THE ASEAN HARMONIZED TARIFF NOMENCLATURE

1. The ASEAN Harmonized Tariff Nomenclature (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. The AHTN is based on the Harmonized Commodity Description
and Coding System (Harmonized System or HS), a 6-digit multipurpose internatio na l
product nomenclature developed by 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.

2. 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 purposes1 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.
3. 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.

4. 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 implemented the 2012 version
of the AHTN.

5. However, the AHTN needs to be amended to align it with the 2017 amendments to the HS
adopted by the WCO (Annex A). AMSs also agreed to amend the AHTN to address the
requirements of members (Annex B).

6. The Philippines is required to implement the latest amendments to the AHTN in accordance
with Article 4 (Obligations of Member States) of the AHTN Protocol, and as a Contracting
Party to the International Harmonized System Convention.

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

Tariff Commission / July 2017

7. AMSs agreed to implement AHTN 2017 by 1 January 2017, in line with the date of entry
into force of HS 2017, subject to the member’s domestic approval process.

8. Executive Order (EO) 688 (s. 1981) entitled “Aligning the Tariff Nomenclature and the
General Rules of Classification Provided for Under Sections 104 and 203 of Presidential
Decree No. 1464 in accordance with the Customs Cooperation Council Nomenclature”
mandates the Tariff Commission to prepare a draft of the Philippine tariff nomenclature,
currently provided for under Section 1611 of the Customs Modernization and Tariff Act
(CMTA), in accordance with the Customs Cooperation Council Nomenclature (CCCN),
provided that the existing tariff rates shall be retained. The draft of the pertinent parts of
the tariff nomenclature incorporating such revisions shall become effective 30 days upon
approval and issuance by the NEDA.

9. The updating of the nomenclature from AHTN 2012 to AHTN 2017 DOES NOT involve
any modification in tariff rates, whether Most Favoured Nation (MFN) or preferential.

10. At its meeting on 27 June 2017, the NEDA Board approved the adoption of the 2017 version
of the AHTN. Pursuant to the provisions of EO 688 (s.1981), AHTN 2017 shall be
implemented starting 28 July 2017.

Tariff Commission / July 2017

 ANNEX A

Amendments to the Harmonized System for 2017

The changes in the HS which are for implementation in 2017 involve a total of 233 sets
of amendments covering the following:

• Environmental and social issues of global concern - majority of these changes to the
HS were broached by the Food and Agriculture Organization (FAO) of the United
Nations

• Further enhance the coverage of species and product forms of fish and fishery products
which need to be monitored for food security purposes and for better manageme nt
of resources

• Amendment for forestry products - aims to enhance the coverage of wood species in
order to get a better picture of trade patterns, including endangered species

• Identification of: specific chemicals controlled under the Chemical Weapons

Convention (CWC), certain hazardous chemicals controlled under the Rotterdam
Convention, and certain persistent organic pollutants (POPs) controlled under the
Stockholm Convention; several categories of products that are used as antimalar ia l
commodities; introduction of new subheadings for the monitoring and control of
pharmaceutical preparations pre-precursor for drugs

• Due to changes in international trade patterns, adapting the HS to current trade

practices, and advances in technology, certain important products were merged /
separately identified in either existing or new subheadings or regrouped in a new
heading

• Editorial amendments / clarification of texts to ensure uniform application of the

nomenclature

Of the 233 sets of amendments, 85 relate to the agricultural sector; 45 to the chemical
sector; 13 to the wood sector; 15 to the textile sector; 6 to the base metal sector; 25 to the
machinery sector; 18 to the transport sector; and an additional 26 that apply to a variety of
sectors.

The 2017 amendments to the HS Nomenclature will enter into force on 01 January
2017.

Tariff Commission / July 2017

 ANNEX B

Review of AHTN 2012/1: Objectives

According to Article 3 (Structure of the AHTN) of the Protocol Governing the

Implementation of the ASEAN Harmonized Tariff Nomenclature, the AHTN shall be an 8-digit
nomenclature consisting of the latest version of the HS of the WCO and the amendments
thereto, with the addition of seventh and eighth digits and commodity descriptions for tariff
purposes as ASEAN subheadings.

The objectives of the review of the review were:

1. Update the AHTN 2012/1 through incorporation of HS amendments adopted by the

Customs Cooperation Council on 27 June 2014 in the AHTN 2017;

2. Create a nomenclature which conforms to international standards, which is a model

of technical excellence, and which reflects the changing patterns of internatio na l
trade and technology;

3. Establish a tariff nomenclature aligned to international best practices while

accommodating requirements and needs of the ASEAN Member States pursuant to a
uniform tariff classification for a single market and single production base;

4. Enhance transparency in the classification process for goods within the region;

5. To extend the application of AHTN to extra-ASEAN trade as mandated in Article 8

of the ASEAN Framework Agreement for the Integration of Priority Sectors;

6. Simplify the AHTN on the basis of international standards, particularly those of the
HS for the harmonization of the tariff nomenclatures;

7. Review the technical references of the AHTN such as the Supplementar y

Explanatory Notes towards a uniform tariff classification to facilitate trade and
business; and

8. Provide a forum for the exchange of technical opinions on tariff classification matters.

ASEAN Member States endeavor to implement AHTN 2017 by 01 January 2017, in

line with the date of entry into force of HS 2017, subject to the individual member’s domestic
approval processes.

Tariff Commission / July 2017