Text 5.1. A brief history of the harmonized system

Commodities and services are key elements which international trade can't easily dispense with. There has always been a need to classify goods. The right classification of goods plays an essential role for trade statistics to develop a Customs policy of any country.

The first «goods classification systems» were very simple in nature, introducing an alphabetical list of goods on which a particular tax or toll (rate of duty) was imposed or which were exempt from such levies. Later, it was realized that a goods classification system based on criteria other than the same tax treatment would be advantageous, and Customs tariffs based on the nature of the goods were developed. Within this classification system particular products were identified for differential tax or other treatment.

The level and importance of international trade increased and everyone concerned with international trade became aware of the difficulties caused by differences in national Customs tariffs.

The efforts to produce a common world nomenclature designed to facilitate international trade spanned more than a century. They had led to the introduction of nomenclatures that at times had been used for both tariff and statistical purposes.

In 1831 Belgium presented its foreign trade statistics under three general headings: raw materials, produced and manufactured articles. In 1885 the International Institute of Statistics was founded to carry on the work of the International Statistical Congresses held at the Hague (1869), St. Petersburg (1872) and Budapest (1876). However, the first uniform statistical nomenclature to have been approved by international Convention was adopted at the Second International Conference on Commercial Statistics, held in Brussels (1913).

The idea of a common framework for Customs tariffs was put forward at the World Economic Conference (1927) and a draft Customs Nomenclature (the first version of which was completed in 1931 and revised in 1937) was prepared. This Nomenclature, which came to be known as «The Geneva Nomenclature», comprised 991 headings, arranged in 86 chapters which were themselves grouped into 21 sections.

The drive for economic reconstruction and the desire for greater freedom of trade which characterized the post-war period created favourable conditions for the standardization of Customs tariffs. The

work done by the European Customs Union (from 1948 onwards) was based on the Geneva Nomenclature, which was the only standard framework of its kind available at that time. Nevertheless, considerable amendments were made to the Geneva text, partly to reflect technical progress and partly because of shortcomings revealed by the experience of countries which had already adopted Geneva-type tariffs. It was decided that the headings of the Nomenclature should be established by a Convention. It was thus this 1949 draft which, re-arranged, abridged and simplified, was incorporated into the Brussels Convention of 15 December 1950 on «Nomenclature for the Classification of Goods in Customs Tariffs», initially known as the «Brussels (Tariff) Nomenclature» (BTN); but in 1974 it was renamed the «Customs Co-operation Council Nomenclature» (CCCN).

In the late 1960s there was a growing awareness amongst all concerned with international trade of the need to rationalize and harmonize trade documentation data and, in particular, to harmonize the designation and coding of countries, units of quality, modes of transport, transport hauling requirements and, not least, commodities. It had been found that a commodity could be designated up to 17 times in the course of a single international transaction. The exploratory studies and preparatory work carried out under the auspices of the CCC resulted in the completion of the «Harmonized Commodity Description and Coding System» and the establishment of a new international Convention for its implementation (1983).

EXERCISES

I. Match the words from the text with their corresponding definitions.

1. toll a. the basic structure, arrangement or system

2. to levy b. any article of commerce

3. nomenclature c. a correction, revision or change

4. framework d. payment, tax

5. amendment e. confirm, agree to

6. draft f. collecting of a tax or another payment

7. commodity g. to vote to accept

8. to adopt h. patronage, protection

9. to approve i. system of naming

10. auspices j. preliminary plan or sketch of writing

II. Find nouns in the text which follow the verbs below.

1. to impose 4. to create 7. to harmonize

2. to facilitate 5. to reveal 8. to designate

3. to adopt 6. to make 9. to carry out

10. to result in

Use the expressions from the exercise above to replace the words in italics in the following sentences.

1. Considerable changes were introduced into the Geneva text.

2. From the earliest times there has been a desire on the part of authorities to apply duties to goods being moved across their territorial boundaries.

3. A common world nomenclature was designed to help the international exchange of goods.

4. Shortcomings of the Geneva-text were revealed by the experience of countries which had already accepted Geneva-type lists of taxes.

5. The drive for economic reconstruction and the desire for greater freedom of trade during the post-war period brought about favourable circumstances for the standardization of Customs tariffs.

6. It had been found that a product could be defined up to 17 times in the course of a simple international transaction.

7. The experience of countries which had already adopted Geneva-type tariffs showed the drawbacks of the Geneva text.

8. The exploratory studies of the CCC brought about the accomplishment of the Harmonized System.

9. There was a growing awareness of the need to rationalize and bring into accord trade documentation data.

10. Preparatory work was conducted under the auspices of the CCC.

III. What are the synonyms from the text of the following words? A

1. aim 6. plan

2. established 7. to define, characterise

3. beneficial, convenient 8. to enlarge, grow

4. defects 9. to confirm

5. accessible 10. to disclose

Use the words from the exercise above to translate the following questions. Pay attention to the underlined words.

С какой целью используются номенклатуры?

Кто должен был одобрить первую всеобщую статистическую

номенклатуру?

условия

Когда был подготовлен первый вариант проекта таможенной

Какой документ был в распряжении

таможен-

Европейского

номенклатуры?

Что создало благоприятные

условия

для стандартизации тамо-

женных тарифов?

Когда был основан Международный институт статистики?

было

Кем были обнаружены недостатки Женевского текста номенк-

латуры?

По чему

так важно создать международную систему для

того чт обы классифицировать товары?

9. Какой документ был в распоряжении Европейского таможенного союза как единственная основа для будущего таможенного тарифа?

IV. Complete the following sentences on the left with the participle clauses on the right.

1. Customs tariffs … were developed. a. caused by differences in national Customs tariffs

2. Everyone concerned became aware b. done by the European

of the difficulties ... Customs Union

3. In 1885 the International Institute	c. based	on	the	nature	of
of Statistics was founded to carry on	goods
the work of the International Statistical
Congress ...
4. The	Geneva	Nomenclature	d. revealed by the experience
comprised 991 headings ...		of countries which	had
					already	adopted	Geneva-
					type tariffs.
5. The work ... was based on the	e. carried	out	under	the
Geneva nomenclature.			auspices of the CCC.
6. Considerable	amendments	were	f. held at the Hague in 1869.
made to the Geneva text, partly because
of shortcomings ....
7. There	was a	growing awareness	g. initially	known	as	the
amongst all ... of the need.		«Brussels				(Tariff)
					Nomenclature».
8. This interest arose from a desire on	h. designed	to		facilitate
the part of authorities to impose taxes	international trade
on goods ... .
9. The	exploratory	studies	and	i. arranged in 86 chapters
preparatory work ... resulted in the
completion of the HS.
10. Particular products ... were given	j. being moved within these
in this classification system.		territories.
11. The efforts to produce a common	k. being		identified	for
nomenclature ... spanned more than a	differential	tax		or other
century.					treatment.
12. This 1949 draft was incorporated	l. concerned	with	interna-
into the Brussels convention ....		tional trade.

V. Fill in the gaps with the correct article where necessary.

Later it was realized that ... goods classification system based on criteria other than ... same tax treatment would be advantageous, and ...

Customs tariffs based on the nature of ... goods were developed, particular products being identified for differential tax or other treatment within these classification systems.

Indeed, it had been found that ... commodity could be designated up to 17 times in the course of ... single international transaction. The exploratory studies and preparatory work carried out under ... auspices of ...

CCC resulted in the completion of ... «Harmonized Commodity Description and Coding System» and the establishment of ... new international Convention for its implementation (1983). In 1831 ...

Belgium presented its foreign trade statistics under ... three general headings: ... raw material, produced and manufactured articles. In 1885 the International Institute of Statistics was founded to carry on ... work of the International Statistical Congresses held at ... Hague (1869), ... St. Petersburg (1872) and ... Budapest (1876).

VI. Use the appropriate form of the verbs from the list to complete the sentences (1 – 10). Use each verb only once.

adopt	make	complete
create	found	rename
put forward	develop	carry out
incorporate

1. Customs tariffs based on the nature of the goods …

2. In 1885 the International Institute of Statistics …

3. The first uniform statistical nomenclature … at the Second International Conference on Commercial Statistics.

4. The idea of a common framework for Customs Tariffs … at the World Economic Conference in 1927.

5. The first version of a draft Customs Nomenclature … in 1931.

6. Considerable amendments … to the Geneva text.

7. «The Brussels Tariff Nomenclature» … «The Customs Co-operation Council Nomenclature».

8. The exploratory studies and preparatory work … under the auspices of the CCC.

9. This 1949 draft … into the Brussels Convention of 15 December

1950.

10. Favourable conditions for the standardization of Customs tariffs …

VII. Translate into English.

1.	Почему возникла необходимость классифицировать товары?
2.	Какая	система	классификации	товаров считалась лучшей
(обладающей преимуществами)?
3.	Почему было необходимо разработать общую международную
номенклатуру?
4.	Когда и где была принята первая всеобщая статистическая
номенклатура?
5.	Что стали называть «Женевской номенклатурой»?
6.	Что создало благоприятные услов я для стандартизации та-
моженных тарифов?
7.	Почему в Женевский текст был	внесены значительные по-
правки?			важно

8.	Что осознали все			, заинте есованные в международной
			страны
торговле, в конце 1960-х?
9.	Почему было	ак			гармонизировать систему определе-
ния и кодирован я разных с ран?
10. Чем	аконч л	сь		сследования и подготовительная работа,
	под
проводимые	эг дой СТС?