1988 and has been subsequently revised in 1990, 1996, 2002, 2007 and 2012. The 2017 revisions affect 41 of the 98 chapters in the classification through note changes and/or classification changes. Extensive revisions have been made to the structure of the classification in Chapters 3, 29, 38, 44, 84, 85, 87 and 96.

The most significant changes are:
  • movement of goods in Chapters 39, 44, 68, 73, 76, 84, 85, 90 and 92 to a new code 9620.00 "Monopods, bipods, tripods and similar articles"
  • substantial amendments to Chapter 3; as a result of the FAO proposal to enhance the monitoring of global food security
  • substantial amendments to Chapters 29 and 38; to facilitate the monitoring of chemical products under several international conventions
  • substantial amendments to Chapter 44; as a result of the FAO proposal to enhance the coverage of trade in wood species
  • substantial amendments to Chapter 84; as a result of the FAO proposal to enhance the data on trade and use of agricultural machinery
  • substantial amendments to Chapter 85; for various reasons
  • substantial amendments to Chapter 87; to provide separately for hybrid electric vehicles, plug-in hybrid vehicles and all-electric motor vehicles.

In the hierarchy of the HS there were no changes made to either the description or the number of 2-digit chapters.

A number of new 4 and 6-digit codes have been created and a number of existing 4 and 6-digit codes ceased.


Number of HS codes (a)

Current
HS2017

4-digit headings
1,234
1,231
6-digit headings
5,229
5,420

(a) 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 review is available on the World Customs Organization website <http://www.wcoomd.org/en.aspx>.


DRAFT AHECC

The ABS has prepared a proposed AHECC, which is presented in spreadsheets showing the changes from 2012 to 2017. The spreadsheets are available from the Download tab in this publication. The first worksheet (Table 1) is the correspondence between ceasing codes and their proposed 2017 replacement codes. This enables users to identify the corresponding AHECC statistical code for a specific commodity as of 1 January 2017.

Each section of the classification is represented by a separate spreadsheet (Tables 2 - 21) and each spreadsheet comprises a worksheet for each chapter. 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
  • on the right hand side of the page, the proposed classification structure is shown, including codes which become operative on 1 January 2017. 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 2017 AHECC structures are shown. Statistical codes that are unchanged will retain their current 8-digit codes and will 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 2017 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 8-digit code, but the relevant HS 6-digit code and an extension of two characters. If there is only one changed statistical code under a HS 6-digit code it is allocated the suffix, eg. 'xx'. If there are more than one statistical codes under a HS 6-digit code then suffixes 'xx', 'xy' 'etc are allocated. When the final classification is released these suffixes will be replaced with digits to provide 8-digit codes. To identify the detail of which codes replace the previous 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 codes. Some codes are partially or completely replaced by codes in other chapters.

The following provides examples of the different types of changes that may occur with the introduction of the 2017 AHECC. Example 1 is taken from Chapter 44 which can be found in Table 10.1 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 - HS2017 CHANGE ONLY

The WCO has ceased HS 4419.00 (Tableware and kitchenware, of wood) and replaced it with:
  • HS 4419.11 (Bread boards, chopping boards and similar boards, of bamboo)
  • HS 4419.12 (Chopsticks, of bamboo)
  • HS 4419.19 (Other, of bamboo)
  • HS 4419.90 (Other), i.e. not of bamboo.

This change means that the statistical code 44190000 will cease and be replaced by the codes 441911ab, 441912ac, 441919ad and 441990ae. This is a change that is required under the WCO changes so is provided for information only, and is not subject to consultation.


Code(s) proposed to cease on 31/12/2016 (a)Replaced by:

44190000441911ab
44190000441912ac
44190000441919ad
44190000441990ae

(a) The correspondence shown is available from Table 1 of the spreadsheets available from the Download tab in this publication.


EXAMPLE 2 - COMBINATIONS OF HS2017 CHANGES AND REVIEW OF STATISTICAL CODES

The WCO has ceased HS code 9406.00 (Prefabricated buildings) and introduced new codes 9406.10 (Prefabricated buildings of wood) and 9406.90 (Other prefabricated buildings). The HS code 9406.00 was split into three statistical codes for Aluminium (94060020), Iron or steel (94060030) and Other (94060040).

The HS2017 structure is:
  • 9406.10 (Prefabricated buildings of wood), and
  • 9406.90 (Other prefabricated buildings).

The proposed new structure includes a statistical code split for Other (9406.90) to Of Iron and Steel (940690xy) and Other (940690xz). This is based on the expected trade in the new categories. This means that Aluminium prefabricated buildings will no longer have their own statistical code. There will be no proposed split for Prefabricated buildings of wood, so the statistical code is 940610xx.


Code(s) proposed to cease on 31/12/2016 (a)Replaced by:

94060020940690xz
94060030940690xy
94060040940610xx
94060040940690xz

(a) The correspondence shown is available from Table 1 of the spreadsheets available from the Download tab in this publication.


STATISTICAL IMPACTS

Users of detailed international merchandise trade statistics may be affected when the changes to the AHECC are implemented on 1 January 2017. 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 2017 versions of the classification. The ABS will not be backcasting 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 4,500 of the 6,000 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 codes directly replacing them. Any new confidentiality restrictions applied from 1 January 2017 will be reviewed 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 are widespread ceasing of statistical codes due to the review outlined above. The ABS would welcome comments on the proposed changes to the AHECC statistical codes outlined in the spreadsheets. The ABS is obliged to implement the international Harmonized System so changes can only be made to statistical code (ie 8-digit) changes. Also, there is a separate process to request additional statistical code splits. See Information Paper: International Trade Classification Feasibility Studies, 2001 (cat. no. 5499.0.55.001).

Comments should include the following details:
  • the name of the organisation
  • contact name
  • telephone number
  • email address
  • the commodity 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 AHECC can be finalised. After the consultation period, the AHECC to be implemented on 1 January 2017 is scheduled to be published in November 2016 in Australian Harmonized Export Commodity Classification (AHECC) - Electronic Publication, Jan 2012 (cat. no. 1233.0). The revised classification will become operative from 1 January 2017 and will be incorporated into the January 2017 issue of International Trade in Goods and Services, Australia (cat. no. 5368.0).

The proposed statistical codes for the 2017 Customs Tariff update will be available for comment (in a similar process to the AHECC) later this year.


DUE DATE FOR FEEDBACK

The ABS requests all feedback be provided by Friday 19 August 2016. Written submissions should be forwarded to:
international.trade@abs.gov.au

or mailed to:
Classification and Confidentiality Manager
International Trade in Goods and Services Section
Australian Bureau of Statistics, Locked Bag 10
Belconnen ACT 2616

Further information or queries regarding this paper should be directed to the Classification and Confidentiality manager, International Trade in Goods and Services section on (02) 6252 5409 or via email international.trade@abs.gov.au.

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