ASEAN

Formed on August 8, 1967 in Thailand by the 6 founding members

ASEAN 6: Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand

FUNDAMENTAL PRINCIPLES OF ASEAN

Mutual respect

The right of every State to lead its national existence

Non-interference in the internal affairs of one another

Settlement of difference by peaceful manner

Renunciation of the threat

Effective cooperation

ASEAN Free Trade Area

Trade agreement to remove obstacles to freer trade

PRIMARY GOAL OF AFTA

Increase ASEANS competitive edge as a production base

Attract more foreign direct investment to ASEAN

COMMON EFFECTIVE PREFERENTIAL TARIFF SCHEME

Shall have common effective tariffs among themselves in AFTA but the level of tariffs

ASEAN TRADE IN GOODS AGREEMENT

Improvement over the CEPT-AFTA Scheme

It consolidates the ASEANs existing initiatives, obligations, and commitments

Signed in February 2009

Entered into force on May 17, 2010

OBJECTIVE OF ATIGA

To achieve free flow of goods in ASEAN to establish a single market and productive base

MOST-FAVORED NATION TREATMENT

A system of trade liberalization whereby a member of the GATT commits itself to impose lowest
tariff rates on imported items.
THE HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM

Harmonized Commodity Description and Coding System

Generally referred to as Harmonized System, it is a multipurpose international product

nomenclature developed by the World Customs Organization.

It consist of about 5,000 commodity groups; each classified by a six-digit code, arranged in a
legal and logical structure and is supported by well-defined rules to achieve uniform
classification.

It is used by more than 200 countries as basis for Customs tariffs and for the collection of
international trade statistics.

International convention on the Harmonized Commodity Description and Coding System

Under the Convention, contracting Parties are obligated to base their tariff schedules on the
structures of the HS nomenclature, although Parties set their own rates of duty.

Further, Parties may provide their own subdivision classifying goods beyond the six digit code of
the HS as required by their domestic laws.

USES OF THE HS

Tariff nomenclature

Statistical nomenclature

Harmonization of economic classification

Multipurpose nomenclature by international unions of shipping and transport organizations

International language

Base for the determination of the ROO

AHTN Structure

Classification of Blackcurrant Fruit Juice

HS six-digit classification : 2009.89
US code classification: 2009.8960.65
India code classification: 2009.8990
AHTN code classification: 2009.8910
AHTN

A common tariff nomenclature of the 10 ASEAN Member States adopted to further facilitate the
flow of trade within the region.
ASEAN Member States

1. Brunei 6. Myanmar
2. Cambodia 7. Philippines
3. Indonesia 8. Singapore
4. Laos 9. Thailand
5. Malaysia 10. Vietnam
AHTN

The adoption of the Philippines of the AHTN structure (up to the 8-digit subheadings ) further
supplemented with our national requirements in the form of alphanumeric subheadings.

Incorporating the import duty rates for both MFN and ATIGA.

The AHTN is currently maintained and updated by the Tariff Commission.

What is the Composition of the Harmonized system?

General Interpretative Rules (GIRs)

6 Rules providing the principles of classification of goods under the HS

Sections

21 Sections make up the HS

Chapters

Sections are divided into Chapters

There are 99 Chapters under the HS
However, chapter 77 is reserved for special uses by contracting Parties to the HS Convention

Headings

Chapters are divided into the headings

Headings are assigned with four-digit codes

Subheadings

Headings are further divided into subheading

HS subheadings are assigned with six-digit codes

AHTN STRUCTURE

Chapter Number (2 digit)

Heading Number (4-digit)

Subheading (6-digit)
 AHTN Subheading (8-digit)

THE GENERAL INTEPRETATIVE RULES

Rule 1 Terms of the Headings, Section\Chapter Notes

Rule 2a Incomplete or unfinished; Unassembled or disassembled
Rule 2b Mixtures or combinations
Rule 3 2 or more headings
Rule 3a Most specific
Rule 3b Essential character
Rule 3c Last in numerical order
Rule 4 Most akin
Rule 5a Special containers
Rule 5b Packing materials & containers
Rule 6 Subheading rule

Rule 1 Terms of the Headings, Section\Chapter Notes

Rifle made of wood

-Chapter 44 Wood and articles of wood; wood charcoal

Subject Article: Rifle made of wood

Chapter 44 is Wood and articles of wood; wood charcoal

However, Note 1 to Chapter 44 states that the Chapter does not cover Part of firearms (Heading
93.05)

Rule 2a Incomplete or unfinished; Unassembled or disassembled

Rule 3a Most specific

Wooden chair convertible into a step ladder
-Heading 94.01(Chairs made up of any material
-Heading 44.21 (Other articles of wood

Rule 3b Essential character

Chocolate truffle coffee consisting of decaffeinated coffee (40% by weight) with cocoa powder (60% by
weight)

Essential character of a product

Nature of the component

Bulk, Quality, Weight or Value

 Preference of the buyer

Role of the material in relation to the use of the goods

Rule 3c Last in numerical order

Chocolate truffle coffee consisting of decaffeinated coffee (50% by weight) with cocoa powder (50% by
weight)

Coffee (Heading 09.01)

Cocoa powder (Heading 18.05)
Rule 4 Most akin

Kinship may defend on such factors as:

Description
Character
Purpose
Designation
Production process
Nature of the goods
Rule 5a Special containers

Rule 5b Packing materials & containers

Rule 6 Subheading rule

The Latin word Mutatis Mutandis is used when comparing two or more cases or situations and
is defined as making necessary alterations while not affecting the main point at issue.

This is the last rule of the GIRs and is used to govern classification at the subheading levels. It
provides that classification is governed by the provisions of GIRs 1 to 5 but applied at the
subheading levels within the same Heading.

Classification Techniques

Identification of the goods

Enumerate goods that are excluded
Definition
Choose the Section and Chapter
Compare all possible Headings while reading pertinent legal notes
Use the GIRs to determine the appropriate heading classification
Compare all possible subheadings under the chosen heading by the dashlevel of subdivisions