Information Technology Agreement: Classification Divergences

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1 Information Technology Agreement: Classification Divergences Roy Santana Market Access Division World Trade Organization

2 Scope of this presentation 1. ITA s Product coverage 2. ITA concessions and the WTO Schedules 3. Why divergences in classification? 4. Work in the ITA Committee 5. Example: HS classification of computers 2

3 1. ITA - Product Coverage: In general terms But it is not the way it appears in the ITA! 3

4 Attachment B Attachment A 1. ITA Product Coverage: 203 items in 2 Attachments Attachment A lists the HS headings or parts thereof to be covered. Section 1: [IT products] 112 items that correspond to 110 HS1996 Subheadings (i.e.6-digits), including 22 partially covered (i.e. ex-outs ). Section 2: Semiconductor manufacturing and testing equipment; parts 78 items that correspond to 45 HS1996 Subheadings, including 38 that are partially covered. Of these, 42 items are labeled For Attachment B. Attachment B lists specific products to be covered by an ITA wherever they are classified in the HS 13 items are listed in the Attachment without HS codes; overlap with HS codes listed in Attachment A. 4

Section 2: Semiconductor manufacturing and testing equipment; parts 78 items that correspond to 45 HS1996 Subheadings, including 38 that are partially covered.

5 2. ITA concessions and the WTO Schedules ITA Annex Paragraph 1 Each participant shall incorporate the measures described in paragraph 2 of the Declaration into its schedule to the General Agreement on Tariffs and Trade 1994, ITA commitments are incorporated in each Participant s WTO Schedule of concessions. Schedules can be found in the WTO website 5

to the General Agreement on Tariffs and Trade 1994, ITA commitments are incorporated in

6 2. WTO Schedules: example (1) Traditional HS-based concessions 6

7 2. WTO Schedules: example (2) Agreement on Information Technology (ITA) Attachment B With respect to any product described in or for Attachment B to the Annex to the Ministerial Declaration on Trade in Information Technology Products (WT/MIN(96)/16), to the extent not specifically provided for in this Schedule, the customs duties on such product, as well any other duties and charges of any kind (within the meaning of Article II:1(b) of the General Agreement on Tariffs and Trade 1994), shall be bound and eliminated, as set forth in paragraph 2(a) of the Annex to the Declaration, wherever the product is classified. Description HS 1996 Quartz reactor tubes and holders designed for insertion into diffusion and oxidation ex furnaces for production of semiconductor wafers Chemical vapor deposition apparatus for semiconductor production Parts of chemical vapor deposition apparatus for semiconductor production Apparatus for stripping or cleaning semiconductor wafers Lasercutters for cutting contacting tracks in semiconductor production by laser beam Machines for sawing monocrystal semiconductor boules into slices, or wafers into chips ex, ex ex ex ex Headnote 55 Products ( ) Most ITA participants have an Attachment B section 7

(within the meaning of Article II:1(b) of the General Agreement on Tariffs and Trade 1994), shall be bound and eliminated, as set forth in paragraph 2(a) of the Annex to the Declaration, wherever the

8 The 55 products in or for Attachment B Mostly semiconductor manufacturing equipment, plus their parts & accessories 8

9 3. Why divergences in classification? ITA Participants could not agree in 1996 on the HS classification of a number of products. Reasons included inter alia: Multiple use Technological convergence plus the fact that some consumer products were not covered by the ITA 9

10 3. Example: Multiple use Optical disc storage units, for automatic data processing machines (including CD drives and DVD-drives), whether or not having the capability of writing/recording as well as reading, whether or not in their own housings. Not covered 10

DVD-drives), whether or not having the capability of

11 3. Example: Technological convergence Computers: automatic data processing machines capable of 1) storing the processing program or programs and at least the data immediately necessary for the execution of the program; 2) being freely programmed in accordance with the requirements of the user; 3) performing arithmetical computations specified by the user; and 4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. The agreement covers such automatic data processing machines whether or not they are able to receive and process with the assistance of central processing unit telephony signals, television signals, or other analogue or digitally processed audio or video signals. Machines performing a specific function other than data processing, or incorporating or working in conjunction with an automatic data processing machine, and not otherwise specified under Attachment A or 8, are not covered by this agreement. Not covered Covered Not covered Some covered 11

intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

12 4. The ITA Committee Mandate: Para. 5 of the Annex to the ITA. Objective: Achieve, where appropriate, a common classification within the HS, giving consideration to work in the WCO (HS Committee). May suggest to the WCO to update the HS or resolve divergences in interpretation. Work began at the ITA Committee in A group of participant s customs experts met informally between 1999 and Produced a report on the possible HS classification of items. Technical work continued until December Five lists according to degree of consensus, but no formal decision taken. (G/IT/W/6/Rev.3) WCO was consulted on the classification of some items (e.g., G/IT/20, G/IT/26); classification opinions were adopted by the HSC for some of them. ITA Committee currently considering a Decision to agree on the HS96 classification of some of them. (G/IT/W/34) Modification of WTO schedules 12

A group of participant s customs experts met informally between 1999 and 2000. Produced a report on the possible HS classification of items. Technical work continued until December 2004.

13 4. How many solved thus far? (Doc. G/IT/W/6/Rev.3) HSC classification opinion (G/IT/26/Add.2) 13

14 5. Example: HS96 classification of optical disc storage units for ADP machines List I(A) 14

15 5. Example: HS96 classification of computers List I(B) 15

16 Thank You!

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