A Primer on the ASEAN Harmonized Tariff Nomenclature (AHTN)

1. What is the ASEAN Harmonised Tariff Nomenclature (AHTN)?

The AHTN is an 8-digit commodity nomenclature agreed to be adopted in principle by the ten (10) ASEAN member countries on 01 January 2002. It is based on the Harmonized System (HS) and involves the alignment of the national tariff nomenclature of each member country with the AHTN.

2. What is the structure of the AHTN? The AHTN is comprised of the (1) General Rules for the interpretation of the System, (2) Section and Chapter Notes, including Subheading Notes, and (3) a list of headings arranged in systematic order and, where appropriate, subdivided into subheadings.

Adhering to the 6-digit level of the HS, the seventh and eighth digit codes are assigned to ASEAN subheadings that comprise about 10,800 tariff lines. These would cover the requirements of the ten ASEAN Member States.
. However, national classifications of Member States that were not included in the AHTN shall be dealt with beyond the 8-digit code. Furthermore, the AHTN already incorporates the HS 2002 amendments

3. What are the uses of the AHTN? a. As a uniform tariff nomenclature within ASEAN b. As a base for preferential tariff purposes in AFTA

4. What are the advantages of the AHTN? a. It establishes uniformity of application in the classification of goods in ASEAN b. It enhances transparency in the classification process for goods in the region c. It simplifies the tariff nomenclature system of ASEAN Member States to facilitate trade in the region

5. When will the government implement the AHTN and what is the legal basis? The Tariff Commission is mandated by Executive Order No. 688 dated 01 May 1981 to align the Philippine Tariff Nomenclature with all future amendments to the Customs Cooperation Council Nomenclature. Subsequently, a NEDA Board Resolution and/or an Executive Order will be issued upon the completion of the required procedures to adopt the AHTN. Further, the Philippines is bound by Article 4 of the ASEAN Agreement on Customs dated 01 March 1997 and the AHTN protocol to be signed by the Member States within 2002. The Philippines is scheduled to implement the adoption of the AHTN by 01 January 2003.

6. What is the AHTN Protocol? The AHTN Protocol defines the legal framework governing the implementation of the AHTN, and its implementing rules and explanatory notes. The AHTN Protocol will be signed by the Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, Lao People' Democratic Republic, Malaysia, Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Vietnam.

7. What are the obligations of Member States? Each Member State shall abide by the HS Code and shall apply the AHTN, up to the 8-digit level for all trade transactions for tariff, the collection of statistical data and other purposes. Amendments to the AHTN shall only be made in accordance with Article 5 (Amendments of the AHTN) and Article 6 (Amendment Procedures) of the Protocol.

8. What are the reasons for amending the AHTN? In what instances may the AHTN be amended?
Amendments to the AHTN maybe effected for the following reasons or instances: a. when there is an amendment to the HS Code and/or description b. when there is amendment to the ASEAN subheadings in the AHTN for the purposes of simplification c. when there is amendment arising from the requirements of Member States, changes in technology, etc.

9. How do countries provide for national subdivisions? a. Beyond the 8-digit AHTN level, each Member State could create new national subheadings or through domestic procedures. In the interim, the Philippines shall be assigning alpha-numeric codes to denote new subheadings, e.g.:
Rate of Duty (%) Heading Tariff Code Description 2002 Natural magnesium carbonate (magnesite); fused magnesia; deadburned (sintered) magnesia whether or not containing small quantities of other oxides added before sintering; other magnesium oxide, whether or not pure - Natural magnesium carbonate (magnesite) - Others: A. Fused Magnesia B. Dead-burned (sintered) C. Other 1 1 3 1 1 3 1 1 3 2003 2004

25.19

2519.10 00

2519.90 00

b. To incorporate newly created national subheadings in the AHTN, proposals for amendments shall be made by Member States to the ASEAN Directors-General (ADG) of Customs through the ASEAN Secretariat. c. The ADG of Customs shall be the forum to allow amendments to the AHTN. The ADG of Customs may convene an experts panel consisting of representatives from all the Member States. The Decisions of the ADG of Customs shall be made by consensus. 10. What are the Institutional Arrangements overseeing the AHTN Protocol? a. The ASEAN Directors-General (ADG) of Customs shall be responsible for monitoring, reviewing, supervising all aspects relating to the implementation of the AHTN Protocol. b. The ASEAN Finance Ministers Meeting shall be the forum for all decisions relating to the implementation of the AHTN Protocol. c. The ASEAN Secretariat shall provide the necessary support for supervising, coordinating and reviewing the implementation of the AHTN Protocol and shall assist the ADG of Customs on matters relating thereto. The ASEAN Secretariat shall have the responsibility of assisting the experts panel, and assisting Member states in monitoring and reviewing the AHTN. 11. What were the criteria used for classification in the AHTN? a. Classifications should not be provided where the tariff rates for groups of ASEAN subheadings are equal in the respective Member States b. Classifications should be provided where the significance in trade for a subheading for a Member State is high c. Classifications should reflect a single, unique code for a defined commodity to avoid ambiguous criteria for Classification d. Classifications can be based on the criteria which has been utilized by a majority of Member States e. Classifications for national statistical and other non-tariff-purposes may be dealt with at the national level, at the 8-digit level and beyond f. Classifications should take into account international conventions g. Classifications based on seasonal tariff rates should be dealt with through domestic procedures of the affected Member State h. Classifications, other than the above, for tariff purposes, and which is country-specific should be dealt with in accordance with the procedures in Article 5 and 6 of the Protocol. In this case, efforts should be made to establish common regional criteria for affected subheadings to avoid proliferation of tariff lines i. Classifications can be created for the purposes of tariff reduction and these may be reflected as an extraction of the AHTN subheading as a transitional measure. 12. What other publications to complement the AHTN? a. Supplementary Explanatory Notes (SEN) a compilation of the official interpretation of the ASEAN subheadings. b. Alphabetical Index an alphabetical electronic list of the articles mentioned in the AHTN and the SEN. It facilitates the location of references in the AHTN or the SEN to any of the products or articles mentioned therein. c. Correlation Table an essential guide for the transposition of the HS2002 6-digit HS-based Code to the 8-digit AHTN