COMMODITY CLASSIFICATION SYSTEM • Countries that have adopted the

(PRELIMS TO FINALS REVIEWER) HS are not permitted to alter in

any way the descriptions
PRELIM TOPICS: associated to a heading or a
subheading nor can the
Harmonized Commodity Description numerical codes at the four or six-
digit levels be altered, this is what
and Coding System:
keeps the HS harmonized.
• In international trade each
Harmonized Commodity Description
product is assigned a particular
and Coding System: (USES)
classification code using the
Harmonized Commodity
Description and Coding System • Determination of Customs Tariff
or Simply Harmonized Systems (import duty)
(HS). • Collection of International trade
statistics
• The Harmonized Commodity • Rule of Origin
Description and Coding System or • Ascertain the eligibility of a product
Simply Harmonized Systems (HS) is under a free trade Agreement
a multipurpose international • Compliance with customs
product nomenclature developed requirements
by the World Customs Organization
(WCO). 1931
• The “Geneva Nomenclature” was
• It was developed and presently developed. It was prepared by a
maintained by the WCO (formerly committee of experts under the
known as the Customs auspices of the League of nations.
Cooperation Council (CCC)
headquartered in Brussels, 1959
Belgium. • The “Brussels Tariff Nomenclature”
came into force. It was created by
• It was established in 1983 and the European Customs Union Study
entered into force in 1988. under Group using the Geneva
this convention, contracting parties Nomenclature as base.
are obligated to base their tariff
schedules on the HS nomenclature,
although parties set their own rates
of duty.
1974
• The “Customs Cooperation Council
Nomenclature” was the new name
given to the BTN to avoid any
confusion as to the international
organization responsible for its
development.
1988
• The “Harmonized Commodity
Description and Coding System”
entered into force.
The ASEAN Harmonized Tariff
Nomenclature (AHTN):
• The Association of Southeast Asian
Nations (ASEAN) comprising
Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand,
and Vietnam. agreed to adopt a
common tariff nomenclature to
facilitate the flow of trade within
the region.
• The AHTN is the Harmonization of
each ASEAN member country’s
customs nomenclature.
• The AHTN is based on the
Harmonized System up to the 6-
digit subheadings. it is
supplemented with the national
requirements of each of the 10
ASEAN member countries in the
form of 8-digit subheadings.
• The Philippines began
implementing the harmonized
tariff coding system back in 1989
the 104th country to do so.
• Any amendments on the
Harmonized System would also be
reflected on the AHTN.
• The first AHTN code was adopted
in 2004, incorporating products
that are significantly traded by the
AMSs, the AHTN is used as:
The ASEAN Harmonized Tariff
Nomenclature (AHTN): (USES)
• A uniform tariff nomenclature
within ASEAN
• Basis for preferential tariff
purposes in the ASEAN free trade
area (AFTA) and other free trade
areas: and
• Basis for the collection of trade
statistics.
INSTITUTIONAL ARRANGEMENT OF
THE AHTN PROTOCOL:
The ASEAN Directors-General of
Customs:
• Responsible for monitoring,
reviewing, and supervising, all
aspects relating to the
implementation of the
implementation of the AHTN
protocol.
The ASEAN Finance Monitoring
Meeting:
• Is the forum for all decisions
relating to the
implementation of the
AHTN Protocol.
The ASEAN Secretariat:
• Provides the necessary support for
supervising, coordinating, and
reviewing the implementation of
the AHTN Protocol and assists the
ASEAN Directors-General of
Customs on matters relating
thereto, responsible for assisting
the experts’ panel in monitoring
and reviewing the AHTN.
MIDTERM TOPICS:
CLASSIFICATION TECHNIQUES:
1. WHAT IS IT?
• Get to know the type of product you
are classifying.
2. WHAT ARE ITS CHARACTERISTICS?
• Determine specifics about the
product, such as its materials or
chemical compositions, weight,
dimension or measurement, and its
rating
3. WHAT ARE ITS FUNCTIONS OR
INTENDED APPLICATION?
• Ascertain the subject’s article’s end
use or purposes.
* In the case of appliances:
- For domestic or commercial
applications?
* In the case of agricultural products:
- Is it fit for human consumption?
* In the case of vehicles:
- Is it for the transport of persons or
goods?
4. WHAT CONDITION IS IT IMPORTED?
• Establish the state of the subject
article as imported or presented at
Customs.
* In the case of agricultural goods:
- Is it fresh, chilled, frozen, or dried?
* In the case of furniture, appliances or
vehicles:
- Is it complete, unassembled, or
completely knocked down?
* In the case of metal long products:
- Is it in coils?
HOWEVER, THE REQUIRED DETAILS
FOR CLASSIFICATION VARY
DEPENDING ON THE TYPE OF THE
SUBJECT ARTICLE.
LEGAL NOTES: SECTIONS:
• Section, Chapter, and Subheading • Are designated by Roman numerals
Notes (along with the coding and in ascending manner from “I’ to
description of the Headings and “XXI”
subheadings comprised the legal
texts used in the classification of CHAPTERS:
goods).
• Indicated by the first two digits of
the Product Code.
THE LEGAL NOTES CAN BE

CLARIFICATION: • Are assigned numbers in ascending

• These notes provide clarification as manner starting from 1 up to 97”
to the classification of certain goods
and direct the classifier to the HEADING:
correct Heading or Subheading • Indicated by the first four digits of
classification. the product code.
INCLUSION/COVERAGE:
• These notes enumerate the goods SUBHEADING:
that are included within the • HS Subheadings are the first six
coverage of a particular section, digits of the product code. The same
chapter, heading or subheading. for all members of WCO.
EXCLUSION:
• These notes enumerate the goods • AHTN Subheadings are the whole
that are excluded from a particular eight digits of the product code,
Section or Chapter. parallel to all ASEAN Members.
DEFINITION:
• These notes provide a detailed CHAPTER NOTES:
description of a particular product • Exemption
covered by the Section, Chapter,
Heading or Subheading. SECTION NOTES:
• All products belong.
THESE NOTES ARE PROVIDED TO
CLARIFY THE CLASSIFICATION OF
CERTAIN GOODS THAT ARE
OTHERWISE AMBIGUOUS AND THAT
CAN NOT BE PROVIDED IN
UNABRIDGED FORM DUE TO THE
VASTNESS OF TRADABLE GOODS
 AHTN PUNCTUATION MARK
COMMA: (,)
• Used to separate items or lists of
goods described in the heading and
subheading texts.
• Used to separate the list of items
from the descriptor phrase or from a
series of descriptors to which the
items belong
SEMI COLON: (;)
• It is used to indicate a full-stop and
that a good or list of goods
separated by semi-colons must be
treated as distinct and separate
from each other when considering
tariff classification at the heading or
subheading level.
COLON (:)
• It is used to indicate that further
subdivisions will occur.
• The colons appear after the end of
every subheading text which has
further breakdowns.
PERIOD (.)
• It is used to indicate a full stop in the
heading text which means only
those products mentioned are
included and nothing more.
THE DASH SYSTEM
• In the Harmonized System (HS),
when a Heading is divided into two
or more 6-digit subheadings, a single
dash appears before the description
of products to indicate the first level
of divisions.
• When necessary, subheadings are
broken down into two or more 2-
dash subheadings to indicate the
second level of subdivisions.
• Dashes are laid down in an
increasing manner.
• A one-dash is followed by two
dashes, two dashes by three dashes,
three dashes by four dashes, and so
on.
PRINCIPLES
1. Only compare one-dash
subheadings that are under the
same heading.
2. Choose the one-dash subheading
that fits the description of the goods
being classified;
3. If the established one-dash
subheading is further divided,
compare all two-dash subheadings
that are under that one-dash
subheading and choose the two-
dash subheading that fits the
description of the goods being
classified; and, if applicable.
4. Compare all three-dash subheadings
under the established two dashed
and determine the correct three-
dash subheading classification, and
so on.
DESCRIBING OTHERS
• “Other” is the most recurring
description found in almost all HS
headings.
• “Other”, provides for a more
general, widely scoped, and
sometimes vague coverage.
• When headings are further divided
into subheadings, two major groups
are generally created:
1. Subheading/s with a specific
description
2. Subheading/s with the
description “Other”
• Describing the coverage of “Other”
is just like answering a puzzle since it
is sometimes difficult and tricky.
• Extra care should be taken into
consideration in describing the
coverage of “Other” especially when
there are too many subheadings
involved.
STEPS IN DESCRIBING OTHERS
1. Read the terms of the heading, i.e.,
the articles mentioned under the 4-
digit heading.
2. Take note of the dash level of
subheadings.
3. “Other” covers articles not provided
by subheadings under the same
dash level taking into consideration
the description of the preceding
subheading with a lower dash count.
FINAL TOPICS:
GENERAL INTERPRETATIVE RULES (GIR)
• Is a set of 6 rules for the
classification of goods. The rules are
provided to ensure uniform legal
interpretation of the Harmonized
System Nomenclature for the
proper classification of goods. These
rules have to be applied in
sequential order.
There are SIX GENERAL RULES:
• The first five (5) Rules relating to
classification in the 4-digit
headings.
• Rule 6 relates to classification at the
subheading level.
• The Rules set out the principles for
classification in the HS
nomenclature.
• They are an integral part of the
Nomenclature, providing uniform
application and interpretation.
• The GIRs are incorporated in the
CMTA, RA 10863: Section 1610.
SEC. 1610. General Rules for the
Interpretation (GIR):
• The classification of goods and their
tariff nomenclature as provided
pursuant to this Act shall be
governed by the following
principles:
RULE 1 (TERMS OF THE HEADING)
• The titles of sections, chapters, and
subchapters are provided for easy
reference only.
• For legal purposes, classification
shall be determined according to the
terms of the headings and any
relative section or chapter notes
• And, provided such headings or
notes do not otherwise require,
according to the following
provisions.
Specific Description:
(e.g. Heading 08.06)
Broad Description:
(e.g. Heading 39.26)
Virtue of GIR 1?
• Know your product.
• Examine the conditions of the
heading description.
• Do not forget to read the chapter
notes, section notes legal notes.
RULE 2A (UNASSEMBLED OR
DISASSEMBLED, INCOMPLETE,
UNFINISHED GOODS)
• Any reference in a heading to the
goods shall be taken to include a
reference to the same in their
incomplete or unfinished form or
state:
• Provided, That the incomplete or
unfinished goods have the essential
character, as presented, of the
complete or finished goods.
• It shall also be taken to include a
reference to the same, in their
complete or finished form or state
• (or falling to be classified as
complete or finished by virtue of
this Rule), presented unassembled
or disassembled.
• extend the scope of the heading
• Have essential character
RULE 2B (HEADINGS, MIXTURES, AND
COMBINATION OF GOODS)
• Any reference in a heading to a
material or substance shall be taken
to include a reference to mixtures or
combinations of that material or
substance with other materials or
substances.
• Any reference to goods of a given
material or substance shall be taken
to include a reference to goods
consisting wholly or partly of such
material or substance.
• The classification of goods
consisting of more than one
material or substance shall be
according to the principles of Rule 3.
Example: Milk contains added vitamins
or minerals added substance and the
essential character is milk parin.
RULE 3A
(MOST SPECIFIC DESCRIPTION)
• The heading which provides the
most specific description shall be
preferred to headings providing a
more general description.
• However, when two (2) or more
headings each refer to part only of
the materials or substances
contained in mixed or composite
goods or to part only of the items in
a set put up for retail sale, those
headings are to be regarded as
equally specific in relation to those
goods, even if one of them gives a
more complete or precise
description of the goods.
• Provides the most specific
description
• Example: 94.01 (Seats) over 87.08
(Parts and accessories of the motor
vehicles of headings 87.01 to 87.05
RULE 3B (ESSENTIAL CHARACTER)
• Mixtures, composite goods
consisting of different materials or
made up of different components,
and goods put up in sets for retail
sale, which cannot be classified by
reference to 3(a), shall be classified
as if they consisted of their
essential character, insofar as this
criterion is applicable.
• Is a mixture of substances with the
essential character of the product
Example:
• Liquor gift sets – Liquor is the
essential character
1. Glass
2. Bottle opener
3. Shirt
• Mango with graham – graham
padin ang essential character
RULE 3C LAST IN NUMERICAL ORDER
• When goods cannot be classified by
reference to 3(a) or 3(b), they shall
be classified under the heading
which occurs last in numerical order
among those which equally merit
consideration;
• Kung saan yung pinaka last at
mataas doon mo siya i-HS
• Pag di pumasok sa 3a and 3b
Socks and Ties
RULE 4 (MOST AKIN)
• Goods that cannot be classified in
accordance with the above Rules
shall be classified under the heading
appropriate to the goods to which
they are most akin.
• Di siya masyadong gamit
• Last resort – ginagamit lang pag no
choice na
• New products
• Most similar
• Example: Plastic Diffuser, E-bike
RULE 5A (SPECIAL CONTAINERS)
• “NON-REPEATEDLY USE”
• Camera cases, musical instrument
cases, gun cases, drawing
instrument cases, necklace cases,
and similar containers, specially
shaped or fitted to contain specific
goods or sets of goods, suitable for
long-term use and presented with
the goods for which they are
intended, shall be classified with
such goods when of a kind normally
sold therewith.
• The Rule does not, however, apply
to containers which give the whole
its essential character; and
RULE 6 (CLASSIFICATION OF GOODS
AND SUBHEADING LEVEL)
• For legal purposes, the classification
of goods in the subheadings of a
heading shall be determined
according to the terms of those
subheadings and any related
subheading notes and, mutatis
mutandis, to the above Rules, on the
understanding that only
subheadings at the same level are
comparable.
• For the purposes of the Rule, the
relative section and Chapter Notes
also apply, unless the context
otherwise requires.
• Mga Others

RULE 5B (PACKING MATERIALS)

• “REPEATEDLY USE”
• Subject to the provisions of Rule
5(a), packing materials and packing
containers presented with the
goods therein shall be classified
with the goods if they are of a kind
normally used for packing such
goods.
• However, this provision does not
apply when such packing materials
or packing containers are clearly
suitable for repetitive use.