WORLD CUSTOMS ORGANIZATION ORGANISATION MONDIALE DES DOUANES ` NC1059E1b (HSC/37/March 2006) - 37 th Session O. Eng./Fr. - Brussels, 31 March 2006.

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1 WORLD CUSTOMS ORGANIZATION ORGANISATION MONDIALE DES DOUANES ` Established in 1952 as the Customs Co-operation Council Créée en 1952 sous le nom de Conseil de coopération douanière HARMONIZED SYSTEM COMMITTEE NC1059E1b - 37 th Session O. Eng./Fr. - Brussels, 31 March REPORT TO THE CUSTOMS CO-OPERATION COUNCIL ON THE 37 th SESSION OF THE HARMONIZED SYSTEM COMMITTEE Note : This Report is divided as follows : Body and Annexes A to IJ Part I : Annexes N/1 to N/4 Part II : Annexes O/1 to O/21 Part III : Annexes P/1 to P/15 Part IV : Annexes P/16 to R Part V : Annex S, 1 st part Part VI : Annex S, 2 nd part Part VII : Annex S, 3 rd part Part VIII : Annexes T/1 to V 1. The Harmonized System Committee held its 37 th Session from 20 March to 31 March 2006 at the Headquarters of the World Customs Organization (WCO) in Brussels. The meeting was chaired by Mr. D. BECK (USA). 2. The following 59 Members (58 countries and 1 Customs and Economic Union) were represented : Countries : ALGERIA ARGENTINA AUSTRALIA BELARUS BRAZIL BURKINA FASO CANADA CHINA COLOMBIA CONGO (Dem. Rep. of) CÔTE D IVOIRE CZECH REPUBLIC EGYPT FINLAND FRANCE GABON GERMANY INDIA JAPAN JORDAN KAZAKHSTAN KENYA KOREA (Rep. of) KUWAIT LATVIA LIBYAN ARAB JAMAHIRIYA MADAGASCAR MALAYSIA MEXICO NETHERLANDS NEW ZEALAND NIGERIA NORWAY PHILIPPINES PORTUGAL ROMANIA RUSSIAN FEDERATION SAUDI ARABIA SENEGAL SERBIA AND MONTENEGRO SLOVAKIA SOUTH AFRICA SPAIN SRI LANKA SWEDEN SWITZERLAND TAJIKISTAN THAILAND TUNISIA UGANDA UKRAINE UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES VENEZUELA VIETNAM ZAMBIA ZIMBABWE Note : Shaded parts will be removed when documents are placed on the WCO documentation database available to the public. Copyright 2006 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to copyright@wcoomd.org.

2 NC1059E1b Customs and Economic Union : EUROPEAN COMMUNITY (EC). 3. The following 10 Members of the WCO and 5 international organisations were represented by observers : Members of the WCO : ANGOLA BARBADOS BENIN DOMINICAN REPUBLIC ECUADOR GAMBIA GHANA HONG KONG, CHINA KYRGYZSTAN PARAGUAY International organisations : THE CO-OPERATION COUNCIL FOR THE ARAB STATES OF THE GULF (GCC) INTERNATIONAL CHAMBER OF COMMERCE (ICC) ORGANISATION FOR THE PROHIBITION OF CHEMICAL WEAPONS (OPCW) WEST AFRICAN ECONOMIC AND MONETARY UNION (UEMOA) UNEP (ROTTERDAM CONVENTION) 4. A list of the delegates and observers who attended the meeting is reproduced in Annex V to this Report. 2. I. ADOPTION OF THE AGENDA (Doc. NC1006E1j) 5. At the request of the Delegates of the EC and South Africa, Agenda Item IX.6 was deleted from the Agenda. Both administrations expressed their willingness to endeavour to settle the divergences with respect to the classification of the product involved bilaterally. The two administrations were invited to inform the Committee of the outcome of their negotiations on this matter. 6. Agenda Item IX.18 was deleted from the Agenda and postponed to the next session at the request of the Delegate of Japan. 7. The Committee agreed to have only a preliminary discussion on Agenda Items IX.13 (at the request of the US Delegate), IX.16 (at the request of the Delegates of Brazil and Thailand), IX.19 (at the request of the Delegate of Japan) and X.1 (at the request of the EC Delegate). 8. With regard to Agenda Item IX.15, concerns were expressed by several delegates that this matter had been entered on the agenda following a request from a private company, which they considered to be out of line with the WCO policy vis-à-vis the treatment of classification queries lodged with the Secretariat by private sector. Given that the

3 classification of the product concerned did not present problems to any Customs administration, it was suggested that this issue be deleted from the Agenda. NC1059E1b 9. Mr. MWANSA, Director Tariff and Trade Affairs, while drawing the Committee s attention to Rule 10 of the Rules of Procedure of the Committee, stressed that the inclusion of this item had been requested by the Secretary General, and therefore believed that it should be maintained in the Agenda of this Committee session. This request was in full compliance with the provision of the Convention and the Rules of Procedure. 10. Following this clarification, the Committee agreed to have a demonstration of the commodity at issue during this session, as requested by the US Administration, but to postpone the examination of its classification to the next session of the Committee. 11. Finally, it was agreed to forward Agenda Item IX.20 to the HS Review Sub-Committee, given the scope of the proposal, but, at the request of the Observer of Paraguay, to have a presentation of the product concerned at this Committee session. 12. Subject to the foregoing, the Committee adopted the Agenda, which is reproduced in Annex A to this Report. This Annex also serves as the Table of Contents. II.1. POSITION REGARDING CONTRACTING PARTIES TO THE HS CONVENTION AND RELATED MATTERS (Doc. NC1008E1a) 13. The Chairperson informed the Committee on developments regarding progress in the application of the Harmonized System by Contracting and non-contracting Parties since the last session of the HS Committee as outlined in the above-mentioned document. 14. Referring to the most recent notifications received by the Secretariat after the publication of Doc. NC1008E1a, Mr. WIND, Deputy Director, informed the Committee that Madagascar had accepted all nine HS-related Recommendations and would apply them together with the HS 2007 version as from 1 January He explained that Turkey had accepted the Recommendations regarding Ozone 2003, Chemical Weapons 1999 and Standard Units of Quantity 2001 and would apply them as from 1 January He continued informing the Committee that Ukraine had accepted four Recommendations (Standard Units of Quantity 2001, Pre-entry Classification 1996, Good Classification Model 1998 and Chemical Weapons 1999) and that Peru had accepted the Recommendation regarding Ozone 2003 as from 9 March The Deputy Director finally noted that the Republic of Guinea had informed the Secretariat on the application of HS 2002 version within the Economic Community of West African States (ECOWAS) and he reminded the Committee at that occasion that countries being members of Customs unions had the obligation to notify individually the Secretariat on its respective Customs regimes. He concluded in pointing out that the UK Customs website had been updated and that Sri Lanka and Nigeria provided the Secretariat with their current tariff on CD-Rom and in paper form, respectively. 16. The Delegate of Brazil informed the Committee that his country had accepted all but three Recommendations, i.e., except the Recommendation regarding hand-made products, Firearms and Units of Quantity. As far as the first two Recommendations are concerned he pointed out that it was foreseen to accept these two Recommendations jointly within Mercosur and that no date had been fixed yet for the acceptance of these two 3.

4 NC1059E1b Recommendations. With regard to the third Recommendation he stressed that his country had difficulties to accept this Recommendation since his administration was applying a different system of Units of Quantity. He explained that his country was willing to make an effort in order to undertake the necessary work for the acceptance of this Recommendation, and concluded that his country was about to finalize the preparation work for the timely implementation of HS 2007 which was foreseen to be jointly made within Mercosur. 17. The EC Delegate highlighted the importance of a timely implementation of HS 2007 and urged the remaining 15 Contracting Parties which had not yet informed the Secretariat about the HS 2002 implementation to focus their work efforts now on the implementation of HS He welcomed the acceptance by Japan of the Recommendation regarding the application of HSC Decisions and urged other Contracting Parties to speed up their internal procedures for the acceptance of this Recommendation. Referring to the matrix in Annex III which listed decisions not applied by Contracting Parties he finally underlined the importance that the Committee should dispose the most recent information on the application or nonapplication of HS related Recommendations. 18. The Delegate of Norway informed the Committee that the Norwegian tariff was available on the internet in English and that the information given in Annex II on page 5 should be updated accordingly. 19. Administrations were invited to inform the Secretariat about any changes in the information provided in the working document. 20. The updated information is reproduced in Annexes B/1 to B/5 to this Report. 4. II.2. REPORT ON THE LAST MEETING OF THE POLICY COMMISSION (54 th SESSION) (Doc. NC1009E1a) 21. The Chairperson presented Doc. NC10091E1a, which contained a summary of the HS related issues considered by the Policy Commission (54 th Session) in December The Deputy Director then made reference to paragraph 34 of the working document and informed the Committee that the meeting dates for the High Level ad hoc Group on HS Matters had been changed from April 2006 to April He also noted that the ICC had been invited to attend the meeting. With regard to other private sector parties, the Secretariat had posted an invitation on its Public Web site. Registration would be open until 24 March 2006 and, subsequently, the Secretariat would select a number of private sector participants covering a wide range of relevant sectors. 23. One Delegate stated that he was preoccupied by some of the information provided in the working document. In paragraph 11, it was stated that incorrect versions of the Harmonized System were used for WTO negotiations. He enquired whether this should be taken to mean that these versions contained errors or whether it more correctly referred to previous editions of the Harmonized System, which, in his view, made a difference. 24. He was also concerned if the WCO was loosing ground to the WTO, as indicated in the document. He deplored that some administrations had taken issues directly to the WTO, rather than to the Harmonized System Committee, and if this approach continued action needed to be taken. Finally, he noted that the WCO was the appropriate body to handle a possible advance tariff ruling system.

5 NC1059E1b 25. In response, the Deputy Director noted that the wording on the Secretary General s Oral Report had been copied from the Policy Commission Report. He explained that the Policy Commission Delegates did not focus on Harmonized System matters only, but on trade facilitation, in general. Since most WTO Members were also WCO Members, it was important that Customs administrations were involved in the WTO work as well and in this context the Secretary General had appealed that Customs should consult with their WTO counterparts at national level. 26. The Committee, finally, took note of the developments in the Policy Commission. II.3. APPROVAL OF DECISIONS TAKEN BY THE HARMONIZED SYSTEM COMMITTEE AT ITS 36 th SESSION (Docs. NC1005E1a and NG0105E1a) 27. The Chairperson indicated that on five issues reservations had been entered following the closure of the 36 th Session of the Committee. 28. The EC, the Argentinean Administration, the South African Administration and the Brazilian Administration entered a reservation concerning the classification of separately presented outdoor units of compression-type split-system air conditioning machines in subheading The EC, the Brazilian Administration, the Russian Administration and the South African Administration requested that their question be referred to the Council. The Argentinean Administration specified that the matter should be referred directly to the Committee in accordance with Council Decision No However, since the other Contracting Parties had requested that the same matter be referred to the Council, it would be referred to the Council taking into account paragraph 2 (c) of the Council Decision No The South African Administration had entered a reservation concerning the classification of separately presented indoor units of air conditioning systems in subheading , the Brazilian Administration had entered a reservation concerning the classification of Kobe 3-piece Dinette Set in subheading and the Russian Administration had entered a reservation concerning the classification of a product containing more than 98.5 % of sodium sulphate in subheading and the classification of a product containing more than 99.2 % of sodium sulphate in subheading At the request from the Administrations concerned, these four questions would be referred to the Council at its 107 th /108 th Sessions which will take place in June/July Following these clarifications, the Committee took note of the Secretariat s report that the other decisions taken by the Committee at its 36 th Session had been deemed approved by the Council, in accordance with Article 8.2 of the HS Convention. II.4. CAPACITY BUILDING ACTIVITIES OF THE NOMENCLATURE AND CLASSIFICATION SUB-DIRECTORATE (Doc. NC1010E1a) 31. In response to a question posed by the EC Delegate regarding the target audience of the HS 2007 conference referred to in paragraph 11 of the working document, the Deputy Director explained that, apart from the public sector, the Members of the WCO, Contracting 5.

6 NC1059E1b Parties to the HS, as well as non-wco Members, would be invited to the conference in writing. 32. The Delegate of Japan thanked the Secretariat for its comments made in paragraph 2 of the working document and informed the Committee that his administration would continue to support the HS-related capacity building activities of the Secretariat. Recognising the importance of transferring from HS 2002 to HS 2007, he pointed out that the HS 2007 would be included in his administration s programmes. In this connection, he explained the present progress regarding the national legal procedures to reflect the HS 2007 in the national tariff of Japan. 33. As mentioned in paragraphs 4 and 5 of the working document, he indicated that Japan was also supporting the HS-related activities in the framework of the APEC, under which another HS seminar would be held in Malaysia in June The Chairperson expressed his personal thanks to Japan for providing funding to the HS-related capacity building activities of the Secretariat for years and noted that the Committee should keep in mind to appreciate the Japanese efforts. 35. The Committee took note of the discussions and the other information given in the working document. 6. II.5 CO-OPERATION WITH OTHER INTERNATIONAL ORGANISATIONS (Doc. NC1011E1a) 36. The Chairperson informed the Committee about the important activities which had occurred during the intersession in respect of the co-operation with other international organisations. He highlighted the co-operation with UNEP, OPCW, EU and APEC that was reported in the working document and the contribution made by those organisations to many discussions of this Committee and the Review and Scientific Sub-Committees. 37. Complementing the information in the working document, the Deputy Director briefed the Committee that on 20 and 21 February 2006, a Secretariat officer attended a meeting of the ad Hoc Group on Counterfeit Medicines in the Council of Europe, Strasbourg. Although counterfeit is not really related to the Nomenclature, it had been suggested to study whether the Customs classification systems could be adopted to tackle pharmaceutical crime more efficiently. It was therefore the Nomenclature Sub-Directorate that was represented in this meeting. 38. The Secretariat officer had made a presentation on the Harmonized System (HS) focussing on (i) the structure with regard to pharmaceuticals; (ii) the amendment procedure; (iii) the use of Recommendations; and (iv) examples of HS subdivisions inserted at the request of international organisations. 39. The presentation was appreciated by the participants who agreed that an amendment of the HS would properly not be the most appropriate measure to combat trade in counterfeit pharmaceuticals since counterfeiters would always attempt to classify the products correctly. It was, however, decided to establish a Working Party to consider whether the HS could be adapted to combat and monitor pharmaceutical crime more efficiently. The Secretariat will attend this Working Group and inform the Committee about its outcomes. 40. The Deputy Director also informed the Committee that on 21 and 22 February 2006, the Director, Tariff and Trade Affairs Directorate, attended a WTO meeting of the Trade and

7 NC1059E1b Environment Committee in Special Session, concerning the trade in environmentally friendly goods and services. 41. Referring to paragraphs 7 and 8 of the working document, the EC Delegate thanked the WCO Secretariat for having contributed to the two events recently organised by the Directorate General of the European Commission for Taxation and Customs Union by nominating a technical officer to participate in these Scientific and Project Groups. 42. The Committee took note of the activities of the Secretariat in the field of co-operation with other international organisations. II.6. NEW INFORMATION PROVIDED ON THE WCO WEB SITE (Doc. NC1012E1a) 43. The Chairperson informed the Committee of the latest developments with regard to the Public and Members Web sites. He asked delegations to verify whether the information provided in the Annex to the working document was up-to-date and to inform the Secretariat about any lacking or incorrect information. 44. One delegate noted that the Secretariat s classification advice published on the Members Web site had not been updated for some time. 45. In response, the Deputy Director confirmed that there had been a delay in publishing the classification advice. The Secretariat had concentrated on the publication of historical HS Committee working documents, which had reached a stage, where documents were no longer available in electronic format. Consequently, they had to be scanned, purged for confidential information and then re-scanned. This was a time-consuming work, but it had progressed well recently and work on HSC/5 documents was near completion. The Secretariat will strive to publish its classification advice. 46. Another delegate noted that once a year, the Committee was informed about free trade agreements (FTAs) and the percentage of national revenue represented by Customs duties, respectively. Since this information was based on publicly available information, he suggested that it would be useful placing this information on the WCO Public Web site in the future. 47. The Deputy Director explained that the Committee, at its 35 th Session in March 2005, had decided that this annual information should be presented to the Committee again at its autumn 2006 session. While the Secretariat was not against the proposal of publishing the information on the Public Web site, he suggested that the proposal be included in the next documents on these issues to provide an opportunity for the Committee to consider it further. The Committee agreed to this approach. 48. The Committee, finally, took note of the information referred to in the working document. 7.

8 NC1059E1b II.7. RECOMMENDATION OF 25 JUNE 2005 CONCERNING AMENDMENTS TO THE HARMONIZED SYSTEM (Doc. NC1039E1a) 49. When the Chairperson had presented this question, the Delegate of the Russian Federation explained the reasons which had prompted his Administration to object to the amendment of Article 8 of the Convention which was referred to in the Council Recommendation of 25 June 2005 : - The existing decision-making process did not guarantee the objectiveness and validity of decisions taken by the Harmonized System Committee in respect of purely scientific questions. - The Harmonized System Committee should take decisions on purely scientific questions only after receiving a detailed report on them from the Scientific Sub-Committee. - Fixing a limit of two reservations, without establishing any appeal procedure, was too strict where purely scientific questions were concerned, and might not necessarily enable the truth to be reflected. - The Rules of Procedure of the Harmonized System Committee did not contain any provision similar to Rule 65 of the UN General Assembly Rules of Procedure. - A limit on the number of reservations could be established by the Convention only if the Rules of Procedure of the Harmonized System Committee and the Scientific Sub- Committee were amended simultaneously. 50. The Delegate of the Russian Federation went on to suggest that the Secretariat undertake a study with a view to proposing possible amendments to the texts of the Harmonized System Committee and Scientific Sub-Committee Rules of Procedure, along the lines suggested. 51. In response, the Chairperson said that if the texts were to be re-examined by the Secretariat, this could take place only once the Council had taken note of the objection to the amendment of Article 8 which had been entered by the Russian Federation, and on the basis of specific proposals which administrations were invited to submit. 52. The Deputy Director added that as things stood at present, while it appeared that an amendment to Article 8 of the HS Convention would be supported by the Committee, it had to be conceded that from a formal standpoint no proposed amendment had actually been approved as yet. As this was a recommendation of the High-Level Working Group, the Secretariat would prepare a new document presenting a draft amendment to Article 8, for examination at the Committee s next session. With regard to the possible amendment of the Harmonized System Committee and Scientific Sub-Committee Rules of Procedure, he invited administrations to submit their comments and proposals during the intersession. 8.

9 NC1059E1b II.8 OTHER 53. Referring to the Report of the 36 th Session of the HS Committee (Doc. NC1004E1b), the Delegate of Burkina Faso pointed out that the last sentence of paragraph 39 of the document contained inaccurate information. He informed the Committee that the reference to Kenya should read Burkina Faso and that the UEMOA should have been mentioned in the text together with the ECOWAS. 54. The Committee took note of this information. ACCEPTANCE OF THE RUSSIAN LANGUAGE VERSION OF THE HS 2007 NOMENCLATURE 55. The Delegate of the Ukrainian Administration opened the discussion by informing the Committee that a Special Working Group of experts from the CIS Customs administrations had finalised the Russian language version of the HS 2007 Nomenclature, which had been submitted to the Committee for acceptance. 56. He thanked the administrations that had contributed to the development of the agreed text of the HS 2007 Nomenclature in Russian. He also expressed his appreciation of the Secretariat s continued support in maintaining the use of Russian as a working language for HS matters. He then invited the Committee to accept the text finalised by the Special Working Group. 57. The Committee accepted the Russian working language version of the HS 2007 Nomenclature, which would be published as a WCO publication. The administrations using the Russian language were encouraged to use the text of the HS 2007 Nomenclature that had been accepted by the Committee. SECRETARIAT STAFF CHANGES 58. The Director of Tariff and Trade Affairs introduced Mr. L. KARLSSON, Director of Capacity Building, and Mr. M. SCHMITZ, Director of Compliance and Facilitation, who had been nominated by the Council at its 105 th /106 th Sessions in June 2005 and joined the Secretariat on 1 January Mr. M. Schmitz welcomed the delegates of the Committee and emphasised the great potential of the Harmonized System as a tool to be used for security systems, risk assessment, risk management and targeting techniques, which were being developed and improved by the Directorate of Compliance and Facilitation. 60. Mr. L. Karlsson briefed the Committee on the programmes pursued by his Directorate, which were known by the names Columbus and SAFE, stressing the importance of the Harmonized System as a core business of the Customs and expressing his appreciation of the efforts being made by the HS Committee. 61. The Director of Tariff and Trade Affairs went on to inform the Committee that Mr. R. HELLER (United States), who had been the US delegate to the HS Review Sub- Committee for many years, had recently joined the Secretariat as Technical Officer. 9/Rev.

10 NC1059E1b 62. He then paid tribute to Mr. L. CALLAGHAN, Senior Technical Officer, who would shortly be returning to his home administration on completion of his term of service at the Secretariat. The Director commended Mr. Callaghan on his dedicated and highly competent approach to work and wished him every success in his future career. III. GENERAL QUESTIONS 63. The Committee's conclusions concerning Agenda Item III are reproduced in Annexes C/1 to C/5 and R to this Report. IV. RECOMMENDATIONS 64. The Committee's conclusions concerning Agenda Item IV are reproduced in Annexes D/1 to D/3 and N/1 to N/3 to this Report. V. REPORT OF THE SCIENTIFIC SUB-COMMITTEE (21 st Session) 65. The Harmonized System Committee examined the conclusions reached by the Scientific Sub-Committee at its 21 st Session. 66. The results of this examination are set out in Annexes E and O/3 to O/6 to this Report. 67. On behalf of the Committee, the Chairperson thanked the Scientific Sub-Committee and its Chairperson for the excellent work accomplished at the 21 st Session of the Scientific Sub-Committee. 10. VI. REPORT OF THE REVIEW SUB-COMMITTEE (32 nd Session) 68. The Harmonized System Committee examined the conclusions reached by the Review Sub-Committee at its 32 nd Session. 69. The results of this examination are set out in Annexes F, O/11, P/3 to P/18 and Q/2 to Q/5 to this Report. 70. On behalf of the Committee, the Chairperson thanked the Review Sub-Committee and its Chairperson for the excellent work accomplished at the 32 nd Session of the Review Sub- Committee. VII. REPORT OF THE WORKING PARTY (37 th Session) 71. The Harmonized System Committee examined the conclusions reached at the Working Party s presessional meeting. The conclusions of the Committee are reproduced in Annexes G/1 to G/10 to this Report. 72. The texts finalised by the Working Group and adopted by the Committee are set out in Annexes O/12 to O/21 to this Report.

11 NC1059E1b 73. The Chairperson of the Working Party noted that the discussion of this Agenda Item in the Committee revealed that certain information had apparently not been made available to the Working Party when it undertook its work. Acknowledging the fact that delegations might not be able to attend the Working Party due to financial constraints, he pointed out that all administrations nevertheless had access to its working documents and were able to submit advance comments to the Secretariats should they not be in a position to attend its session. He encouraged administrations to do so, as it was the specific function of the Working Party to assure that the Classification Opinions and the Explanatory Notes reflected the actual identity of the product. 74. On behalf of the Committee, the Chairperson congratulated the Working Party and its Chairperson on their excellent work. VIII. FURTHER STUDIES 75. The Committee's conclusions concerning Agenda Item VIII are reproduced in Annexes H/1 to H/10, O/1, O/2, O/7, O/8 and P/1 to this Report. IX. NEW QUESTIONS 76. The Committee's conclusions concerning Agenda Item IX are reproduced in Annexes IJ/1 to IJ/19, N/4, O/9, O/10, P/2, P/19, Q/1, Q/6, T/1 and T/2 to this Report. X. ADDITIONAL LIST 77. The Committee's conclusions concerning Agenda Item X.1 are reproduced in Annex K to this Report. XI. AMENDMENTS TO THE EXPLANATORY NOTES CONSEQUENTIAL TO THE ARTICLE 16 RECOMMENDATION OF 26 JUNE 2004 (COMPREHENSIVE TEXT) (Doc. NC1037E1a) 78. The Committee's conclusions concerning Agenda Item XI are reproduced in Annexes L and S to this Report. XII. OTHER BUSINESS LIST OF QUESTIONS WHICH MIGHT BE EXAMINED AT A FUTURE SESSION (Doc. NC1038E1a) 79. The Committee's conclusions concerning Agenda Item XII.1 (the list of questions which might be examined at a future session) are reproduced in Annexes M and U to this Report. 11.

12 NC1059E1b XIII. ELECTION OF CHAIRPERSON AND VICE-CHAIRPERSONS OF THE HARMONIZED SYSTEM COMMITTEE, THE HARMONIZED SYSTEM REVIEW SUB-COMMITTEE AND THE WORKING PARTY ELECTION OF CHAIRPERSON AND VICE-CHAIRPERSONS OF THE HARMONIZED SYSTEM COMMITTEE 80. At the end of its 37 th Session, on the proposal of the Delegate of Brazil, seconded by the Delegate of Australia, the Committee unanimously re-elected Mr. D. BECK (USA) as Chairperson for the 38 th and 39 th Sessions. 81. On the proposal of the Delegate of Canada, seconded by the Delegate of Norway, Mr. H. KAIDA (Japan) was unanimously elected as First Vice-Chairperson. 82. On the proposal of the Delegate of the European Community, seconded by the Delegate of Tunisia, Mr. S. SANGARE (Côte d Ivoire) was unanimously re-elected as Second Vice-Chairperson. ELECTION OF CHAIRPERSON AND VICE-CHAIRPERSON OF THE HARMONIZED SYSTEM REVIEW SUB-COMMITTEE 83. On the proposal of the Delegate of the United States, seconded by the Delegate of South Africa, the Committee unanimously re-elected Mr. P. JOFFRE (France) as Chairperson of the Review Sub-Committee. 84. On the proposal of the Delegate of the Democratic Republic of the Congo, seconded by the Delegate of Sri Lanka, Mr. S. GRØNLIE (Norway) was unanimously re-elected as Vice-Chairperson of the Review Sub-Committee. ELECTION OF CHAIRPERSON OF THE WORKING PARTY 85. On the proposal of the Delegate of Madagascar, seconded by the Delegate of Switzerland, the Committee unanimously re-elected Mr. S. SANGARE (Côte d Ivoire) as Chairperson of the Working Party. XIII. DATES OF NEXT SESSIONS 86. The provisional dates of the next meetings of the Review Sub-Committee, the Working Party and the Harmonized System Committee are as follows : (a) Review Sub-Committee (33 rd Session) Monday, 15 May 2006 (10:00 a.m.) to Friday, 19 May

13 NC1059E1b (b) Working Party Thursday, 28 September 2006 (10:00 a.m.) and Friday, 29 September (c) Harmonized System Committee (38 th Session) Monday, 2 October 2006 (10:00 a.m.) to Friday, 13 October D. Beck, Chairperson. * * * 13.

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15 Annex A to Doc. NC1059E1b TABLE OF CONTENTS Agenda Item Number Subject Paragraphs in Report or Annexes I. Adoption of the Agenda 5 to 12 II. Report by the Secretariat 1. Position regarding Contracting Parties to the HS Convention and related matters 2. Report on the last meeting of the Policy Commission (54 th Session) 3. Approval of decisions taken by the Harmonized System Committee at its 36 th Session 4. Capacity building activities of the Nomenclature and Classification Sub-Directorate 13 to 20 B/1 to B/5 21 to to to Co-operation with other international organisations 36 to New information provided on the WCO Web site 43 to Recommendation of 25 June 2005 concerning amendments to the Harmonized System 49 to Other 53 to 62 III. General questions Study with a view to better understanding why certain Recommendations have not received a greater level of acceptance 2. Insertion of pictures in the Compendium of Classification Opinions C/1 C/2 3. Use of references to specific administrations in reports C/3 4. Correlation between the Harmonized System and the product coverage of selected international Conventions (amendments consequential to the Article 16 Recommendation of 26 June 2004 and insertion of references to the Rotterdam and Stockholm Conventions) C/4, R 5. Progress report on the implementation of the HS 2007 edition C/5 A/1.

16 Annex A to Doc. NC1059E1b IV. Recommendations 64 Consequential amendments to the Article 16 Recommendation of 26 June 2004 of the following Recommendations : 1. Recommendation of the Customs Co-operation Council on the insertion in national statistical nomenclatures of subheadings to facilitate the collection and comparison of data on the international movement of substances controlled by virtue of amendments to the Montreal Protocol on substances that deplete the ozone layer (28 June 2003) 2. Recommendation of the Customs Co-operation Council on the insertion in national statistical nomenclatures of subheadings for substances controlled under the Convention on the Prohibition of the development, production, stockpiling and use of Chemical Weapons and on their destruction (18 June 1996) (amended 25 June 1999) 3. Recommendation of the Customs Co-operation Council on the use of standard units of quantity to facilitate the collection, comparison and analysis of international statistics based on the Harmonized System (30 June 2001) D/1, N/1 D/2, N/2 D/3, N/3 V. Report of the Scientific Sub-Committee 1. Report of the 21 st Session of the Scientific Sub-Committee 65 to Matters for decision E, O/3 to O/6 VI. Report of the Review Sub-Committee 1. Report of the 32 nd Session of the Review Sub-Committee 68 to Matters for decision F, O/11, P/3 to P/18, Q/2 to Q/5 VII. Report of the presessional Working Party 71 to Possible amendment of the Explanatory Note to heading G/1, O/12 2. Possible amendment of the Explanatory Notes with respect to asbestos G/2, O/13 3. Amendments to the Compendium of Classification Opinions to reflect the decision to classify concentrated elderberry juice in HS code Amendments to the Compendium of Classification Opinions to reflect the decision to classify two graduated urinary drainage bags and meters in subheading G/3, O/14 G/4, O/15 5. Amendments to the Compendium of Classification Opinions to G/5, O/16 A/2.

17 reflect the decision to classify two types of footwear in subheading Annex A to Doc. NC1059E1b 6. Amendments to the Compendium of Classification Opinions to reflect the decision to classify a reach stacker in subheading Amendments to the Compendium of Classification Opinions to reflect the decision to classify a reach stacker in subheading Amendments to the Compendium of Classification Opinions to reflect the decision to classify a product by the name P-Touch 7000/8000 in subheading Amendments to the Compendium of Classification Opinions to reflect the decision to classify an audio compact disc manufacturing system in subheading Amendments to the Compendium of Classification Opinions to reflect the decision to classify set top boxes in subheading G/6, O/17 G/7, O/18 G/8, O/19 G/9, O/20 G/10, O/21 VIII. Further studies Possible amendment of the Explanatory Note to heading (HS 2007) H/1, P/1 2. Possible amendment of the Explanatory Note to heading H/2, O/7 3. Possible amendment to the Explanatory Notes to reflect the decision to classify a liquid micronutrient preparation in subheading Possible amendment of the Explanatory Notes to reflect the classification of a certain type of footwear in subheading H/3, O/1 H/4, O/2 5. Classification of shelved furniture H/5 6. Possible amendment of the Explanatory Note to heading 95.04, arising from the classification of the PS2 H/6, O/8 7. Classification of pegfilgrastim (INN) H/7 8. Study on the scope of Note 2 to Chapter 30 and of subheading H/8 9. Classification of tubes with reagents H/9 10. Classification of ivermectin (INN) and similar products H/10 IX. New questions 76 A/3.

18 Annex A to Doc. NC1059E1b 1. Amendments to the Compendium of Classification Opinions consequential to the Article 16 Recommendation of 26 June Classification of ADMUL DATEM 1954 and Multec Data 2520 S (Request from the South African Administration) IJ/1, N/4 IJ/2 3. Classification of certain flooring panels IJ/3 4. (Deleted) 5. Amendments to heading and other parts of the Nomenclature (HS 2007) 6. Classification of mineral wool (Request from the South African Administration IJ/4, P/2, Q/1, T/1 IJ/5 7. Classification of spray guns IJ/6 8. Classification of Hebo s SSB2 scroll bending machine with SPS2 computer control and pole changing motor 9. Classification of base station (Request from the South African Administration) 10. Classification of certain halogen lamps for guns (Request from the Swiss Administration) 11. Classification of certain power modules, used in electrical converters 12. Possible amendment of the Explanatory Note to heading (exclusion paragraph) IJ/7 IJ/8 IJ/9 IJ/10 IJ/11, O/9 13. Possible amendment of the Explanatory Notes to Chapter 87 IJ/ Possible amendments of the Explanatory Notes IJ/13, O/ Classification of a two-wheeled electrical device for the transport of a person 16. Classification of frozen chicken cuts with addition of salt (Request from the EC) 17. Possible amendment of Subheading Note 1 to Chapter 85 (HS 2007) 18. Classification of heat-treated soya beans (Request from Argentina) 19. Possible amendment of the Subheading Explanatory Note to subheading IJ/14 IJ/15 IJ/16, P/19, Q/6, T/2 IJ/17 IJ/ Possible amendment of heading IJ/19 A/4.

19 Annex A to Doc. NC1059E1b X. Additional list Classification of certain non-wovens (Request from the EC) K XI. Amendments to the Explanatory Notes consequential to the Article 16 Recommendation of 26 June 2004 (comprehensive text) 78, L, S XII. Other List of questions which might be examined at a future session M, U XIII. Elections 80 to 85 XIV. Dates of next sessions 86 List of delegates V * * * A/5.

20 LIST OF CONTRACTING PARTIES TO THE HARMONIZED SYSTEM CONVENTION Situation as of 31 March 2006 (120 countries and 1 Customs and Economic Union) Annex B/1 to Doc. NC1059E1b Algeria Argentina Australia Austria Azerbaijan Bahrain Bangladesh Belarus Belgium Bolivia Botswana Brazil Bulgaria Burkina Faso Cambodia Cameroon Canada Central African Republic Chad Chile China Colombia Congo (Dem. Rep.) Côte d'ivoire Croatia Cuba Cyprus Czech Republic Denmark Egypt Eritrea Estonia Ethiopia Fiji Finland France Gabon Germany Greece Guinea Haiti Hungary Iceland India Indonesia Iran Ireland Israel Italy Japan Jordan Kazakhstan Kenya Korea (Rep.) Kuwait Latvia Lebanon Lesotho Libyan Arab Jamahiriya Lithuania Luxembourg The Former Yugoslav Republic of Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Mauritania Mauritius Mexico Moldova Mongolia Morocco Myanmar Namibia Netherlands New Zealand Niger * * * Nigeria Norway Pakistan Panama Peru Philippines Poland Portugal Qatar Romania Russia Rwanda Saudi Arabia Senegal Serbia and Montenegro Singapore Slovakia Slovenia South Africa Spain Sri Lanka Sudan Swaziland Sweden Switzerland Tajikistan Thailand Togo Tunisia Turkey Uganda Ukraine United Arab Emirates United Kingdom United States Uzbekistan Venezuela Vietnam Yemen Zambia Zimbabwe EC B/1.

21 Annex B/2 to Doc. NC1059E1b LIST OF COUNTRIES, TERRITORIES AND CUSTOMS OR ECONOMIC UNIONS USING THE HARMONIZED SYSTEM Afghanistan... x Albania... x Algeria... + Andorra... x Angola... x Antigua & Barbuda... x Argentina... + Armenia... x Australia... + Austria... + Azerbaijan... + Bahamas... x Bahrain... + Bangladesh... + Barbados... x Belarus... + Belgium... + Belize... x Benin... x Bermuda... x Bhutan... x Bolivia... + Bosnia and Herzegovina x Botswana... + Brazil... + Brunei Darussalam... x Bulgaria... + Burundi... x Burkina Faso... + Cambodia... + Cameroon... + Canada... + Cape Verde... x Central African Republic + Chad... + Chile... + China... + Colombia... + Comoros... x Congo (Dem. Rep.)... + Congo (Rep.)... x Cook Islands... x Costa Rica... x Côte d'ivoire... + Croatia... + Cuba... + Cyprus... + Czech Republic... + Denmark... + Djibouti... x Dominica... x Dominican Republic... x Ecuador... x Egypt... + El Salvador... x Equatorial Guinea... x Eritrea... + Estonia... + Ethiopia... + Fiji... + Finland... + France... + Gabon... + Gambia... x Georgia... x Germany... + Ghana... x Greece... + Grenada... x Guatemala... x Guinea... + Guinea Bissau... x Situation as of 31 March 2006 (TOTAL 202) Guyana... x Haiti... + Honduras... x Hong Kong, China... x Hungary... + Iceland... + India... + Indonesia... + Iran... + Ireland... + Israel... + Italy... + Jamaica... x Japan... + Jordan... + Kazakhstan... + Kenya... + Kiribati... x Korea (Rep.)... + Kuwait... + Kyrgyzstan... x Laos... x Latvia... + Lebanon... + Lesotho... + Liberia... x Libyan Arab Jamahiriya... + Liechtenstein... x Lithuania... + Luxembourg... + Macau, China... x Madagascar... + Malawi... + Malaysia... + Maldives... + Mali... + Malta... + Marshall Islands... x Mauritius... + Mauritania... + Mexico... + Micronesia... x Moldova... + Mongolia... + Morocco... + Mozambique... x Myanmar... + Namibia... + Netherlands... + Nepal... x New Caledonia (French Terr.).. x New Zealand... + Nicaragua... x Niger... + Nigeria... + Niue... x Norway... + Oman... x Pakistan... + Palau... x Panama... + Papua New Guinea... x Paraguay... x Peru... + Philippines... + Poland... + Polynesia (French Terr.)... x Portugal... + Qatar... + Romania... + Russia... + Rwanda... + Saint Kitts and Nevis... x Saint Lucia... x Saint Pierre and Miquelon (French Terr.)... x Saint Vincent and the Grenadines. x Samoa... x Saudi Arabia... + Senegal... + Serbia and Montenegro... + Sierra Leone... x Singapore... x Slovakia... + Slovenia... + Solomon Islands... x South Africa... + Spain... + Sri Lanka... + Sudan... + Suriname... x Swaziland... + Sweden... + Switzerland... + Syrian Arab Republic... x Tajikistan... x Tanzania... x Thailand... + The Former Yugoslav Republic of Macedonia... + Togo... + Tonga... x Trinidad and Tobago... x Tunisia... + Turkey... + Turkmenistan... x Tuvalu... x Uganda... + Ukraine... + United Arab Emirates... + United Kingdom... + United States... + Uruguay... x Uzbekistan... + Vanuatu... x Venezuela... + Viet Nam... + Wallis and Futuna (French Terr.)... x Yemen... + Zambia... + Zimbabwe... + EC... + Andean Community (CAN)...+x Caribbean Community (CARICOM)...+x Common Market for Eastern and Southern Africa (COMESA)...+x Commonwealth of the Independent States (CIS)...+x Economic and Monetary Community of Central Africa (CEMAC)...+x Economic Community of Western African States (ECOWAS)...+x Gulf Co-operation Council (GCC)...+x Latin American Integration Association (LAIA)...+x Southern Cone Common Market (MERCOSUR)...+x West African Economic and Monetary Union (UEMOA)...+x * * * B/2. Notes : + Acceptance (i.e., Contracting Party to the Harmonized System Convention). x Indicates application only. +x Some Members are Contracting Parties to the Harmonized System Convention.

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23 HS POSITION as of Annex B/3 to Doc. NC1059E1b (Contracting Parties) Country / Customs Union HS Contracting Parties Date of Accession Date of entry into force HS 2002 Implementation Date of Implementation Pre-entry Classification 1996 UNSD Trade Data 1997 Acceptance of Recommendations (by date of receipt of the notifications or date of implementation 1 ) Good Classification Work Model 1998 Ozone * 2003** Chemical Weapons 1996 (Amend. 99) Hand-made Products 2000 Units of Quantity 2001 Application of HSC Decisions 2001 Firearms 2002 Algeria Argentina Australia Austria Azerbaijan Bahrain Bangladesh Belarus ** Belgium Bolivia Botswana Brazil Bulgaria Burkina Faso Cambodia Cameroon Canada Central African Republic Chad Chile * China * Colombia * B/3/1.

24 Annex B/3 to Doc. NC1059E1b HS POSITION as of (Contracting Parties) Country / Customs Union HS Contracting Parties Date of Accession Date of entry into force HS 2002 Implementation Date of Implementation Congo (Dem. Rep.) Côte d'ivoire Croatia Pre-entry Classification 1996 UNSD Trade Data 1997 Acceptance of Recommendations (by date of receipt of the notifications or date of implementation 1 ) Good Classification Work Model 1998 Ozone * 2003** Chemical Weapons 1996 (Amend. 99) Hand-made Products 2000 Units of Quantity Application of HSC Decisions 2001 Cuba Cyprus Czech Rep Denmark Egypt Eritrea Estonia Ethiopia * Fiji Finland France Gabon Germany Greece Guinea Haiti Hungary Iceland India Indonesia Iran * Ireland Israel Italy Firearms 2002 B/3/2.

25 HS POSITION as of Annex B/3 to Doc. NC1059E1b (Contracting Parties) Country / Customs Union HS Contracting Parties Date of Accession Date of entry into force HS 2002 Implementation Date of Implementation Pre-entry Classification 1996 UNSD Trade Data 1997 Acceptance of Recommendations (by date of receipt of the notifications or date of implementation 1 ) Good Classification Work Model 1998 Ozone * 2003** Chemical Weapons 1996 (Amend. 99) Hand-made Products 2000 Units of Quantity 2001 Application of HSC Decisions 2001 Japan Jordan Kazakhstan Kenya Korea (Rep of) 1996 Kuwait Latvia Lebanon Lesotho Libyan Arab Jamahiriya Lithuania Luxembourg The Former Yugoslav Republic of Macedonia Madagascar Firearms ** Malawi Malaysia Maldives Mali Malta Mauritania Mauritius Mexico Moldova Mongolia Morocco Myanmar B/3/3.