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HS Classifications for HS Classifications for Remanufactured GoodsRemanufactured Goods

MasakiMasaki OkamotoOkamotoCustoms and Tariff BureauCustoms and Tariff BureauMinistry of Finance, JapanMinistry of Finance, Japan

Kuala Lumpur, October 22, 2012Kuala Lumpur, October 22, 2012

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1. 1 HS Classifications1. 1 HS Classifications

““HS (Harmonized System) classificationsHS (Harmonized System) classifications”” is is

to classify trading goods in an to classify trading goods in an internationalized nomenclature;internationalized nomenclature;

stipulated instipulated in

““International Convention on the International Convention on the harmonized Commodity Description and harmonized Commodity Description and Coding System (HS Convention)Coding System (HS Convention)””; and; and

drafted by the World Customs drafted by the World Customs Organization (WCO).Organization (WCO).

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““NotesNotes”” are prepared in almost all the are prepared in almost all the Sections and Chapters in order to enhance Sections and Chapters in order to enhance interpretation of classifying goods.interpretation of classifying goods.

Section > Chapter > Heading > Sub-headingSection > Chapter > Heading > Sub-heading (Broad) (Detailed)(Broad) (Detailed)

Section XVI: Machinery and mechanical appliances Chapter 84: … machinery and mechanical appliances; … Note: this chapter does not cover: … (e) vacuum cleaners of heading 85.08; … Chapter 85: Electrical machinery and equipment … Heading 85.08: Vacuum cleaner Sub-heading 8508.11: of a power not exceeding 1,500 W and having a dust bag or other receptacle … Sub-heading 8508.19: Other:

1. 2 HS Classifications1. 2 HS Classifications Coding StructuresCoding Structures

e.g.) Vacuum Cleaner

2,000W

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The systematic and uniform The systematic and uniform classifications of all goods among classifications of all goods among the international trade.the international trade.

Hierarchical classification system;Hierarchical classification system;

• Classifications of goods are done with a step Classifications of goods are done with a step by step methodology; andby step methodology; and

• The step are done based on the Rules for The step are done based on the Rules for the Interpretation of the Customs Tariff the Interpretation of the Customs Tariff Schedule (General Rules)Schedule (General Rules)

1. 3 HS Classifications1. 3 HS Classifications

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Necessity of applying HS classificationsNecessity of applying HS classifications

To differentiate the tariff rate according to the To differentiate the tariff rate according to the nature or characteristics of the trading goods.nature or characteristics of the trading goods.

Universal language of the international tradeUniversal language of the international trade

Contracting parties 145 (as of October 2012) Contracting parties 145 (as of October 2012)

HS classifications are applied in more than 200 HS classifications are applied in more than 200 countries/regions. countries/regions.

HS classification are applied to more than 98% of HS classification are applied to more than 98% of world trade according to the WCO.world trade according to the WCO.

1. 4 HS Classifications1. 4 HS Classifications

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Goods classified by characteristicsGoods classified by characteristics

Heading 87.02Heading 87.02 Heading 87.03Heading 87.03

Motor vehiclesMotor vehicles for the for the transport of transport of ten or ten or more personsmore persons, , including the driverincluding the driver

Motor carsMotor cars and other and other motor vehicles principally motor vehicles principally designed for the designed for the transport of persons transport of persons ((other than those of other than those of heading 87.02heading 87.02), ), ……

2. 1 HS Classifications of 2. 1 HS Classifications of goods by Characteristicsgoods by Characteristics

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Heading 87.05Heading 87.05 Heading 87.09Heading 87.09Special purpose motor Special purpose motor vehicles, vehicles, other than those other than those principally designed for the principally designed for the transport of persons or goodstransport of persons or goods (for example,(for example,……concrete-mixer concrete-mixer lorrieslorries……))

Works trucks, Works trucks, self-propelled, self-propelled, not fitted with lifting or not fitted with lifting or handling equipment, of the handling equipment, of the type type used in factories, used in factories, warehouses, dock areas or warehouses, dock areas or airports for short distance airports for short distance transport of goodstransport of goods……..

2. 2 HS Classifications of 2. 2 HS Classifications of goods by Purposesgoods by Purposes

Goods classified by purposesGoods classified by purposes

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Knowledge to apply an accurate classification Knowledge to apply an accurate classification to a trading good is necessary and important to a trading good is necessary and important for all the stakeholders.for all the stakeholders.

In case HS classification changes, different In case HS classification changes, different tariff rate may be applied on the good.tariff rate may be applied on the good.

Understanding of HS classification are required for Understanding of HS classification are required for exporters and importers to make the right decision exporters and importers to make the right decision of HS classifications.of HS classifications.

It also affects cost consideration of manufacturers. It also affects cost consideration of manufacturers.

2. 3 HS Classifications:2. 3 HS Classifications:Easy or Difficult?Easy or Difficult?

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??purposes

3. Classification of3. Classification ofRemanufactured GoodsRemanufactured Goods

Characteristics

Used Cars

“as good as new”

“to develop progress to return

core to new condition”

“same-as-new”

“end-of-life products (or cores) to their

original performance specifications, with renewed lifetimes”

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Thank youThank you……