Task 2. Read the text and answer the questions by one of the four options.
The importance of the WCO Harmonized SystemHow do you know what goods moving around the world are crossing customs borders?This is the issue that the Harmonized Commodity Description and Coding System (popularly known as the Harmonized System or the HS) is designed to address. The HS is a structured nomenclature comprising a series of 4-digit headings, most of which are further subdivided into 6-digit subheadings to accommodate particular groups of related products.Thanks to its multipurpose structure, the HS is a true “language of international trade”. The HS is one of the most successful instruments developed by the World Customs Organization (WCO) because it addresses a fundamental need of governments: the ability to classify what is being traded.This enables decisions on actions for specific goods (for example duty collections, restrictions or controls). In addition, this allows to use the collected information on traded goods to support economic and trade related planning.Governments and businesses use the HS’s identification and coding of commodities to facilitate international trade. The HS is, therefore, an important instrument not only for the WCO but also for all institutions, public or private, involved in world trade.Goods need to be properly classified to enable correct revenue collection. In addition, accurate classification is required to ensure that the use of the HS in regulating trade and in providing the data for trade statistics is not compromised. The more accurate the application of the HS, the more it serves the needs of its users.In 1983 the draft International Convention on the Harmonized Commodity Description and Coding System (HS Convention) was opened for signature and entered into force in 1988.The objectives of the HS Convention are to facilitate international trade and the collection and analysis of statistics.In addition, it is intended to reduce the expense of trade by facilitating the standardization of trade documentation and data transmission.Contracting Parties to the HS Convention are obliged to ensure that their Customs tariffs and statistical nomenclatures for imports and exports are in conformity with the Harmonized System. After its implementation, the use of the HS quickly spread and there are now more than 200 economies currently using HS as a basis for their national Customs tariffs.HS is also a basis for:• collection of international trade statistics;• rules of origin;• collection of internal taxes;• trade negotiations (e.g. Free Trade Agreements);• transport tariffs and statistics;• monitoring of controlled goods (e.g., wastes, narcotics, chemical weapons, endangered species, etc.).Both in concept and design, the HS represents a valuable instrument, which may be used for a variety of purposes while yet retaining a structure required for the purpose of tariff classification.
Questions:
4. What is the obligation of Contracting Parties to the HS Convention?