The World Customs Organisation’s (WCO) Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) is the international guideline that identifies and compiles details of commodities imported and exported in an internationally consistent way for customs, statistical and analytical purposes and trade negotiations. It is updated every five years. WCO members as well as non-members generally nationalise the classification to be able to accommodate the national tariff rates, upon which the classification becomes a legal document.
The latest HS version is for 2017 (HS17) which came into effect on 01 January 2017. In the Pacific only three Pacific Island Nations, namely Fiji, Vanuatu and Papua New Guinea were able to implement HS17 on time. Most were unable to implement HS17 on the stipulated date because most of the Customs administrations lacked the necessary tools to enable them to nationalise their classification and some also lacked the necessary technical skills to undertake the work.
It was for these reasons that the Pacific Community (SPC) which provides technical assistance to the Pacific Island nations in the compilation of the International Merchandise Trade Statistics (IMTS) pushed for a Pacific regional HS17 (PACHS17). It is recognised that Customs administrations are the best and the preferred source of data for the compilation of the IMTS and it was in the region’s interest to ensure that data was made fit-for-use at the source. SPC, in collaboration with OCO, therefore derived and developed the PACHS17 from the WCO HS17. The publication was launched in Melbourne in June 2018. As of now through assistance provided by the OCO, 10 more countries have adopted the PACHS17.
On 01 January 2022 all WCO members are expected to begin using HS22. Led by the OCO and supported by the SPC, the Pacific Islands Forum Secretariat (PIFS) and the United Nations Environment Programme, the Pacific Island Nations attended the PACHS review meeting organised by the OCO in Nadi Fiji from 16 to 17 September 2019. The meeting was of importance to SPC in that it has passed on the lead agency role for the regionalisation of the HS to OCO, in favour of SPC playing a supporting role in the future. This swapping of roles was deemed necessary since the HS, being a Customs nomenclature, OCO is the most appropriate organisation to lead the project, and now has the necessary resources and skills to undertake this leading role.
The meeting also received a presentation by the SPC highlighting trade in the Pacific with a focus on the principal commodities exported by the Pacific Island Nations, their major trading partners, the mode of transport used in trade and the trade to GDP ratios amongst others. The purpose of SPC’s presentation was to highlight to Customs officials that in addition to the important role Customs administrations play in collecting revenue for their respective governments, border control and facilitating trade, the data being captured generates IMTS which are used by the governments for socio-economic policy and planning; those policies that impact peoples’ lives.
The two-day meeting allowed participants to discuss and finalize the HS 2022 Implementation Action Plan after taking into consideration -
- The main challenges experienced and lessons learned in the implementation of PACHS17 and its application at the national level.
- Proposals for inclusion in the PACHS22:
- Update on WCO HS Classification
- Proposal by the United Nations Environment Programme
- Classification of new and emerging tobacco products
- Classification of energy products
- Addition of new regional goods
- Deletion of regional goods no longer traded
- Regional approach to implementation and capacity building needed to prepare countries to adopt HS22.