AHTN AND ASEAN
goods under the HS
Background
The Harmonized Commodity and Coding System or
simply Harmonized System is an international product
nomenclature divided into commodity groups; each
identified by a 6 digit code, arranged in a logical
structure and supported by well-defined rules GIRS for
uniform product classification.
It is currently used by more than 200 countries and
economies, representing 98% of world trade, product
for customs tariffs, the collection of international trade
statistics and rules of origin. It was developed and
presently maintained by the WCO. The latest
amendments to the HS were incorporated in year 2017.
The HS nomenclature is governed by, and annexed to
the International Convention on the Harmonized
Commodity Description and Coding System.
Types of Amendment
 Merging of tariff lines
 Splitting of tariff lines
 Creation of new lines
Countries that have adopted the HS are not permitted
to alter in any way the descriptions associated to a
heading or a subdheading nor can the numerical codes
at the 4 or 6 digit level be altered. This is what keeps the
harmonized system harmonized.
The PH began implementing the harmonized tariff
coding system back in 1989 – the 104th country to do so.
In effect, all countries using the HS nomenclature have
the same commodity classification up to the 6 digit
subheadings.
Ex. Sweet corn
HS 6 digit classification : 0711.90
Japan code classification : 0711.90.099
US code classification : 0711.90.65.00
Phils. AHTN classification : 0711.90.11
Further, contracting parties MAY EXTEND a HS code
BEYOND the 6 digit for customs purposes as required by
their domestic laws.
Composition of HS
General Interpretative Rules (GIRs)
-6 rules providing the principles of classification of
Section
- 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 future use, while
chap. 98&99 are reserved for special uses by
contracting parties to the HS Convention (96 chapters)
Headings
-chapters are divided into headings
-headings are assigned with 4 digit codes
Subheadings
-headings are further divided into subheadings
-HS subhdgs are assigned with 6 digit codes
THE AHTN
The member states of ASEAN agreed to adopt a
common tariffs nomenclature to facilitate the flow of
trade with the region (AFTA).
The AHTN is based on the Hs up to 6 digit subheadings.
It is supplemented with the national requirements of
each ASEAN Member States in the form of 8 digit
subheadings.
any amendments on the HS would also be reflected on
the AHTN
STRUCTURE AND NUMBERING SYSTEM
AHTN STRUCTURE EXAMPLE
Blackcurrant fruit juice
HS 6 digit classification : 2009.89
US code classification : 2009.89.60.65
India code classification : 2009.89.90
AHTN code classification : 2009.89.10
Common up to the 6 digit subheading for ALL HS
CONTRACTING PARTIES.
Common up to the 8 digit subheading for ALL ASEAN
MEMBER STATES
AHTN 2017 SEC 1611 CMTA STRUCTURE
Section No. and title of the section – for ease of
reference only
Section notes- with legal bearing, re: classification
Chapter no. and title of the chapter- for ease of
reference only
Chapter and subheading notes - with legal bearing, re:
classification
Structure: 4 digit hdg code
6 digit hs/ahtn subhdg code
8 digit ahtn subhdg code
PH alphanumeric code
MFN (most favor) rates per EO’s 20, 21, 23 of 2017
ATIGA rates per EO’s 892 and 894 of 2010
Column 9 lists which ASEAN member states are
qualified/not qualified for ATIGA rates
ASEAN MEMBERS: CAMBODIA, BRUNEI, MALAYSIA, PH,
SINGAPORE, THAILAND, INDONESIA, LAOS,
MYANMMAR, VIETNAM
ASEAN MEMBER STATES ABBREVIATIONS:
Brunei BN, Cambodia KH, Indonesia ID, Laos LA,
Malaysia MY, Myanmar MM, Philippines PH, Singapore
SG, Thailand TH, Vietnam VN
All. All member states are eligible to avail the ATIGA
rate of duty
Except VN. Imports coming from Vietnam cannot avail
the ATIGA rate of duty
Only for SG and TH. Only imports coming from
Singapore and Thailand are eligible to avail the ATIGA
rate
SECTIONS
Section are designated by roman numerals, from I to XXI
Chapters
The numbers/codes are laid down in an ascending
manner.
The first chapter is designated by the 2 digit no. 01
(Chapter 1 – live animals) so on and so forth
Heading Number
The numbering/coding pattern is followed in the
headings and, if there are any, in subheadings.
Example: chap 10 cereals
10.01 wheat
The first heading is assigned with the numbers 10.01
In a heading code, notice that a dot is added after the
2nd digit of the chapter number.
Subheading numbers
Subheadings in the HS are up to 6 digits
Subhdgs in the AHTN are up to 8 digits
HS subheadings in the AHTN that are not further divided
are assigned .00 after the 6th digit example: 1002.10.00
Similarly, headings in the AHTN with no subheadings are
assigned 00.00 after the 4th digit example: 1002.00.00
To incorporate tariff requirements unique to the ph,
alphanumeric subheadings are created and
incorporated in the AHTN 2017 example: 8413.91.90A
RULES OF ORIGIN
Integral parts, like ATIGA, ASEAN
Why? Trading arrangement, preferential duty if may
FTA
Set of rules followed by countries to determine the
product.
- Set of principles to determine the economic content
and nationality of a product. They are used to ascertain
the origin of a good. i.e not where the good has been
shipped from, but where the good has been deemed to
have been produced or manufactured.
Country of Origin – where the goods are manufacture
Other uses of ROO include:
 to implement measures and instruments of
commercial policy such as anti-dumping duties
and quotas
 to determine whether imported products shall
be subjected to MFN or preferential treatment
 for purposes of trade statistics and issuances of
certificate of origin
 for the application of labeling and marking
requirements
 for public procurement
 for process patent
Types of ROO
preferential - set of agreed rules by Free Trade Area
(FTA) partners to determine whether goods traded
between the parties shall be imposed preferential duty
or not.
Non preferential – rules applied to determine the
country of origin of goods that will be used for
imposition of anti-dumping, countervailing or safeguard
duties, for statistical purposes, marking etc.
ORIGIN of Criteria
Basic criteria to determine the country of origin of
goods
1. wholly Obtained WO – under the ATIGA, the ff
categories of products are considered wholly
obtained in the exporting country:
i. agricultural products harvested there
ii. animals born and raised there
iii. products obtained from animals ii
iv. products obtained from hunting and fishing
v. products obtained of sea fishing and other
products taken from the sea by its vessel
vi. mineral products extracted from its soil or
its sealed
vii. products made on board its factory ships
exclusively from the products referred to v
viii. used articles collected there fit only for the
recovery of raw materials
ix. waste and scrap resulting from
manufacturing operation conducted there
x. products obtained there exclusively from
the products specifies in i to ix
2. substantial transformation – products
manufactured from exporting country wholly or
partly from imported materials or components,
including materials of undetermined or of
unknown origin, are considered as
ORIGINATING in that country if these materials
have undergone sufficient working or
processing
3 major rules
 Value added rule
computation of RVC
> indirect method – computing the
percentage value of non-originating
materials. The value must be equal to or
less than (1-the VA agreed)
𝐹𝑂𝐵−𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑛𝑜𝑛−𝑜𝑟𝑔𝑖𝑛𝑎𝑡𝑖𝑛𝑔 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠
RVC = 𝐹𝑂𝐵
𝑥 100%
 Change in tariff classification – under
this criterion, imported materials, parts
or components that are non-originating
must be undergo sufficient working or
processing
- the FINAL product obtained must be
classified under an HS code that is
different from the HS code classification
of non-originating materials, parts or
components used.
Levels: CC- change in chapter > product is made from
materials classifiable under a different chapter
CC- the HS classification of the non-originating input
materials is different at the first 2 digit level chapter vis-
à-vis final product classification EXAMPLE: input marble
block chap25 to final product original marble statue
chap97
CTH- change in tariff heading > product is made
from materials classifiable under a different heading
CTH- the HS classification of the non-originating input
materials is different at the first 4 digit level heading vis-
à-vis final product classification EXAMPLE: input live
Bluefin tunas heading 03.01 to final product chilled tuna
heading 03.02
CTSH- change in tariff subhdg > product is made
from materials classifiable under a different subheading
CTSH-- the HS classification of the non-originating input
materials is different at the first 6 digit level subheading
vis-à-vis final product classification EXAMPLE: input
fresh potatoes 0710.10.00 to final product potato flour
1105.10.00
 specific process rule – this criterion
requires the product to undergo certain
manufacturing operations in the
exporting country (chemical reaction
rule)
- it may however require or prohibit the
use of certain inputs and/or the use of
certain process in the production of the
good. (e.g RVC 40 or CTH, except from
4809 (4816.90)
Product specific Rules PSR - the product specific rule
applies to goods of a specific tariff classification
- the product specific rules specifies which condition/s a
good must satisfy in order to be considered as an
originating good e.g:
-changes in tariff classification CTC and/or Regional
Value Content RVC
De Minimis – an FTA may incorporate a de minimis
provision that allows a good to qualify as an originating
good provided that the total value of all non originating
materials which do not satisfy the change in tariff
classification requirement does not exceed a set
percentage (usually ranging from 7% to 15%) of the
free-on-board value of the final good.
Minimal Operations
1. Generalized System of Preferences GSP – form a
2. ASEAN Free Trade Area AFTA – form d
3. ASEAN-CHINA Free Trade Area – form e
4. ASEAN-KOREA Free Trade Area – form AK
5. RP-JAPAN Economic Partnership Agreement –
form JP
6. ASEAN-JAPAN Comprehensive Economic
Partnership – Form AJ
7. ASEAN-AUSTRALIA-NEWZEALAND Free Trade
Area – form AANZ
8. ASEAN-INDIA Free Trade Area – form AI

Regardless of criterion used to confer origin, the b. Without preferential treatment:

following are examples of operation/s considered to be
insufficient working or processing that does not confer CO for General Merchandise white C.o
originating status to a product:
a. operations to ensure the preservation of
products in good condition during transport and
storage (drying,chilling,adding salt, etc)
b. simple operations consisting of sifting, sorting,
classifying or matching, washing, painting or
cutting up;
c. i. changes of packing and breaking up and
assembling of consignment, ii simple slicing,
cutting, and repacking or placing in bottle,
flasks, bags, boxes and all other simple packing
operations;
d. the affixing of marks, labels or other like
distinguishing signs on products or their
packaging
e. simple mixing of products
f. simple assembly of parts of products to
constitute a complete product
g. a combination of two or more operations
specified in a to f
h. testing and calibration
i. slaughter of animals
for textile materials:
j. simple combining operation, cutting to length
or width and hemming, stitching
k. finishing operations of yarn and fabrics, or other
textile articles
l. dyeing or printing of fabrics and yarn
Certificate of origin
Declaration of exporter, certified by the issuing
authority (BOC in the case of a PH exporter), that the
exported product complies with the origin requirement
as specifies under a bilateral, regional, or multilateral
trading arrangement.
a. With preferential treatment: