Amendments to the nomenclature of the Harmonized System of Description and Coding of Goods are periodic reviews that are carried out by the World Customs Organization and are carried out for several purposes; among them, to achieve the best adaptation and adjustment of the codification and tariff of goods to the reality of commercialization, both at international and regional level. And within Argentina, for industrial protection and trade promotion.
Each WTO member country must implement changes to its own nomenclature through its legislation.
A thorough study of the nomenclature is essential, since thanks to such action, agreements on rules of origin can be established, tariffs and subsidies can be established, resulting in a regulatory and legislative framework that arises from it.
Argentina, furthermore, as a member of the Southern Common Market (MERCOSUR), must abide by and also implement all changes that may occur in the opening of classifications, but at a regional level, agreed upon by the four Member States.
This is why this entire study takes a long time, noting that the international review that began in 2021 sees its final result with Decree No. 557 of the Executive Branch of the Nation, published on October 26, 2023.
Decree 557 / 2023
This regulation (Decree 557) consists of 12 Annexes. The first Annex is the NCM or common nomenclature of MERCOSUR with its modifications reflected in the AEC (Common External Tariff), or target tariff for collecting import duties on goods from third countries that are not members of MERCOSUR. These changes at the regional level are orderly, eliminating openings and opening other goods that had a direct relationship and required this new numerical order. The compilation of Resolutions of the Common Market Group (GMC) is found in the last Annex of the Decree.
However, in the first Annexes, we have a series of compilations of tariff changes and tariff updates that were individualized by headings, and which in turn update regulations in parallel with the codification modifications.
Thus, it can be seen that in the first Annex we have changes with respect to the AEC (either due to exceptions applied by Argentina, or due to a decrease or increase). In this case, the items are varied and the most significant changes occurred in some vaccines, in some electrical elements and in vehicles such as motorcycles.
Annexes III and IV, for their part, highlight the special treatment for capital goods (BK) and information and telecommunications goods (BIT). These goods, due to production promotion or lack of development in the local industry, benefit from lower percentages of import duties than the AEC.
However, the opposite has occurred with Annex V, which contains a list of goods that have suffered a temporary increase in tariffs (to the maximum allowed by the WTO: 35%). The items covered here are varied, but we can name as notable accessories for daily electronic use: headphones, speakers, chargers; also whiskeys, personal hygiene products, some construction elements, toys, furniture and decoration.
It also has a section for the dairy industry, peaches - whose tariff underwent a temporary increase - and the establishment of a 20% tariff for the sugar sector, according to article 9.
Annex X, which increases the tariff to a maximum percentage of 35% on certain toys detailed in Common Market Council Decision No. 28/15, such as tricycles and strollers, among others, deserves attention.
Used goods
The following three Annexes replace the Annexes of MEOPS Resolution 909/1994. This previous resolution had created the certification of import of used goods and established lists of goods prohibited from entry in that condition and differential tariff for those permitted. Although these lists had already been updated by Decree 541/2019, it is now, with the opening of some sub-headings in the MERCOSUR nomenclature and some changes at the international level, that it has been necessary to issue the new lists that formally comply with the replacement of these changed tariff items, and incorporate some other merchandise, namely: industrial robots, machines for working tubes, isostatic presses, additive manufacturing machines, among others in list 1 added to the requirement to process said certificate before the Import Directorate. Biological safety enclosures, rubber moulds, parts of machines for additive manufacturing incorporated in list 1, display modules, electronic waste and scrap, instruments and devices for demonstrations, were incorporated into the prohibition of entry in a used state without any type of exception by list 2. And by means of list 3 the changes were only clarifying and opening sub-headings.
Exports
Exports have not been left out of this Decree. Annex XI establishes the list of exceptions to export refunds. In it we find merchandise from the agricultural and fishing sectors and packaged products, some of which are finished products from the production of tanning material. The tariffs are around 1.25 and 2.5, for the most part.
In the same matter, Article 11 establishes that the additional rebates previously established in Decree 1341/16 remain in force. (0.5% additional for products registered under the ecological, biological and organic condition regime, the same additional percentage for those that comply with the “Argentine Foods, a natural choice” program and the same regime for products with a designation of origin, Laws 25127, 26967 and 25380)
Highs, lows and modifications
Any change in any circuit in operation represents an operational conflict. This is why during the first week of implementation, a lack of predictability of errors and failures in the system were observed.
The SIM (Maria Computer System) works through tables that use so-called database validation constants.
Each data validation is carried out daily in order to be as up-to-date as possible.
The implementation of the radical change in the structure of tariff items brought with it impossibilities of validating import clearances and shipping permits.
These problems were not resolved quickly, since in many cases it was necessary to reload SIRAS in order to be able to move forward with operations; in other cases, it was necessary to transfer cargo arriving at the port to bonded warehouses for deconsolidation of the container and subsequent request for repackaging and re-assembly of packages, which in many cases was not a viable operation.
After more than a week of a complex situation for foreign trade operators, through the forced update system of tables, it was allowed to replace the tariff items, now old, with the new ones (manually) in order to continue with the officializations in the system, but such procedure, apparently, was limited only to changes at a regional level, not in the international opening of the codification.
Conclusion
Computer limitations seem to have prevented the “updating” of nomenclatures, generating difficulties that have led to complaints from the Chambers, based on events that occurred in customs and that operationally hindered the fluidity of trade. Such complaints have been due to the change of “rules of the game” from one moment to the next, moving away from a fundamental element in international trade: “predictability”.
It should not be forgotten that any action aimed at producing an import results in a cost analysis, which is supported by the legal security that must be provided in the process of tracing the entry of goods into the customs territory. Otherwise, extra costs are generated that, in most cases, operations cannot bear, with the inevitable consequence that these end up being a surcharge on the final price for consumption.
These aspects can be avoided by taking appropriate actions that tend to schedule the relevant modifications within a time frame that prevents operators from finding uncertainty. Especially considering that since 2021 the amendment exists for the entire harmonized system and the application protocol took more than a year to be introduced, and then they were implemented in Argentina from one day to the next, without anticipating these effects that had to find a quick solution after the events occurred.
Graduate in Foreign Trade (Universidad de la Marina Mercante), customs broker and customs transport agent. She works as a professor at the University of Belgrano and CAECE.