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The ASEAN Harmonized Tariff Nomenclature

The tariff nomenclature under Section 1611 of the Customs Modernization and Tariff Act (CMTA), which adopted the provisions of Section 104 of the Tariff and Customs Code of the Philippines (TCCP), as amended, is currently based on the 2012 version of the Association of Southeast Asian Nations (ASEAN) Harmonized Tariff Nomenclature (or AHTN).

The AHTN is an eight-digit commodity nomenclature adopted by the ASEAN Member States (AMSs), namely, Brunei Darussalam, Kingdom of Cambodia, Republic of Indonesia, Lao People’s Democratic Republic, Malaysia, Union of Myanmar, Republic of the Philippines, Republic of Singapore, Kingdom of Thailand, and Socialist Republic of Viet Nam, to harmonize their tariff nomenclatures at the eight-digit level. It adheres to the six-digit commodity classification code of the Harmonized Commodity Classification and Coding System, or Harmonized System (HS), of the World Customs Organization (WCO) but adds two digits that represent ASEAN subheadings. The AHTN is intended to facilitate trade among AMSs by helping reduce disputes and differences in the classification of products that are not clearly specified at the six-digit level of the HS.

The AHTN is comprised of the (1) General Rules for the Interpretation of the Harmonized System, (2) Section, Chapter and Subheading Notes, and (3) list of headings and subheadings with their corresponding rates of duty. The Protocol Governing the Implementation of the ASEAN Harmonized Tariff Nomenclature (AHTN Protocol), which took effect on 7 August 2003, requires AMSs to apply the AHTN up to the eight-digit level for all trade transactions for tariff, collection of statistical data and other purposes.1 However, AMSs are also allowed to create their own national subheadings beyond the eight-digit level and, as a body, amend the AHTN under the Protocol’s amendment procedures. To reflect its national requirements, e.g., quota allocations, the Philippines introduced alphabetical codes beyond the eight-digit AHTN.

In cases of disputes among the AMSs in the interpretation and application of the Protocol, the Protocol provides that such disputes be settled amicably among the AMSs concerned. If settlement cannot be reached, the case should be referred to the ASEAN Directors-General of Customs, the body charged with monitoring, reviewing and supervising the implementation of the AHTN Protocol. If there is still no settlement, the case should be endorsed to the ASEAN Finance Ministers Meeting.

The HS 2012, and AHTN 2012, entered into force on 01 January 2012. As a Contracting Party to the International HS Convention, the Philippines is required to implement HS amendments. Further, under the AHTN Protocol, AMSs are obliged to abide by the HS, including its legal texts and amendments.

Following approval by the National Economic and Development Authority (NEDA) Board on 18 September 2012, and issuance by the Bureau of Customs of Customs Memorandum Circular No. 262-2012 on 16 November 2012, the Philippines is now implementing the 2012 version of the AHTN.

1 The Second Protocol to amend the AHTN Protocol was signed on 08 April 2010 in Viet Nam.