Recent updates to the U.S. Harmonized Tariff Schedule (HTS) result in new HTS classifications for pharmaceutical products. The 2017 updates to the HTS, which went into effect on January 1, 2017, revamped several chapters and headings of the HS by deleting, adding or modifying hundreds of HTS codes[i].
Significant changes were made to chapter 30 of the HTS which covers Pharmaceutical Products. In particular, headings 3002, 3003 and 3004 (human blood and medicines) were restructured after several codes were deleted and replaced with new consolidated subheadings[ii]. It’s important to note that the modifications to chapter 30 do not include duty rate changes: most pharmaceutical products are still duty free in the US.
The US is not alone in updating its tariff schedule. In fact, a new, updated version of the Harmonized System (HS) also entered into force on January 1, 2017. According to the World Customs Organization, the 2017 edition of the HS includes 233 sets of amendments: 85 relating to the agricultural sector; 45 to the chemical sector; 13 to the wood sector; 15 to the textile sector; 25 to the machinery sector; 18 to the transport sector; and an additional 32 that apply to a variety of other sectors[iii].
The HS is used by countries as a basis for their national Customs tariffs and the collection duty generated revenue and trade statistics. The nomenclature of the U.S HTS, for example, is based on the Harmonized System. Importers and exporters are legally responsible for reporting the correct HS classification to Customs for the products they move across borders.
Given the broad changes to the US HTS and Global HS, importers and exporters must review their product lines and shipping documents to ensure their product are correctly classified and Customs import procedures can take place without delay.