REPORT OF THE
CUSTOMS 2020
“TARIFF CLASSIFICATION SEMINAR”
BRUSSELS 28 – 30 MARCH 2017
1. Introduction
1.1. Background
1.2. Objectives
2. The Seminar
2.1. Welcoming addresses
2.2. The sessions:
2.2.1. Session 1
2.2.2. Session 2
2.2.3. Session 3
2.2.4. Session 4
2.3. Closing speeches
3. Conclusions
4. Annexes
4.1. Agenda
4.2. List of participants
4.3. Notes of session 1
4.4. Notes of session 3
THE EU STEPS UP CAPACITY BUILDING IN TARIFF CLASSIFICATION
TABLE OF CONTENTS
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1. INTRODUCTION
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1.1. Background
The Seminar is an activity in the framework of the project “Future of BTI” for the benefit of people in
charge of managing and following up BTI decisions and involved in classification issues in the broader
sense.
“Future of BTI” is the future policy with regard to ensuring uniform tariff classification and binding tariff
information (BTI) procedure in the EU. One of the objectives is to assist the Member States (MS) in
knowledge sharing. Although from time to time there have been ad-hoc seminars devoted to the
application of the Common Customs Tariff (and certain MS may have national practices), in principle
there is no regular practice of sharing expertise (apart from the Customs Code Committee (CCC) and
related activities – workshops and Project Groups). With the initiative for organising classification
seminars, expertise will be shared broadly. Although this will require certain effort (such as the one from
the seminar hosting country), it is believed that the positive outcome will pay back to all 28 MS.
1.2.
Objectives
During this event, the principles and methodology of classification, as well as latest evolutions in certain
technological areas were addressed, together with developments under consideration in the
Harmonized System and the European CLASS system. The seminar discussed various lines of
approach identified by the Member States which might improve overall BTI processes throughout the
EU.
It also provided a platform for exchanging ideas between the Member States.
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2. THE SEMINAR
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2.1. Welcoming addresses
The seminar was opened by Mr Kristian Vanderwaeren, Administrator General of Belgium Customs
and Excise, who emphasised the importance of correct tariff classification. He noted that classification
of new commodities, in particular, in the high technology area, was a challenge to traders and customs,
and he invited the WCO to play an active role in updating the HS Nomenclature.
The Belgian Minister of Finance, Mr Johan Van Overtveldt, in his address at the Seminar, mentioned
how customs had developed from a revenue collection authority to an important institution to safeguard
society and fight against organized crime and terrorism. In that respect, tariff classification was seen as
an important means to target illicit products. However, customs were also expected to contribute to the
economy by striking a balance between enforcement and trade facilitation. Finally, he invited the EU
and the WCO to work together to ensure timely updating of the HS.
Mr Stephen Quest, Director-General of DG TAXUD in the European Commission, noted that the EU
had just celebrated the 60th anniversary of the Treaties of Rome, which paved the way for a Union. In
2018, it could celebrate the creation of the Customs Union and he stressed that for almost 50 years the
backbone of the Customs Union had been the EU’s Common Customs Tariff. This seminar was the first
of a series that should lead to uniform classification within the EU, thus ensuring correct revenue
collection and equal treatment of economic operators. In his speech, Stephen Quest made an overview
of actions taken by DG TAXUD to give Member States the necessary tools and methods to tackle the
challenges of uniform tariff classification. It was reminded that a smoothly working internal market and
Customs Union is a public interest and, different stakeholders in their different roles can make the
system work better by ensuring that rules and tools work as effectively as possible. The focus was
made on closer cooperation among national authorities and between national authorities and the
European Commission as the best way to give positive and tangible answers to the concerns faced by
Member States.
The Director of WCO’s Tariff and Trade Affairs Directorate, Mr Ping Liu, in his opening address,
stressed the importance of correct and uniform classification and of the need to strike a balance
between addressing security/social concerns and traditional revenue collection concerns by customs.
He pointed out that the implementation of the WTO Trade Facilitation Agreement would place an
obligation on WTO Members to issue advance rulings for classification and origin of goods. It
encourages advance rulings for customs valuation as well. In this respect, he appreciated the EU
system on advance rulings which had been used as a “best practice” in the WCO’s Technical
Guidelines on Advance Rulings. He shared his concern about the apparent lack of capacity building in
the traditional areas of customs work; tariff classification, origin and customs valuation, and his hope
that the EU will continue to lend its support to other Members of the WCO.
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2.2 The sessions
2.2.1. Session 1: Enhancing Administrative Guidelines – Identifying the gaps and facilitating
input for the new version
Intro and agenda
During the first session, the seminar was switched into a participatory mode. Three consultants guided
the participants through by using a highly interactive method.
This session consisted of two parts. The first part was to discover and discuss what is working well and
what needs to be improved. The participants were divided into smaller groups to discuss problems and
possible solutions regarding the administrative guidelines. Then, the consultants grouped up the main
recurring topics, giving each table one topic.
In the second phase, everyone could choose the problem they wanted to work on. The consultants
monitored the groups and ensured all topics would be discussed. The goal was to brainstorm, come up
with ideas and proposals.
Expected outcome
The expected outcome of this session was to identify actions that could be implemented in the short
and medium term to improve the administrative guidelines. These actions would result in a new version
of the guidelines, which would improve the performance of MS in the BTI processes. The changes
should, in particular, address gaps in the guidelines and their readability.
Summary
The delegates indicated their concerns regarding the guidelines. They had an opportunity to be
involved in discussions where they could contribute with their expertise. The discussion included
positive and negative experience with the interpretation and use of the existing guidelines.
During the discussion, gaps in ten areas which need to be examined and improved in the revised
version of the Administrative Guidelines were identified. Member States presented concrete proposals
on each topic to all the groups. In some cases, immediate feedback was given by the Commission. The
below ten topics were discussed in detail. The complete summary sheets including proposals and
possible way forwards can be found in Annex 4.4.
 Application process and status codes
Member States support the idea of status codes as they need to be informed about the workflow of an
application.
There is not enough information on the conditions for the acceptance of an application in DA Article 11;
however, there are more criteria in the application form itself.
 BTI-shopping
There are cases where traders apply for BTIs for identical or similar goods (usually) to several Member
States in order to receive a BTI decision with the most favourable duty rate. This illegal practice is
called BTI shopping.
The main concern of the Member States is: What to do when the administration realises that it has not
prevented BTI shopping?
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 Cases closed in Customs Code Committee
Dissemination of the conclusions of the Customs Code Committee is of utmost importance and should
be done in a uniform manner. The cases closed in the minutes of the CCC need to be properly archived
to allow their consultation at a later stage. Member States translate the reports on the closed cases and
include them in their national instructions.
The main problem encountered is absence of a clear guidance on steps following the closure of a case,
as well as how to make sure that concerned BTIs are revoked. Given that Committee conclusions do
not have any legal value, follow-up practices in different Member States can vary.
 Consultation of the EBTI-3 database
The main purpose is to identify valid BTIs issued for identical or similar products and avoid BTI
shopping.
 Period of extended use
Even though requests for a period of extended use do not occur often, Member States need guidance
for such instances.
 Identical and similar products
Whereas the term 'identical products' is clear, this is not the case for the term 'similar products'. The
Commission's statement "Each case should be assessed on a case by case basis" does not provide
enough information; therefore, more guidance is needed to make a clear distinction between 'identical'
and 'similar' products.
 Representative
Any trader has the right to appoint a different party to represent him; however, there are certain criteria
that need to be met.
The main concerns of the Member States are:
•
What information should be included in the box "representative"?
•
What happens in a situation when a representative does not have an EORI number?
 Right to be heard (RtbH)
In the examination of the gaps in the guidelines most of the participants had concerns with the right to
be heard management process. The main question during the seminar was whether the RtbH should
be granted in case where no additional information is provided in the application phase and the
customs reject the application. The Member States requested the revised guidelines to include an
elaborated section on the RtbH which will address their concerns.
 Template for bilateral consultations
Member States agreed that the communication process will be more uniform and clear if there is a
template for bilateral consultations between Member States.
 Timelines
The management and communication of deadlines can become a challenge for administrations.
The main idea is to have a monitoring system before October 2019 in order to make it easier for
Member States' administrations to follow timelines and ensure that they are met.
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2.2.2 Session 2: Technological advances in electronics
Intro and agenda
Three presentations were given by speakers from the industry and academic world:
a) Mr Peter Verschave (Corporate director) from Agfa
b) Mr Bruno Devos (R&D director) from Barco
c) Mr Bart Onsia (Innovation Program manager) from IMEC
The last presentation was done by Mr Claes Hallberg from DG TRADE regarding the new Information
Technology Agreement (ITA II).
Expected outcome
It is essential for customs officials to have an insight into high-tech products. In order to give a correct
classification, they have to understand the technology behind it.
These products are just examples of how new technology will keep changing and challenging customs
officials to provide correct BTI’s.
Summary
• Mr Peter Verschave explained how they are using new technologies in the printing business. The
types of ink have evolved over the years enabling printing on different objects. But digital imaging
equipment and thermo-sensitive printing plates are also being continuously improved.
•
Mr Bruno Devos focused his presentation on Barco’s LED-products. He showed how this
technology is more and more frequently used to create new marketing concepts and digital
wallpapers.
•
Mr Bart Onsia gave an insight into the development and evolution of the electricity production
market. IMEC is focusing on renewable energy by creating and finding innovative ways to integrate
photovoltaic systems into society.
•
Mr Claes Hallberg presented an update regarding the new ITA and briefly showed the immense
impact it has on the global trade of electronic goods.
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2.2.3. Session 3: Looking forward to the HS Nomenclature 2022
Intro and agenda
Mr Jorn Hindsdal from the WCO made a presentation on the update of the Harmonized System (HS)
with focus on the expectations to the next edition, HS 2022. Taking into consideration the classification
challenges faced during their daily work, the participating tariff specialists were invited to consider and
propose relevant amendments to the HS Nomenclature.
Afterwards, four working groups addressed different topics relating to high-tech products in the HS.
Expected outcome
Problem areas in the HS 2017 are identified and recommendations for treating them in the framework
of the current HS Review cycle (HS 2022) are examined. The proposed amendments would result in a
more intelligible HS, and therefore, simplify classification of goods. The proposed amendments will be
situated in the area of high-tech products.
Summary
Items discussed in working group one:
-
UK proposal on amending heading 8442
DE proposal on note 2 to chapter 59
DE proposal on 3D printers
DE proposal on headings 8703 and 8704
DE proposal on chapter 64
Items discussed in working group two:
-
Classification of a 3D scanner
Classification of a mobile phone
Modernisation of the structure of Section XVI
Item discussed in working group three:
-
Smartphones
Parts and accessories
Items discussed in working group four:
-
Definition of parts and accessories in chapter 84 and 85
Definition of parts and accessories for the whole tariff
Note 2 to section XVI
The notes of the rapporteurs are included in Annex 4.5.
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2.2.4. Session 4: How to overcome challenges in classification knowledge management
Intro and agenda
The session started with two plenary speakers:
a) Ms Agnes Fekete (Team Leader) from DG TAXUD of the European Commission
b) Mr Kurt Samaey (Senior expert) from Belgian Customs and Excise Administration
It was followed by a second part in participatory mode which focused on the challenges in classification
knowledge management.
Expected outcome
MS can implement on short term the most viable classification tool and on medium term adapt their
tools to the upcoming CLASS system. This would shorten the time to issue a BTI and reduce the
number of divergent BTIs.
Summary
A representative from DG TAXUD, Ms Agnes Fekete, explained that classification information is
scattered in several places which causes additional burden to the customs officers' work. The
development of a Classification Information System (CLASS) will provide a platform where all the
classification information is gathered together. Furthermore, this information will be searchable (using
keywords, nomenclature code), from any date, in all the official languages. She complemented this
information with print screens from the CLASS program. Examples of benefits of the CLASS system
would be less classification divergences and prevention of using incorrect nomenclature codes resulting
in the inability to properly charge the customs duties.
Mr Kurt Samaey from Belgian Customs showcased the tool used by the Belgian administration with a
focus on the encountered challenges. The tool consists of several documents that are easily
searchable. Each document corresponds with a section of the Combined Nomenclature. Within each
document major sources for classification are integrated.
The two presentations were followed by the second part of the session – a discussion around the
following question: 'How can I improve the classification knowledge management of my
administration?'. The question triggered discussion on how the relevant classification information is
found and archived after closing the case in the Customs Code Committee. The delegates had an
opportunity to share best practises in the area of classification knowledge management and learn from
each other how to overcome existing or potential challenges.
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2.3 Closing speeches
Mr Antti Suortti, Head of Unit of the Combined Nomenclature, Tariff classification, TARIC and
integration of trade measures, DG TAXUD, closed the seminar by expressing his gratitude to the
Member States' delegates for their active participation and collaboration, especially with regard to the
complex process of classification. He emphasized the importance of this type of seminars as an
opportunity for the Member States to share their feedback which would contribute to positive changes
in the Customs Union. The proposals by the Member States will be examined carefully so that the
Administrative Guidelines are endorsed in a manner that would address all the Member States'
concerns. He thanked the Belgian administration for the excellent organisation of the seminar and
encouraged the other Member States to take the lead for organising seminars of this type in the coming
years. This would give again an opportunity for sharing the challenges that the customs administrations
are facing, as well as for gaining knowledge through exchange of ideas and practices.
The Head of Tariff of Belgian Customs and Excise Administration, Mr Bruno Leroy, mentioned the
spectacular professional evolution in customs during the past decades. However, there is one thing that
has remained unchanged throughout the years, and it is the need for goods identification and
codification, not only at an abstract conceptual level, but in every corner of our daily life as customs
organisation. Furthermore, he acknowledged the enthusiastic and creative manner in which the
participants responded to the participatory activities.
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3. CONCLUSIONS
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During the first session, ten proposals were put forward that could be implemented in the short or
medium term to improve the administrative guidelines. Some of the proposals were discussed during
the Customs Expert Group for the BTI sector on 7 June 2017, namely changes to the EBTI-3 system,
the right to be heard and cases closed in the Customs Code Committee. All the proposals put forward
by participants are being carefully examined and they will form a basis for the future improvement of the
Guidelines. With view of enabling close co-operation between national administrations and also
between national administrations and the European Commission, the national administrations are
invited to further contribute to the revision of the Guidelines. Having this in mind, the Commission is
currently considering a possibility to re-initiate the activities of a Project Group devoted to the revision of
the Guidelines still in 2017.
During the third session, areas to improve in the framework of the current HS Review cycle (HS2022)
were examined. They will be further examined by the Commission and whenever possible be brought
forward during a future meeting of the HS coordination sector.
The presentations during session two, three and four led to a better understanding of high-tech
products, the ITA II, CLASS and the Member States' classification information system.
Furthermore, the seminar offered an opportunity to improve communication between MS and enhance
collaboration between the Commission and the Member States. The participatory mode which was
highly interactive, in particular, contributed to the networking between the participants. It created
positive atmosphere where delegates were encouraged to brainstorm and provide constructive
feedback. Moreover, the interactive manner enforced the spirit of acting as one.
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4. ANNEXES
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