BRIEF INTRODUCTION TO THE HARMONIZED SYSTEM AND VIETNAM’S PARTICIPATION
Introduction and definition of HS code
The Harmonized Commodity Description and Coding System (HS Code) is a universal standard essential for identifying goods transported across international borders This code is mandatory for customs declarations of imported and exported goods, ensuring a uniform method for accurately describing products globally It serves as a common number system for categorizing commercial goods, enabling customs officials worldwide to determine tariffs, taxes, and compile trade statistics The HS Code also empowers businesses to leverage trade data for market research, reduce international trade costs, and facilitate successful export transactions Furthermore, the Harmonized System enhances trade negotiations, promotes administrative reforms, accelerates regional and global integration, improves the quality of goods and services, modernizes customs procedures, and aids in combating smuggling and trade fraud.
The Harmonized System, established and updated every five years by the World Customs Organization (WCO), serves as the foundation for global import and export operations, particularly among trading partners like the United States Between 1976 and 1983, customs associations from 60 founding member countries, alongside 20 international organizations, collaborated to compile and refine prior findings to create this essential system.
The Harmonized System requires a unique 6-digit HS code that follows a specific structure, encompassing 99 chapters divided into 21 sections, which categorize approximately 5,000 commodities Each 6-digit code is segmented into three distinct parts for better classification.
The determination of HS codes for longans and gasoline with an octane rating (RON) between 90 and 97 involves a systematic classification process The first two digits of an HS code identify the chapter, the next two specify the headings, and the final two detail the subheadings, with the initial six digits being consistent globally While HS codes are intended to standardize product classification across countries, variations in customs regulations can lead to discrepancies Different nations may append additional digits for their own classification systems; for example, Vietnam and India utilize 8-digit codes, Japan employs 9-digit codes, while China, the EU, Canada, the US, and Korea use 10-digit codes, and Turkey implements a 12-digit system.
Harmonized System in Vietnam
On 6 March 1998, Vietnam became a member of the Harmonized System by president th
No 49 / QD - CTN in the year of 1998 And on 1 January 2000, Vietnam approved the st Convention.
The ASEAN Harmonized Tariff Nomenclature is the sole source of Vietnam's eight-digit
HS nomenclature, which is used to classify tariffs (AHTN) Both Vietnamese and English are used for tariff nomenclature in Vietnam.
Vietnam's nomenclature is divided into 97 chapters and 21 sections (in which chapter 77 is used in the possible future).
In Vietnam, customs declarations utilize the HS code specified in the latest version of the country's Nomenclature of Exports and Imports.
The HS code in Vietnam consists of eight digits, where the first two digits represent the chapter classification of the goods The subsequent two digits denote the headings within that chapter, while the fifth and sixth digits specify the subheadings Lastly, the final two digits provide a detailed categorization within Vietnam's export and import nomenclature.
Determining the appropriate HS code for longans and gasoline with a Research Octane Number (RON) between 90 and 97 is crucial for compliance and trade purposes Longans, a tropical fruit, and gasoline variants in this RON range have specific classifications that must be adhered to for accurate import and export documentation Understanding the nuances of these codes ensures proper tariff application and regulatory adherence, facilitating smoother transactions in international markets Proper classification not only aids in legal compliance but also enhances supply chain efficiency and market access for businesses dealing with these products.
Figure 1: Structure of an eight digits HS code
HS convention that VN participates in
The International Convention on the Harmonized Commodity Description and Coding System controlled The Harmonized System It was approved in June 1983 and began to take effect on January 1 st ,1988.
The Harmonized System (HS) Convention aims to standardize the description, classification, and coding of goods in international trade, facilitating trade and information exchange It serves as a vital tool for collecting customs duties and international trade statistics, widely utilized by governments, international organizations, and the private sector for various purposes, including taxation, trade policies, monitoring restricted goods, verifying rules of origin, setting freight tariffs, analyzing prices, managing quotas, and conducting economic research.
In 1993, Vietnam took part in the HS Convention on July 1 , however, until 6 March st th
In 1998, Decision No 49/QD-CTN was issued by the President of Vietnam, officially recognizing the HS Convention Consequently, the HS Convention took effect in Vietnam on January 1, 2000, and currently applies to substances that were introduced in the years 1992, 1996, and 2007.
Review the six GIR applications
General Interpretative Rules (GIR) are a set of six classification rules These regulations ensure that the legality of the Harmonized Commodity Description and Coding System
Determining the HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification and compliance in international trade Accurate HS code assignment ensures that products are categorized correctly, facilitating smoother customs processes and adherence to regulations Understanding the specific requirements for these products can help importers and exporters navigate tariffs and duties effectively, ultimately optimizing their supply chain operations.
The Harmonized System (HS) requires a consistent interpretation for the accurate classification of goods The review of classification rules follows a specific order: Rule 1, followed by Rules 2(a), 2(b), 3(a), 3(b), 3(c), and finally Rule 4 Notably, Rules 5 and 6 are applied independently in the classification process.
Most commodities are categorized under Rule 1 It indicates that the terms of the headings and the relevant section or chapter notes serve as the primary determinants of classification.
( a) refers to the classification of products that are unfinished or incomplete but yet possess the basic qualities of a finished or full product.
According to Rule 3, headings related to a specific material or substance must also extend to mixtures and combinations containing that substance This rule applies when products composed of multiple materials can be categorized under two or more headings.
Rule 3 is accepted when the goods are categorized under two or more headings Rule 3's points (a), (b), and (c) must be applied in that order.
(a) indicates that the heading with the most detailed description should be used.
(b) refers to the categorization of mixtures or sets in light of the substance or element that gives them their fundamental characteristics.
When commodities cannot be classified under categories 3(a) or 3(b), the classification will rely on the last heading in numerical order that holds equal significance for consideration.
Rarely utilized and often associated with emerging technologies, Rule 4 mandates that items should be classified under the category that best aligns with similar goods.
Determining the HS code for longans and gasoline with a Research Octane Number (RON) of 90 and above, but below 97, is crucial for proper classification in trade The HS code system helps in identifying products for customs and trade regulations For longans, the appropriate HS code must reflect their specific characteristics and classification criteria Similarly, gasoline with a RON between 90 and 97 requires accurate coding to ensure compliance with international trade standards Proper HS code determination aids in smooth import and export processes, minimizing potential legal and financial issues.
(a) is acceptable to the grouping of cases and containers that are specifically designed or fitted to hold a single item or group of items.
(b) shows the classification of the packaging materials included with packaged goods Rule 6:
According to Rule 6, the classification of commodities within the subheadings of a heading is determined by the specific conditions outlined in those subheadings, along with any applicable subheading notes.
ANALYSIS OF LONGANS AND GASOLINE “OF RON 90 AND ABOVE,
How to apply GIRs
In this chapter, our group adopted textbook knowledge and the instructor's class lectures to determine the HS code of exported fruits, namely longans, and goods under HS code
To classify goods, we systematically employed theories grounded in the General Interpretative Rules (GIR) The accompanying diagram illustrates the precise process of determining the HS code by adhering to the six rules we utilized, while any unused rules are disregarded by default.
Determining the appropriate HS code for longans and gasoline with an octane rating (RON) of 90 and above, but below RON 97, is essential for accurate classification and compliance in international trade Understanding the specific HS codes helps in navigating tariffs and regulations effectively It is crucial for businesses to ensure they are using the correct codes to avoid potential penalties and streamline their import/export processes Accurate HS code determination supports better inventory management and enhances overall supply chain efficiency.
Figure 2: Diagram of applying GIRs to determine HS code
Understanding the nature of the goods is essential, as the rules must be applied sequentially from rule 1 to rule 5 to accurately determine the first four digits of the 8-digit code.
When determining the HS code for a commodity, it is essential to follow the sequence of rules, starting with the first four digits If any rules are not satisfied, the next rule will be applied until the first four digits are established, while subsequent rules will be disregarded Rule 6 is mandatory and crucial for accurately determining the HS code, as it dictates the last four digits After completing all eight digits, a decision must be made regarding the selection of the HS code.
The HS code search tool on the Vietnam Customs official website and the Vietnam Import and Export Tariff of 2022 are effective resources for accurately finding and verifying HS codes in compliance with customs regulations.
The determination of the HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is crucial for proper classification and trade compliance Understanding the specific HS code helps in navigating international trade regulations and ensures accurate tariff applications Proper classification of these products not only facilitates smoother customs processes but also aids in market analysis and reporting It is essential for businesses to stay informed about the correct HS codes to avoid potential legal issues and optimize their import/export strategies.
Export Longans
Longan, scientifically known as Dimocarpus longan and commonly referred to as Dragon Eye in Vietnamese, is a tropical and subtropical fruit This fruit is predominantly cultivated in regions such as Vietnam, South China, and Indonesia Although similar to lychee, longans are smaller in size, typically measuring around 3 centimeters.
The longan fruit features a thin, light yellow shell that can be easily peeled by hand Inside, it contains translucent flesh that encases dark black seeds While the seeds are inedible due to their intense bitterness and lack of nutritional value, the fruit itself is enjoyed for its sweet flavor and unique texture.
Hung Yen longans, the most popular variety in Vietnam, are distinguished by their large fruit, thick yellow skin, and exceptional sweetness Originating from Hung Yen province, these longans are covered with bamboo cages by farmers to protect them from birds and bats Unlike other longan varieties, they feature a thick rice and small seeds, making them a unique and sought-after fruit.
Determining the HS code for longans and gasoline with an octane rating (RON) of 90 and above, but below RON 97, is crucial for import and export regulations Accurate classification ensures compliance with international trade standards and facilitates smoother customs procedures Understanding the specific HS codes helps businesses navigate tariffs and duties effectively, promoting better market access This classification is essential for stakeholders in the agricultural and petroleum sectors to optimize their supply chain management and enhance their competitive edge in the global market.
Longans are a nutrient-rich fruit that offers numerous health benefits, including anemia prevention, enhanced cognitive function, and boosted immunity They aid in iron absorption, which is essential for red blood cell production, thereby lowering anemia risk and improving memory and alertness The high vitamin C content in longans strengthens the immune system against common colds, while vitamin B promotes nerve relaxation, alleviating stress and fatigue Additionally, longans can help treat conditions like neurasthenia, insomnia, and depression With their significant potassium content, longans contribute to heart health by stabilizing blood pressure, reducing cholesterol levels, and lowering the risk of cardiovascular diseases.
Vietnamese longans are primarily exported to China and the US, but in the first half of 2022, the export value plummeted to just 550,000 USD, significantly lower than the previous year Exports to China alone were estimated at only 138,000 USD, a stark contrast to 4.3 million USD in 2021 Additionally, strict import regulations imposed by China have created further challenges for Vietnamese longan exporters.
Vietnam's longan exports to international markets, including Australia, the UAE, and the US, have seen a significant decline compared to the previous year In the first half of 2022, exports to the US plummeted to $70,000, reflecting a 70% decrease Similarly, exports to Australia and the UAE fell by 60%, amounting to $150,000 and $68,000, respectively.
The export value of longans has declined in recent years, primarily due to high costs that diminish product competitiveness Vietnamese longans, predominantly thin-skinned varieties, are prone to spoilage during sea transport Consequently, air transportation emerges as the most effective solution to preserve the quality of these fruits during export.
Determining the appropriate HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is crucial for compliance and trade efficiency This classification impacts market competitiveness, as products with improperly assigned codes may face reduced appeal compared to alternatives Proper HS code determination ensures that longans and gasoline are accurately categorized, enhancing their marketability and aligning with international trade regulations.
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Figure 3: The situation of Vietnam's longans export, in the first 6 months of 2022 compared to the same period in 2021 (USD) (hvnclc.vn, 2022)
2.2.2 Analysis of how to determine HS code
The following are the steps required to determine and draw conclusions about the HS code of fresh longans:
Step 1: Type “longans” in the search box
The HS code for this product is currently unknown; however, we have downloaded the 2022 Import and Export Tariff for reference to identify its digits type By using the keyword "Longans," we aim to locate this item within the tariff nomenclature Here is some essential information regarding this product.
The product's full name: longans (fresh)
Produced: Hung Yen province, Viet Nam
Rich nutrition: In 100g longans include 0.03mg of vitamin B1, 0.14mg of vitaminB2, 58mg of vitamin C, 0.9g of protein, 10.9g of carbohydrates, 0.1g of lipids,1.0g of fiber, 21mg of can xi, 0.4mg of iron,
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is crucial for proper classification in international trade Understanding these codes ensures compliance with regulations and facilitates smoother customs processes Accurate HS code classification can impact tariffs, trade agreements, and market access, making it essential for businesses involved in the import and export of these products Properly identifying the appropriate HS codes helps prevent potential legal issues and enhances supply chain efficiency.
After learning some background information, my team moved on to the important second step, which is to use the six GIRs learned to determine its HS code.
Step 2: Determine the HS code for “longans" products by following GIRs Chapter: Apply rule 1: "Notes and Chapter Identifiers"
To determine the first two digits of the HS code, refer to the 2022 import and export nomenclature, which organizes products into chapters based on similarities in type, function, and purpose Each chapter groups related commodities and provides detailed information, identified by a two-digit code ranging from 01 to 99.
After thorough research, we identified relevant information for the keyword "longans." Our findings indicate that longans are categorized under "Chapter 8 - Edible fruits and nuts, peel of citrus fruit or melons," leading us to conclude that the initial two digits are 08.
In this section, the term “pellets” means products that are bound by direct compression or by the addition of a binder in a content not exceeding 3% by weight.
- Chapter 8: Edible fruits and nuts, peel of citrus fruit or melons:
1 This Chapter does not cover nuts or inedible fruit.
2 Chilled fruit and nuts must be classified in the same heading as fresh fruit and nuts.
3 The dried fruits or seeds of this Chapter may be partially rehydrated or treated for the following purposes:
(a) Advanced storage or stabilization (e.g., moderate heat treatment, with sulfur, by the addition of sorbic acid or potassium sorbate),
(b) Improve or maintain their appearance (for example, by adding vegetable oil or small amounts of glucose syrup), provided they retain the character of dried fruit and nuts.
Determining the appropriate HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for accurate classification and compliance in international trade Understanding the specific requirements for these products ensures proper tariff application and regulatory adherence Accurate HS code determination facilitates smoother customs processes and prevents potential delays in shipping It is crucial for businesses to stay informed about the latest regulations and classifications to optimize their import and export strategies.
Figure 4: Import and Export Tariff 2022
Heading: Apply rule 1: "Notes and Chapter Identifiers"
To determine the product heading, identified by the third and fourth digits, we utilize the Import and Export Tariff 2022 and adhere to rule 1 Chapters consist of headings that categorize closely related commodities, defined by double-digit codes These group digits range from 01 to 100, with 100 represented as 00.
Goods under HS 2710
2.3.1 Overview of Gasoline “Of RON 90 and above, but below RON 97”
The group selected HS code 2710, which covers “Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations containing 70% or more of these oils by weight; and waste oils,” for the import section It was determined that Gasoline with an octane rating of RON 90 and above, but below RON 97, is a significant import item Consequently, our group has identified Gasoline “Of RON 90 and above, but below RON 97” as the targeted imported product.
Petroleum is the source of gasoline, a flammable liquid that powers most internal combustion engines The three most popular types of gasoline on the market right now are 92, 95, and biofuel E5.
Gasoline 92, commonly known as A92 or RON 92, features an octane rating of 92 and is characterized by a compression ratio of less than 9.5:1 This fuel is identifiable by its green color and unique odor.
Determining the HS code for longans and gasoline with a Research Octane Number (RON) of 90 and above, but below RON 97, is crucial for accurate classification and compliance with trade regulations This classification impacts tariffs, trade statistics, and import/export processes Understanding the specific HS codes ensures that businesses can navigate international trade efficiently while adhering to legal requirements Proper identification of these products under the correct HS code facilitates smoother transactions and helps avoid potential penalties.
Gasoline 95, also known as A95 or RON 95, has an octane number of 95 and is characterized by a compression ratio exceeding 9.5:1 This fuel is recognized for its earthy yellow color and distinct smell, making it a popular choice for various vehicles.
In the first nine months of 2022, Vietnam saw a significant increase in petroleum imports, totaling over 6.5 million tons valued at $6.8 billion This represents a 22.7% rise in volume and an impressive 131.8% increase in revenue compared to the same period in the previous year.
In September 2022, Vietnam imported 627,652 tons of petrol and oil, valued at over 616 million USD, reflecting increases of 34.8% in volume and 27.8% in value compared to August For the first nine months of the year, the total import reached over 6.5 million tons, amounting to 6.8 billion USD, which represents a 22.7% increase in volume and a significant 131.8% rise in value compared to the same period last year.
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is crucial for proper classification and trade compliance Accurate HS code assignment ensures adherence to international regulations and facilitates smoother customs processes Understanding the specific characteristics and quality standards of longans and gasoline within this octane range aids in their correct categorization, ultimately impacting import/export procedures and market access Properly classifying these products can enhance trade efficiency and compliance with relevant legal frameworks.
In the third quarter of 2022, key traders significantly cut back on imported petrol and oil, leading to a notable decline in import volumes By September 20, 2022, statistics revealed a reduction of approximately 40% in gasoline imports and around 35% in oil imports.
DO oil, compared to the second quarter of 2022
Despite a recent local gasoline shortage at some key traders' gas stations disrupting business activities, petroleum inventories across enterprises remain sufficient to meet domestic demand As of October 8, major petroleum companies report the following inventories: Petrolimex holds approximately 489,000 m3 (including 208,000 m3 of gasoline and 280,000 m3 of oil), Pvoil has about 230,000 m3, Military Petroleum Company has around 19,000 m3, Saigon Petro retains about 11,000 m3, Petimex Dong Thap has approximately 45,000 m3, and Thanh Le has about 60,000 m3.
2.3.2 Analysis how to determine HS code
The technique for determining the HS code for Longans is similar to that used for identifying the HS code for "Gasoline of RON 90 and above, but below RON 97." Among the six rules discussed in class, the third rule is the most applicable for this process Detailed information about the entire procedure is outlined below.
Step 1: Define Chapter Apply rule 1: "Notes and Chapter Identifiers"
Section 5 (mineral products) defines the concepts, and chapter 27 goes into great detail of which our group is looking for We discovered that the product matches the description and makes no specific claims Properly, the first two digits that represent chapter are 27.
Determining the appropriate HS code for longans and gasoline with a Research Octane Number (RON) between 90 and below 97 is essential for compliance with international trade regulations Longans, a tropical fruit, have specific classification requirements, while gasoline within this RON range is vital for various automotive applications Accurate HS code determination ensures proper tariff application and facilitates smoother customs processes, benefiting importers and exporters alike Understanding these classifications can help businesses navigate the complexities of international trade efficiently.
Figure 7: Import and Export Tariff 2022
Relying solely on the section and chapter titles provided a general overview, identifying the chapter number as 27, but it did not meet the criteria for a proper heading Therefore, my team opted to utilize more specific classifications to obtain accurate HS codes, leading us to adopt the next rule for further categorization.
Determining the HS code for longans and gasoline with a Research Octane Number (RON) of 90 and above, but below RON 97, is essential for trade classification and compliance Longans, a tropical fruit, require specific coding for import and export, while gasoline classifications are crucial for regulatory purposes Understanding the nuances of these HS codes aids businesses in navigating international trade regulations effectively Proper classification ensures adherence to legal standards and facilitates smoother transactions in the global market.
Step 2: Define Heading Apply rule 2:
Rule 2a: Incomplete or unfinised articles – Articles presented unassembled or disassembled
Rule 2a is intended for classifying incomplete products and should be excluded from the code determination process Gasoline with a RON of 90 and above, but below RON 97, is ready for commercial sale to vehicles According to Section (III) of rule 2a, this rule typically does not apply to goods classified within sections I to VI Therefore, products belonging to section V cannot utilize rule 2a for identification.
Rule 2b: Mixtures and combinations of materials or substance
Evaluate
Determining HS codes for the specified items involves applying the six General Interpretative Rules (GIRs) effectively Our group's methodology for identifying HS codes is clearly outlined, leveraging the expertise and knowledge of our members to ensure accuracy and professionalism in the process.
Fresh longans are a distinct fruit product, which simplifies the determination of HS codes due to their clear labeling that highlights their fresh nature and unique characteristics.
Determining the HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification The initial four digits, which represent the chapter and heading, can be easily identified by applying the first rule of HS code determination This process ensures accurate categorization and compliance with international trade regulations.
The gasoline product classified as "RON 90 and above, but below RON 97" is complex due to its technical characteristics and composition of various substances To accurately determine its HS code, it is essential to understand its physicochemical properties and the percentage of its components, including their origins.
Our team's report revealed that most import-export personnel rely primarily on the import-export tariff and trusted online resources, such as the General Department of Vietnam Customs, to determine HS codes for specific items While this method may seem disorganized and potentially inaccurate, it effectively saves time Their extensive practical experience enables these professionals to minimize errors in the process.
FINDINGS
Advantages
To effectively determine HS codes, the authors conduct thorough research in the customs sector, which enhances their understanding and clarity in identifying the correct codes for selected products.
The insights and materials provided by PhD Tran Nguyen Chat, along with reliable online references, have enabled the authors to understand the process of determining HS codes for selected products By applying the six General Interpretative Rules (GIRs), the authors systematically established the appropriate HS code Utilizing the 2022 import and export tariff nomenclature, they effectively identified the chapter, sub-heading, heading, and national tariff for the products This document has proven invaluable, as it offers essential information for accurate classification.
Determining the correct HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for compliance and trade accuracy With the rapid advancement of the internet, resources such as customs.gov.vn provide valuable tools for reviewing and verifying these codes, ensuring precise classification and adherence to regulations.
The authors gained a comprehensive understanding of customs procedures through their collective efforts and background research, which was essential for the report's success Despite initial knowledge gaps and unfamiliarity, the team members supported each other throughout the learning process, ultimately building a strong foundation in the subject Their collaboration, coupled with effective leadership, played a crucial role in achieving the report's objectives and enhancing their confidence in customs procedures.
Disadvantages and common misunderstandings in researching
The authors initially relied solely on theoretical classes and reading, which left them feeling overwhelmed and directionless during practical exercises due to the vast amount of information available.
One of the main challenges we face is sourcing relevant and reliable data, as we need up-to-date statistics and suitable exhibits to enhance the authenticity of our report The absence of comprehensive exporting and importing statistics has significantly consumed our time in the search for appropriate data Furthermore, since the selected products are endemic and regional, much of the documentation is in Vietnamese, complicating translation efforts and leading to difficulties in presenting clear data.
The report includes an analysis of HS codes for two distinct products, each evaluated separately This approach has made it challenging to compile and integrate the criteria for comparison between the two products.
Determining the appropriate HS code for longans and gasoline with a Research Octane Number (RON) of 90 and above, but below RON 97, is essential for proper classification and compliance in trade Understanding the specific criteria and regulations governing these products can aid in accurate coding, ensuring adherence to international trade standards Proper HS code determination not only facilitates smoother customs processes but also helps in identifying applicable tariffs and duties, ultimately benefiting importers and exporters alike.
Our team encountered misunderstandings related to the sub-heading and tariff lines for Longans and "Gasoline of RON 90 and above, but below RON 97" due to insufficient information about the precise sorting procedures and ambiguities in the 6 GIRs Consequently, our analysis of the HS codes for these products was incorrect and did not align with the government's predetermined classifications To rectify this, we invested significant time in additional research and sought guidance from our instructors Despite the thorough explanations provided by Mrs Chat, uncertainties remain due to a lack of practical experience.
Hung Yen longans
Hung Yen longans, the most popular variety in Vietnam, are renowned for their large fruits and thick yellow skin, setting them apart from other longan types Farmers protect these sweet, thick-fleshed fruits with bamboo cages to deter birds and bats Characterized by their small seeds, Hung Yen longans offer a delightful sweetness that makes them a favorite among consumers.
Determining the appropriate HS code for longans and gasoline with a Research Octane Number (RON) between 90 and 97 is essential for accurate classification and compliance with trade regulations Longans, a tropical fruit, require specific coding to facilitate international trade, while gasoline classifications are crucial for regulatory purposes and taxation Understanding the nuances of HS code determination helps businesses navigate import and export processes effectively, ensuring adherence to legal standards and optimizing supply chain operations Proper classification not only aids in avoiding penalties but also enhances market access for both longans and gasoline products.
Longans are a nutrient-rich fruit that offers numerous health benefits, including the prevention of anemia and enhancement of cognitive function They aid in iron absorption, which is essential for red blood cell production, thereby reducing anemia risk and improving memory and alertness With a high vitamin C content, longans bolster the immune system against common colds, while their vitamin B content promotes nerve relaxation, alleviating stress and fatigue Additionally, longans can help treat conditions like neurasthenia, insomnia, and depression Their potassium content supports heart health by stabilizing blood pressure, lowering cholesterol levels, and reducing the risk of cardiovascular diseases.
Vietnamese longans are primarily exported to China and the US, but the export value significantly declined in the first half of 2022, totaling only $550,000 compared to the previous year's figures The main market, China, saw exports plummet to $138,000 from $4.3 million in 2021 Additionally, stringent regulations imposed by China on imported fresh fruit have created further challenges for Vietnam's longan exports.
Vietnam's longan exports to international markets, including Australia, the UAE, and the US, have significantly declined compared to the previous year In the first half of 2022, exports to the US dropped to $70,000, marking a 70% decrease Similarly, exports to Australia and the UAE fell by 60%, totaling $150,000 and $68,000 respectively (hvnclc.vn, 2022).
In recent years, the export value of longans has declined, primarily due to high costs that diminish product competitiveness Vietnamese longans, predominantly thin-skinned varieties, face challenges with perishability when shipped by sea Consequently, air transportation emerges as the optimal solution to preserve the quality of these fruits during export.
The determination of HS codes for longans and gasoline with an octane rating (RON) of 90 and above, but below RON 97, is crucial for trade compliance and market competitiveness Accurate classification not only ensures adherence to regulations but also enhances the attractiveness of these products in the marketplace As competition intensifies, proper HS code identification can mitigate the risk of becoming less appealing compared to substitutes, thereby maintaining market relevance.
January February March April May June 0
Figure 3: The situation of Vietnam's longans export, in the first 6 months of 2022 compared to the same period in 2021 (USD) (hvnclc.vn, 2022)
2.2.2 Analysis of how to determine HS code
The following are the steps required to determine and draw conclusions about the HS code of fresh longans:
Step 1: Type “longans” in the search box
The HS code for this product is currently unknown, prompting us to reference the 2022 Import and Export Tariff for identification We will focus on the keyword "Longans" to locate this item within the tariff nomenclature Here is some essential information regarding this product.
The product's full name: longans (fresh)
Produced: Hung Yen province, Viet Nam
Rich nutrition: In 100g longans include 0.03mg of vitamin B1, 0.14mg of vitaminB2, 58mg of vitamin C, 0.9g of protein, 10.9g of carbohydrates, 0.1g of lipids,1.0g of fiber, 21mg of can xi, 0.4mg of iron,
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification and compliance in international trade Accurate HS code assignment facilitates effective tariff application and ensures adherence to regulatory standards Understanding the specific characteristics of longans and the classification of gasoline based on octane ratings is crucial for importers and exporters to navigate the complexities of global markets Properly identifying these products under the correct HS codes can optimize supply chain operations and enhance trade efficiency.
After learning some background information, my team moved on to the important second step, which is to use the six GIRs learned to determine its HS code.
Step 2: Determine the HS code for “longans" products by following GIRs Chapter: Apply rule 1: "Notes and Chapter Identifiers"
To identify the HS code for a product, start by determining the first two digits, which represent the Chapter of the import and export nomenclature 2022 This nomenclature organizes commodities into Chapters based on their type, function, composition, and purpose, allowing for a more detailed classification of related products Each Chapter is assigned a two-digit code ranging from 01 to 99, facilitating the categorization of specific commodities.
After thorough research, we identified a relevant outcome for the keyword "longans." Our team found that longans align with the criteria outlined in "Chapter 8 - Edible fruits and nuts, peel of citrus fruit or melons," leading us to conclude that the initial two digits are 08.
In this section, the term “pellets” means products that are bound by direct compression or by the addition of a binder in a content not exceeding 3% by weight.
- Chapter 8: Edible fruits and nuts, peel of citrus fruit or melons:
1 This Chapter does not cover nuts or inedible fruit.
2 Chilled fruit and nuts must be classified in the same heading as fresh fruit and nuts.
3 The dried fruits or seeds of this Chapter may be partially rehydrated or treated for the following purposes:
(a) Advanced storage or stabilization (e.g., moderate heat treatment, with sulfur, by the addition of sorbic acid or potassium sorbate),
(b) Improve or maintain their appearance (for example, by adding vegetable oil or small amounts of glucose syrup), provided they retain the character of dried fruit and nuts.
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is crucial for international trade compliance Accurate classification ensures adherence to tariff regulations and facilitates smoother import and export processes Understanding the specific HS codes helps businesses navigate customs requirements effectively, thereby optimizing supply chain operations and minimizing potential legal issues It is essential for stakeholders to stay informed about these classifications to enhance trade efficiency and ensure proper documentation.
Figure 4: Import and Export Tariff 2022
Heading: Apply rule 1: "Notes and Chapter Identifiers"
To determine the product heading, which consists of the third and fourth digits, we utilize the Import and Export Tariff 2022 in accordance with rule 1 Each chapter comprises headings that categorize closely related commodities, defined by double-digit numbers ranging from 01 to 100, with 100 represented as 00.
The vegetarian products category features 14 headings, with heading 10, "other fruit, fresh," identified as the most suitable due to its emphasis on freshness After reviewing the captions sequentially, it is clear that heading 08.10, which describes fresh fruit, aligns perfectly with the export of longans.
As we already identified the chapter and heading (the first 4 digits) of the product, our group will ignore rules 3, 4, 5, and go straight to rule 6.
Sub-heading and tariff line: Apply rule 6: “Explanatory notes"
Determining the HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for accurate classification and compliance in international trade Understanding the specific codes helps in identifying the appropriate tariff rates and regulations applicable to these products Longans, a tropical fruit, and gasoline are both significant commodities that require precise categorization for import and export processes Proper HS code determination ensures smoother transactions and adherence to customs requirements, ultimately facilitating trade efficiency.
Figure 5: Import and Export Tariff 2022
RON 95 and RON 92
In the first three quarters of 2022, Vietnam's petroleum imports exceeded 6.5 million tons, amounting to a value of $6.8 billion This marks a significant increase of 22.7% in volume and an impressive 131.8% rise in revenue compared to the same period in the previous year.
In September 2022, Vietnam imported 627,652 tons of petrol and oil, valued at over 616 million USD, reflecting a 34.8% increase in volume and a 27.8% rise in value compared to August For the first nine months of the year, total imports reached over 6.5 million tons, amounting to 6.8 billion USD, marking a 22.7% growth in volume and a significant 131.8% increase in value compared to the same period last year.
Determining the HS code for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification and trade compliance This classification impacts import duties, regulatory requirements, and market access Understanding the nuances of these codes helps businesses navigate international trade efficiently, ensuring adherence to legal standards while optimizing supply chain operations Accurate HS code determination is crucial for stakeholders in the agricultural and petroleum sectors, facilitating smoother transactions and reducing the risk of penalties.
In the third quarter of 2022, key traders significantly decreased their imports of petrol and oil, resulting in a notable decline in import volumes By September 20, 2022, statistics indicated a reduction of approximately 40% for gasoline and around 35% for other oil products.
DO oil, compared to the second quarter of 2022
Despite a recent local gasoline shortage at some gas stations linked to key traders' distribution systems, business activities were not significantly disrupted, as petroleum inventories remained sufficient to meet domestic demand As of October 8, major petroleum companies reported their inventories: Petrolimex held approximately 489,000 m³ (including 208,000 m³ of gasoline and 280,000 m³ of oil), Pvoil had about 230,000 m³, the Military Petroleum Company maintained around 19,000 m³, Saigon Petro had roughly 11,000 m³, Petimex Dong Thap possessed about 45,000 m³, and Thanh Le had approximately 60,000 m³ in stock.
2.3.2 Analysis how to determine HS code
The technique for determining the HS code for Longans is similarly applied to identify the HS code for "Gasoline of RON 90 and above, but below RON 97." Among the six rules discussed in class, the third rule is the most suitable for this purpose, and a detailed description of the entire process follows below.
Step 1: Define Chapter Apply rule 1: "Notes and Chapter Identifiers"
Section 5 outlines the definitions of mineral products, while Chapter 27 provides an in-depth exploration of these concepts Our group has identified that the product aligns with this description and does not make any specific claims Notably, the initial two digits representing the chapter are 27.
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification in international trade Accurate HS code assignment facilitates compliance with customs regulations and ensures the correct application of tariffs Understanding the specific criteria for these products can streamline import and export processes, ultimately benefiting businesses involved in the trade of longans and gasoline.
Figure 7: Import and Export Tariff 2022
Relying solely on the chapter title allowed my team to identify it as chapter 27, but it did not meet the criteria for a proper heading Therefore, we needed to pursue more specific groupings to obtain accurate HS codes, prompting us to advance to the next rule.
The determination of HS codes for longans and gasoline with an octane rating of RON 90 and above, but below RON 97, is essential for proper classification and compliance in international trade Accurate HS coding facilitates smoother customs procedures and ensures adherence to regulatory standards Understanding the specific criteria for these products can help businesses optimize their import and export processes, ultimately leading to better market access and competitive advantage.
Step 2: Define Heading Apply rule 2:
Rule 2a: Incomplete or unfinised articles – Articles presented unassembled or disassembled
Rule 2a is excluded from the code determination process for incomplete products, as gasoline with a RON of 90 to below 97 is commercially available for vehicles According to Section (III) of rule 2a, this rule typically does not apply to goods within sections I to VI Therefore, products classified under section V cannot utilize rule 2a for identification.
Rule 2b: Mixtures and combinations of materials or substance
The rule of 2 and 3, particularly noted in the footnote to rule 2b, emphasizes that mixtures and compounds made of distinct materials must be classified appropriately Rule 2b specifies that a title must refer to a specific material or substance that is a mixture of that substance with another Consequently, our product, gasoline classified as "RON 90 and above, but below RON 97," does not meet these classification requirements due to its complex composition Therefore, applying rule number 3 is justified, given the diverse range of ingredients involved.
Apply rule 3: items appear to be divided into several categories at first glance Rule 3a: Goods are classified into groups based on specific descriptions, with the most basic characteristics
Gasoline classified as "RON 90 and above, but below RON 97" is a complex mixture of various components, making standard classification ineffective According to Rule 3a, specific descriptions should take precedence over general ones However, since the constituents of this gasoline create a cohesive product rather than a mere combination of distinct substances, it cannot be categorized using this preference order.
Determining the HS code for longans and gasoline with an octane rating (RON) of 90 and above, but below RON 97, is crucial for accurate classification and trade compliance This classification impacts import/export regulations, tariffs, and market accessibility Proper identification of these products ensures adherence to international trade standards and facilitates smoother transactions in the global market Understanding the specific HS codes for these items can help businesses optimize their supply chain and avoid potential legal issues related to misclassification.
Rule 3b states that mixed goods composed of various materials or components, including retail sets, are classified according to the primary materials or components that define their essential characteristics.